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Economists Are Rethinking the Numbers on Inequality

economist.com

141–150 of 367 posts

Re: Economists Are Rethinking the Numbers on Inequality

#141

Earlier quoted context omitted.

Why exactly is inequality a problem? Because people suffer from their envy? People starving, having no health care, low life expectancy, that sort of thing, are problems. Their neighbor having more money in the bank is not really a problem. There are also actually differences in skills, performance, diligence, and so on. It would be very unfair if some people weren't allowed to earn more money than others. Whether it…

> People starving, having no health care, low life expectancy, that sort of thing, are problems. Their neighbor having more money in the bank is not really a problem. Most people, when they critique wealth inequality, aren't critiquing their neighbors because most people in the same zip code are going to be at similar levels. When people critique wealth inequality, they're talking about the Koch brothers, or other pa…

"Unfair capital advantage"

Well, again, start accumulating capital, if it is such an unfair advantage.

"I, too, am in favor of a 100% wealth tax upon death. No more freeloading failsons."

I am absolute against such a thing, in fact I consider it an insane proposal.

It seems one of the fundamental human rights should be people being allowed to provide for their children.

People work to have successful children. It is absolutely incorrect that all children should have the same starting positions for a fair world. If a couple works hard to earn money, and others don't work and instead pop out 10 children, why on earth would it be fair to take money from the hard working parents to distribute it to all? I know many people who would like to have more children, but feel they can't afford them. Why should they be punished for being responsible.

It even starts before people have children. They work hard to be attractive and find a good mate, to improve the odds for their children. That is basic human nature.

The acts of their parents are not the children's fault, of course, and everybody should be given a fair chance to make it in life. But there are limits. Both strategies can be valid (have few children and try to give them a good head start in live vs having as many children as possible and leaving them to their own devices), but it would be unfair to politically punish one strategy over the other. At the very least, if you take away money from the responsible parents, you should have to limit the behavior of the irresponsible parents.

The only way to make things completely equal for everyone is to disallow people to have children, and instead rise future children in clone factories. Why should that be considered desirable?

And even more basic than that: people should be allowed to do with their money as they please. Including giving it to their children.

Re: Economists Are Rethinking the Numbers on Inequality

#142
post #74

Why when we talk about inequality we never talk about the tide of economic progress that capitalism produces. If the rich get richer but the middle class has a better quality of life than what the rich had 200 years ago, is strict inequality still the only thing that matters?

> If the rich get richer but the middle class has a better quality of life than what the rich had 200 years ago

So no changes are called for until quality of life is literally as bad as it was 200 years ago?

In more recent times, quality of life and economic metrics are flat or down in the USA, at least. Life expectancy has gone down multiple years in a row now, for example.

Re: Economists Are Rethinking the Numbers on Inequality

#143
post #66

Earlier quoted context omitted.

But hoarding wealth isn't a problem for inequality. It is that capital can be used to generate income. Inflation is the process that incentivizes capital to be put to work.

> But hoarding wealth isn't a problem for inequality. It absolutely can be, especially for wealth that is finite. (Like land for housing) > Inflation is the process that incentivizes capital to be put to work. Does it though? Inflation mostly just punishes labor alone, labor feels the effects of inflation far more severely than anyone else. With enough capital (the amount anyone 'hoarding wealth' already has), the ca…

The market already has a mechanism for incentivizing putting capital to work, though. If something is held off the market ("hoarded", in your terminology), it reduces supply, and the returns in that area go up, making it more attractive to do something with it.

For money-wealth, the outlook is even better. If Scrooge McDuck, puts all his money into his basement so he can swim in them, he has removed those from the supply and increases the value of everyone else's money while he holds it off the market.

Re: Economists Are Rethinking the Numbers on Inequality

#144

Earlier quoted context omitted.

