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A Response to Paul Graham’s Article on Income Inequality

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Re: A Response to Paul Graham’s Article on Income Inequality

#211
post #206

Earlier quoted context omitted.

You just described what happens when you receive an initial investment, like an IPO. You also didn't describe how the hedge fund gets a return. What you described could also be accomplished through debt. I was talking about something different.

Many hedge funds do invest in IPOs. They also invest in all sorts of debt: corporate, municipal, sovereign, emerging market. It's true that hedge funds and mutual funds also invest in the stock market, which is a secondary market where the money doesn't go to the original issuers. However the existence of a healthy and liquid secondary market is what gives primary investors the confidence to buy stakes (or lend) to s…

Not saying it's a bad thing, only that it's a thing, and the availability of these types of funds to the rich and lack of availability to the average investor is one of the reasons for inequality, as the original poster was saying.

Becoming 'increasingly divorced' from economic reality doesn't mean that it's completely separate, only that even in times of low growth, the ultra rich have high yield funds available to them which exacerbates economic inequality. It's just a trend. Or as Piketty states, r > g. Hedge funds used to be entirely defensive against market downturns, today they're increasingly run by speculative traders, many of whom offer outsized returns.

Re: A Response to Paul Graham’s Article on Income Inequality

#212
post #9

PGs articles aren't wrong - but they are second order, when we need a first order response to a current evil [ before it leads to bloody revolution ] If you look at income distribution its a hockey stick - you really have to slap yourself on the face and realise there is no middle class - what you thought of as professional-middle-class-contributor is actually college-debt-burdened-lower-class - no matter how many ye…

"lower class are basically slaves" You're going to compare working graveyards at 7-Eleven to slavery ? You should read a little bit about slavery and human trafficking. https://en.wikipedia.org/wiki/Slavery I suspect most slaves would not agree with you.

Why derail this over a word? Wage slavery is a well-known and widely-used term that is useful.

Re: A Response to Paul Graham’s Article on Income Inequality

#213

Earlier quoted context omitted.

> I really think we are headed for bloody revolution, because most of the populace are angry, and its a rational anger because their survival needs are barely being met, in many cases. From someone who grew up poor and identifies strongly with outlaws, I concur. But unlike OP I think it needs to happen.

Surely a cool, calculated, orderly effort to solve the problems described by the GP would be better than bloody revolution, which is a mere outpouring of anger that might not even solve the problems and would probably create entirely new ones. Do you think that no other option is possible at this point? Edit: Talk of revolution makes me think of the song "Won't Get Fooled Again" by the Who, particularly the closing l…

Wait, are we talking about humans or our nascent AIs? Humans need hope and social / political pressure-release-valves or else ... bloody revolution.

Re: A Response to Paul Graham’s Article on Income Inequality

#214

Meh. Your feelings are hurt boohoo. If you are poor and low status why don't you do something about it instead of whining about it and saying how we are all hurting your feelings. Sure, there are cases where you need outside help to get out of your current situation. Yes people should help if they can. But if I provide you help and you waste it like it is tipically the case than it is on you. It is not my responsibil…

> If you are poor and low status why don't you do something about it

Because the deck is so fundamentally and incontrovertibly stacked against them that they can't? I'd say that this would be obvious except that that itself would be too obvious given your posting history here; I've seen a lot of shitty posts around here, but yours is in the top five of most overtly antisocial and unempathic, ever, full stop.

Re: A Response to Paul Graham’s Article on Income Inequality

#215

"I am a manufacturer of income inequality." Bullshit.

Agreed. PG is in the business of helping people move up the wealth ladder, which is laudable and pretty much the opposite of preventing other people from moving up the income ladder, which is what rent seekers, wage thieves and tax dodgers do. Putting himself under the same umbrella as the oligarch class seems disingenuous and non-productive.

Graham is in the business of helping his investors move up the wealth ladder. And without putting too fine a point on it, helping his investors make more money in no way implies societal benefit.

