Earlier quoted context omitted.
That's a flat out fairy tale.
Why wouldn’t the wealthy pay more for education if it was truly worth it?
They didn't get wealthy by throwing money at things.
Talent, luck and success: simulating meritocracy and inequality
191–197 of 197 posts
Re: Talent, luck and success: simulating meritocracy and inequality
#192Earlier quoted context omitted.
Talking about the extremes, I agree. Talking about defining sensible rules to allow a wider range of people to be successful than only those being a member of the local Golf Club, I disagree. There should be no question that we need rules, and at the same time there should be intense discussions - if not intellectual fights - about which rules we need and how to implement and enforce them.
>allow a wider range of people to be successful But what does "successful" mean in practice? E.g. If there are 100 software security companies, 50% of those are below average in performance (and will probably get chosen less). Do we no longer choose let the consumers choose? All of these software companies should now receive a percentage of business, regardless of performance/trust/expertise? Or should the top perfor…
For me, this is about ensuring that all 100 companies play along the same rules. If, while following the same rule book, 10 are significantly more successful than the others, fine. If another 20 are significantly less successful, also fine.
What is no fine, is having some companies be exceptionally successful by breaking some rules. Think insider trading, it's a highly profitable business for those risking it, but has a long term negative impact on the market. Therefore we, as a society, via our proxy, the government, decided to enforce rules forbidding insider trading.
The above answers who. This leaves the question of sensibility, I am afraid there will hardly every be consensus on what is sensible or not within a diverse enough group of people. If you'd ask a bunch of investment bankers about sensible rules for banking regulation, I'd assume you'd get quite a different answer than by asking a bunch of consumer rights activists. Our current solution to this problem of finally arriving at a single "sensible" rule is the democratic process / parliament. I guess most would agree this process seems to be sub-optimal, but it seems there are not too many other options on the table.
Re: Talent, luck and success: simulating meritocracy and inequality
#193Earlier quoted context omitted.
Supply and demand defining price is economics 101. If you’re going to propose an alternative reality, you’re going to have to provide some data to back it up.
And Econ 101 is extremely simplified, due to being an entry level course. Go beyond the freshman level, and you'll find far more nuanced forces at play.
Nuanced != arbitrary
Re: Talent, luck and success: simulating meritocracy and inequality
#194Earlier quoted context omitted.
> Talent is not universal, being a great Doctor has little to do with being a great painter or investor. You might like to think so, but g says otherwise.
Correlation != a 1:1 relationship. Top Hollywood actors might do better than the average person on average, but plenty of high income people live in vast amounts of debt.
It just has to be better on average, though, for the broader social implication to hold: allocating capital to able people isn’t just about rewarding them, it’s about what they go on to do with that capital.
Re: Talent, luck and success: simulating meritocracy and inequality
#195Earlier quoted context omitted.
Correlation != a 1:1 relationship. Top Hollywood actors might do better than the average person on average, but plenty of high income people live in vast amounts of debt.
It just has to be better on average, though, for the broader social implication to hold: allocating capital to able people isn’t just about rewarding them, it’s about what they go on to do with that capital.
That would only be relevant if their was absolutely no other way to allocate capital and maximizing ROI was the only relevant metric. Building, a X$ Yat may count to GDP as X$ worth of healthcare, but society does not care about them equally.
What's important is the outputs of society, not the accounting that occurs between effort and consumption.
Re: Talent, luck and success: simulating meritocracy and inequality
#196Earlier quoted context omitted.
It just has to be better on average, though, for the broader social implication to hold: allocating capital to able people isn’t just about rewarding them, it’s about what they go on to do with that capital.
That would only be relevant if their was absolutely no other way to allocate capital and maximizing ROI was the only relevant metric. Building, a X$ Yat may count to GDP as X$ worth of healthcare, but society does not care about them equally. What's important is the outputs of society, not the accounting that occurs between effort and consumption.
All people engage in consumption, though — less able people as well as more able people. The issue is, when they aren’t, what are they doing with that capital? This relates not only to how people run a business but also how they engage with civic projects, charities and institutions like schools and universities.
There are marked differences in styles of consumption. Some of the things the Romans did, for example, are simply too destructive and wasteful for our tastes today.
If you’re saying, we can allocate capital not to more or less able people, but in some other way — to institutions or something — well, that’s true; but there still will be capital managed by individuals. When talented, constructive people rise to the top of the heap and run laundromats, computer companies, and other businesses, we are ultimately all better off for it, because those services are (a) available and (b) good. But to run such businesses people do need to accumulate capital.
Re: Talent, luck and success: simulating meritocracy and inequality
#197Earlier quoted context omitted.
That would only be relevant if their was absolutely no other way to allocate capital and maximizing ROI was the only relevant metric. Building, a X$ Yat may count to GDP as X$ worth of healthcare, but society does not care about them equally. What's important is the outputs of society, not the accounting that occurs between effort and consumption.
All people engage in consumption, though — less able people as well as more able people. The issue is, when they aren’t, what are they doing with that capital? This relates not only to how people run a business but also how they engage with civic projects, charities and institutions like schools and universities. There are marked differences in styles of consumption. Some of the things the Romans did, for example, ar…
My point is there is no reason to use indirect means. If you care about efficient use of capital then add a capital tax of say 1%. Now, people who get a higher ROI accumulate wealth faster rather than those who simply conserve wealth.
When accumulation of wealth is more tightly coupled with the ability to invest rather than the ability to let compound safe investments create wealth you increase efficiency.
Beyond that I don't think capital accumulation needs any incentives. People don't invest more because of changes to the tax code they simply get more money from the same investments.