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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”

#141

Post by malandrew »

zappo2938 wrote: post #25
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…

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…

I've generally agreed with this sentiment and usually sum it up with the thought "One million people will usually better allocate one million dollars than one investor allocating one million dollars". That said, this isn't a hard and fast rule. There are certain types of "moonshot" projects that will never get built under such a scenario because you'll almost always fail to allocate enough money to such projects. Moonshot doesn't even have to mean something like sending a human to the moon. Moonshot can also be relative to an economy locally, like the decision to invest in power plants and transmission lines in many parts of the developing World that are underserved with regards to electricity needs.

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

#142

Post by digbyloftus »

mamon wrote: post #130
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.

Inherited wealth shouldn't be taxed at all: the testator has already payed the taxes when he was earning all those money he left. Taxing it again is just plain robbery.

All taxation is already robbery. That doesn't get taken in to account when deciding what to tax and at what rate for any other source, I fail to see why inherited wealth should be the exception.

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

#143

Post by douche »

malandrew wrote: post #141
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…

I've generally agreed with this sentiment and usually sum it up with the thought "One million people will usually better allocate one million dollars than one investor allocating one million dollars". That said, this isn't a hard and fast rule. There are certain types of "moonshot" projects that will never get built under such a scenario because you'll almost always fail to allocate enough money to such projects. Moo…

A million people with $1 apiece will buy a million McDoubles or coffees. Or a million Candy Crush credits...

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

#144

Post by bobby_9x »

krisdol wrote: post #100
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 also come from a previously communist country and I disagree. The world isn't so black and white. Progressive taxation is not equivalent to a centrally planned economic system. I've had state owned utilities and privately owned utilities, and I absolutely prefer the one that is subsidized by taxes and answers to voters. There's a huge difference between that and having state-chosen academia in Moscow decide how muc…

The US already has the one of the highest corporate tax rate in the world and the wealthy pay the majority of taxes. There is no inequality here.

We shouldn't de-incentivize prosperity. We need to create more tax payers, not less (or the whole system will collapse). Larger safety-nets will not create this incentive.

If it did, we would see many more startup and technology companies in nordic countries.

Instead, we see companies neutered by the intense regulations and taxes. Ikea, the biggest company in Sweden,is a non-profit in another country. Why is this?

Actually succeeding with a startup in those countries is nearly impossible. Starting a company is pretty much the only real way to truly become rich (if you are poor) and you will be systematically removing this power.

There is a good radiolab episode of exactly this in Peru.

Education is the key to a citizen with advantages with money. With freely available education, for instance, you can pay leas in taxes.

The problem is that most people would rather not sacrifice fun times now for a good life later. With freedom comes also comes the freedom to make poor life choices, and a certain percentage of people will alwayw make poor choices.

I'm not even saying there should be no safety net, just that there needs to be a careful balance.

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

#145

Post by js8 »

pandaman wrote: post #133
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…

I think you're very wrong in your reasoning, on both counts.

> they believe they can aim the redistributing horde at their enemies

I can understand why you say that, and it may be hard to understand, but actually, most people on the left don't really have "enemies". They want equality, not to conquer someone rich.

> Note how it's always the income inequality and never wealth?

First, wealth inequality is almost always discussed too (Piketty, if you want a trite example) and is often mentioned as being worse. But in any case, I think the focus on income is given by the fact that societies try hard to avoid ex post facto laws. So we say, OK, what you got now is fine but the rules are going to change from now on. That's why you focus on future change (income) rather than existing assets (wealth).

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

#146

Post by pandaman »

js8 wrote: post #145
pandaman wrote: post #133

Earlier quoted context omitted.

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…

I think you're very wrong in your reasoning, on both counts. > they believe they can aim the redistributing horde at their enemies I can understand why you say that, and it may be hard to understand, but actually, most people on the left don't really have "enemies". They want equality, not to conquer someone rich. > Note how it's always the income inequality and never wealth? First, wealth inequality is almost always…

>I can understand why you say that, and it may be hard to understand, but actually, most people on the left don't really have "enemies". They want equality, not to conquer someone rich.

Same as Russian bourgeois, who did not have personal vendetta against the "rich" (who had been the major capitalists and/or royal dynasty) they just thought it's unfair and those should not have as much wealth and influence. Is not it the sentiment of today's left against bankers/wall street/Koch brothers?