Re: A Response to Paul Graham’s Article on Income Inequality

#216
post #164
post #154

"I find it astonishing that people compare modern-day income equality and the position of the poor in our time, in the Western world, to that of historical slavery" I'm sorry to tell you but you're a moron if you believe there isn't mass suffering when you are poor and low status. The amount of psychological abuse you take and feelings of self worth and being treated as subhuman by society and the business community…

One of the common ways to get out of poverty in the past was indentured servitude. People would voluntarily sell themselves into slavery because it was preferable to their current "free" position. You can't eat freedom.

Yes, although indentured servants were not quite the same as slaves (again, there was of course variance depending on time and place).

For instance, did the fugitive slave acts of colonial America cover white fugitive indentured servants? I'd presume no, although some other laws existed to cover them (I'm by no means an expert but some reading makes me think this.)

Racism must have been a significant factor in making the difference of slavery and servitude in the American colonies: actual slaves were of African descent, while indentured servants were European, and apprenticeship contracts covered young American-born people.

When we talk about slavery in Europe today, in realistic terms it is actually more resembling the indentured servitude contracts of America (debt bondage and enforced servitude) but illegal (if authorities find out, they work actively to confiscate any proceeds of such contracts from those who benefit). E.g. sex workers who are deceived to take some form of a debt bondage.

Where I see the word "slavery" used is however often about situations where employment officials assign some training or intern arrangements for people to get job-seekers allowance. It's hyperbolical, even if there might be something wrong with these arrangements.

Re: A Response to Paul Graham’s Article on Income Inequality

#217
post #142

I disagree with most of the post, but here is one point that I'm particularly at odds with: > We have no obligation to stop someone from “becoming rich”– but we have a strong obligation to stop someone from becoming poor. I don't see a way to stop people from becoming poor. The most common way of becoming poor is not to produce wealth. How could we fulfill our "strong obligation" and force people to produce wealth?

> The most common way of becoming poor is not to produce wealth. How could we fulfill our "strong obligation" and force people to produce wealt There is a break in your logic: your conclusion would only make sense if not producing wealth is the only way of becoming poor, which is not the case (think bankrupting medical bills that can make you poor even as you 'produce wealth'). To answer your question directly: you c…

> There is a break in your logic: your conclusion would only make sense if not producing wealth is the only way of becoming poor.

I read the strong obligation of stopping people becoming poor as stopping any people from becoming poor, rather than stopping some people from becoming poor. If there is a single feasible way to become poor, then some people would go that way, and we have failed that obligation. The flaw is not in my logic.

Even with strong social security net, you cannot stop people from being poor. The strong social security net would represent the lowest level of income. At the lowest level of income in a society, you're poor, as everyone else is making more than you do. If someone was working and making less than what the social security provides, then they can just stop working and be better off at the security net level.

No matter how strong the social security net, the people resting on it will always be the poorest in the society.

Speaking from experience (grown up in a communist country, living in Western Europe atm), even the strongest form of state-forced salaries/job availability did not prevent people from becoming poor. Unsurprisingly, the current Western European societies are not preventing this either.

Re: A Response to Paul Graham’s Article on Income Inequality

#218
I've seen Paul Graham make a few shocking remarks about wealth distribution claiming for instance there'd be no Sergey and Larry (i.e. Google) if they thought some of their wealth was given to the poor. I doubt Sergey and Larry would have been one bit perturbed if they thought they would have amassed 80% of or even less. In their wildest dreams they could probably not have even imagined amassing 20% of that. But I don't want to get bogged down talking about their outlying data point - though Mr Graham chose to present it as exemplar.

My main objection to Mr Graham (apart from his general "let them eat LISP" tone) is that his point is moot in the larger context. Yes it is true that the technology sectors have been phenomenally successful in the last few years but they are such a tiny amount of the actual working economy. They only stand out because they are still in growth while the vast bulk of the economy is not.

Mr Graham quite grandiosely describes himself as a "creator of inequality" as though he is somehow on a par with these captains of industry, the 1% or economic elite as we variously describe them but he is not. He's just another cog in the system - a well remunerated cog certainly but a cog nonetheless.