> People starving, having no health care, low life expectancy, that sort of thing, are problems. Their neighbor having more money in the bank is not really a problem. Most people, when they critique wealth inequality, aren't critiquing their neighbors because most people in the same zip code are going to be at similar levels. When people critique wealth inequality, they're talking about the Koch brothers, or other pa…

"Unfair capital advantage" Well, again, start accumulating capital, if it is such an unfair advantage. "I, too, am in favor of a 100% wealth tax upon death. No more freeloading failsons." I am absolute against such a thing, in fact I consider it an insane proposal. It seems one of the fundamental human rights should be people being allowed to provide for their children. People work to have successful children. It is…

[deleted]

Re: Economists Are Rethinking the Numbers on Inequality

#145

Earlier quoted context omitted.

We know that because he did it. He literally proved it by becoming a Billionaire. Yes, lots of people were alive in the exact same time when he started Amazon.

How is that proof of ability more than luck?

He has been going at it consistently for many, many years now. He just happened to be lucky year after year?

Most people don't even try, but it doesn't stop them from accusing people who put in the work and who take the risks from just being lucky.

Re: Economists Are Rethinking the Numbers on Inequality

#146

Earlier quoted context omitted.

What kinds of service jobs do you have in mind?

R&D in general (but, in particular, engineering, innovative software development and other highly-trained CS-based roles, life sciences research), highly-trained managerial roles in finance, accounting, operations management

The jobs you listed are all information worker jobs. Service jobs are things like hairdresser, waiter, receptionist, etc.

Re: Economists Are Rethinking the Numbers on Inequality

#147
post #77

Earlier quoted context omitted.

But not the kind of capital people usually think about when railing about billionaires and wealth taxes.

It's capital in economic terms.

It is a combination of land and capital and it is the land that makes up the scarce part of it.

Re: Economists Are Rethinking the Numbers on Inequality

#148
post #74

Why when we talk about inequality we never talk about the tide of economic progress that capitalism produces. If the rich get richer but the middle class has a better quality of life than what the rich had 200 years ago, is strict inequality still the only thing that matters?

> If the rich get richer but the middle class has a better quality of life than what the rich had 200 years ago So no changes are called for until quality of life is literally as bad as it was 200 years ago? In more recent times, quality of life and economic metrics are flat or down in the USA, at least. Life expectancy has gone down multiple years in a row now, for example.

> Life expectancy has gone down multiple years in a row now, for example

It's been established that the cause of this, in America, is opioids and obesity, none of which are the fault of billionaires, broadly.

Re: Economists Are Rethinking the Numbers on Inequality

#149
post #71
post #53

Earlier quoted context omitted.

> the only reasonable solution for this is a tax on owned capital (not on income or cap gains) and the political chances of this happening are slim Seems to be a cornerstone policy of multiple presidential candidates in the US at the moment. We have it in the Netherlands. I don't think it's that unlikely. Not sure how much it helps with inequality in the Netherlands though. If anything I think it stimulates people an…

In the Netherlands (where I currently reside as well) I think this tax can easily be avoided by placing your assets in some sort of shell company. When the startup I used to work for IPO'd I was not surprised to find that most of the important stockholders were using such companies (presumably) to avoid being taxed on their hundreds of millions/billions of euros.

As soon as you get it out of there either as income (at least some part is required) or as dividend and you start paying taxes. Not before so this is allowed and legal (and smart). They are about 25-30% in total well below the top tier of about 52% in case of income tax.

Re: Economists Are Rethinking the Numbers on Inequality

#150
post #7

This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new. The major points of their work, and especially of Piketty's monumental _Capital for the 21st century_ still stand: that capital is a positive feedback loop in a way that labor is not; that mid-20th-century laws that put brakes on this feedback loop have been removed; th…

I had a very different takeaway from Piketty's book. Namely, that inflation (primarily hyper inflation) has been the only force to reduce income inequality. For example, Jeff Bezos is much more affected than I am if the government decides to give everyone a $1B. Thus, governments looking to end income inequality shouldn't be afraid of high inflation.

Sorry but that seems like nonsense, at least the Bezos example.

If everyone gets 1B tomorrow an amazon share will just be a lot more expensive. You are assuming Bezos holds all his wealth in cash.

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