As for your theory why wealth is not targeted - so? Okay you do that for reasons you described, yet the effect is the same, is not it? I am pretty sure the 99% of the left do not care about this effect since they are not wealthy enough but it does not make it to disappear. The 1% who cares is, by definition, wealthy enough to instigate such a movement.

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

#147

Post by dinkumthinkum »

ZenoArrow wrote: post #39
dinkumthinkum wrote: post #34

Earlier quoted context omitted.

I think you are missing basic principles of economics. Your arbitrary cap on income would move companies and jobs to countries free of weird policies like that.

If old companies move, new companies would spring up to take their place. The reason this would happen is because the demand is still there. People don't stop buying clothes just because a clothes shop stops trading in their country.

The people in the Cayman's will successfully fulfill that demand, I don't really understand that point.

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

#148

Post by dinkumthinkum »

ZenoArrow wrote: post #42
dinkumthinkum wrote: post #29

Earlier quoted context omitted.

How about maybe that is sort immoral, let alone not serving any purpose of economic inequality. Now, your destroying entire industries for people that make things for multi-millionaires. Its just terribly naive, I'm not sure what this would achieve. Honestly, I'm not sure why you do not just argue for outright communism.

> "How about maybe that is sort immoral" How is it immoral to set upper and lower bounds on what people can earn? Do you really think it's immoral that someone can only earn 1000x more (for example) than the poorest amongst us? Do you really find that oppressive? > " Now, your destroying entire industries for people that make things for multi-millionaires." You're not destroying industries, you're curbing the rate at…

I do think saying someone cannot be paid more than X by law is immoral and draconian. It's also a very naive "solution." It's like a child saying "nah nah nah, we're equal now" or something to that effect.

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

#149

Post by js8 »

pandaman wrote: post #146
js8 wrote: post #145

Earlier quoted context omitted.

I think you're very wrong in your reasoning, on both counts. > they believe they can aim the redistributing horde at their enemies I can understand why you say that, and it may be hard to understand, but actually, most people on the left don't really have "enemies". They want equality, not to conquer someone rich. > Note how it's always the income inequality and never wealth? First, wealth inequality is almost always…

>I can understand why you say that, and it may be hard to understand, but actually, most people on the left don't really have "enemies". They want equality, not to conquer someone rich. Same as Russian bourgeois, who did not have personal vendetta against the "rich" (who had been the major capitalists and/or royal dynasty) they just thought it's unfair and those should not have as much wealth and influence. Is not it…

I seriously can't comment on motivation of Russian bourgeois; still, I would like to explain it, even though I think it's futile.

Here's an analogy. Let's say you have a weapon and I don't. And I honestly don't believe either of us should have weapons, because we can live in peace. So I attempt to convince you to give up your weapon, but you think it's an attack, because you cannot read my mind, and you're paranoid that I am going to kill you when you are without the weapon I might take from you. But that's not my actual intent.

So it's the similar thing you're thinking with respect to the left. You could have also noticed I used a qualifier "most".

Your other argument also shows a good amount of conspirational thinking. In particular, it ignores the fact that most people on the left are against rent-seeking too. And with limited income it becomes actually quite complicated to manage large wealth.

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

#150

Post by pandaman »

js8 wrote: post #149
pandaman wrote: post #146

Earlier quoted context omitted.

>I can understand why you say that, and it may be hard to understand, but actually, most people on the left don't really have "enemies". They want equality, not to conquer someone rich. Same as Russian bourgeois, who did not have personal vendetta against the "rich" (who had been the major capitalists and/or royal dynasty) they just thought it's unfair and those should not have as much wealth and influence. Is not it…

I seriously can't comment on motivation of Russian bourgeois; still, I would like to explain it, even though I think it's futile. Here's an analogy. Let's say you have a weapon and I don't. And I honestly don't believe either of us should have weapons, because we can live in peace. So I attempt to convince you to give up your weapon, but you think it's an attack, because you cannot read my mind, and you're paranoid t…

I don't see how you are arguing against anything what I've said. Here is a recap of this thread how I see it:

OP: I don't see why smart, capable people want to give their money to the government.

me (paraphrasing): Theory 1: they don't believe they are going to give the money themselves just like Russian bourgeois did not believe they are going to end up in exile/dead together with the "rich" they had been against (paraphrasing).

you: you are wrong, we just want equality.

me: it's okay, the Russians did want it too.

you: here is a weapon analogy, and you are just paranoid btw.

me: ...

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