As a programmer myself I enjoy an elevated income and standard of living. Having worked in a few startups I have rubbed shoulder regularly with a few millionaires (self-made and otherwise) and by and large I would describe these guys as often friendly, often generous, and always fiendishly clever and hard working. I've never envied them their gains and I've never wanted for more - I'm doing a job I love and I have enough money to live in comfort and can buy most things I need without having to struggle.

But we are in a different world my millionaire friends and I. In the various other walks of life I encounter I see people working harder than me, more qualified than I, and enjoying far less job security than me, and all simply because they work in "low growth" sectors of the economy. Sectors that are nonetheless necessary, such as health, with skills that are nonetheless indispensable (nurses, firemen) yet woefully under resourced. All because they aren't growth industries - which can basically be reinterpreted as "there isn't a quick buck to be made".

On the flip side to that Mr Graham talks about how the successful businesses are those that have increased productivity by harnessing technology to increase efficiency and productivity but if that is the general trend, that the economy is nurturing more efficient use of resources then why isn't the cost of living going down?

The truth of it is that Mr Graham and I are enjoying relatively sweet times because we are the darlings of capital. We give better returns on investment than other sectors of the economy. We find new ways to do things so that the cost of running businesses is decreased whilst still charging the same price for the services to the consumer.

We shouldn't be so quick to set ourselves at odds with the egalitarian movement. Certainly I wouldn't rush to pay more tax or earn a lesser wage - but at the same time it does hurt me to see the numbers of homeless increasing, my friends and family struggling, and the quality of medical care in decline. I'd have to weigh these factors up before taking flight with my valuable skillset.

But what I do wonder about, is about these shadowy figures in the background that always seem to be taking a cut. I mean the actors and organisations that fund and manipulate all of this - that nurture "high growth" systems and starve the "low growth" ones - whether it's on purpose, or just an emergent pattern - and what are we going to do about it?

I believe in Capitalism, and I accept that inequality is a natural factor of society. But that shouldn't preclude me from saying that we need more socialism in our society - that doesn't mean I want a centrally planned communist state like the USSR, it just means that I want our valuations to be more nuanced than just "return on investment".

Somebody somewhere else on here wrote that if you increased taxes on the wealthy it would only amount to a few thousand dollars extra per person. Well I can only say that is a lot of money to somebody that doesn't have a thousand dollars and collectively it is a lot of money for an institution such as a hospital.

I believe the phrase these days is that you should "check your privilege".

Re: A Response to Paul Graham’s Article on Income Inequality

#219

Perhaps I've been sensitized by recent reading[1], but I don't think this response addresses the real problems with PG's article. The problem with inequality is not necessarily the inequality itself. The poor in America are significantly better off than the wealthy were not very long ago, in most material senses, as has been repeatedly pointed out. So what if they don't get as good health care or education or whateve…

>The thing that bothers me most: All of those fancy technologies that PG emphasizes, those that some commentors here are happy to trade 45 years of real wage growth for, had their direct roots in that brief period of weird equality. What happens next? What happens after AirBnB puts all the hotels out of business and we're all staying in each other's spare bedrooms on trips? What happens after Uber has killed off all…

They think they are Vernor Vinge characters, but in reality they are end up as Sleep Dealers[1].

[1] https://www.youtube.com/watch?v=xW8oSRSzS7M

Re: A Response to Paul Graham’s Article on Income Inequality

#220

Earlier quoted context omitted.

"lower class are basically slaves" You're going to compare working graveyards at 7-Eleven to slavery ? You should read a little bit about slavery and human trafficking. https://en.wikipedia.org/wiki/Slavery I suspect most slaves would not agree with you.

Both have in common the order-giver and order-obeyer. Of course, I agree wage slavery is better than chattel slavery. Better to have some choice of master than one imposed on you. (Though slaveowners made the interesting argument that they must take care of their workers because they own them, unlike the capitalist who merely rents them.) In the US, the prison system replaced slavery as the mechanism to control the b…

  >  In the US, the prison system replaced slavery as the mechanism to control the black population. So the US has not improved much in that regard, with even children killed in broad daylight by the state.
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