Economists Are Rethinking the Numbers on Inequality • Hacker News Board

Re: Economists Are Rethinking the Numbers on Inequality

#211

Post by bhupy » Wed, Dec 04, 2019, 8:07 PM UTC

ranie93 wrote: post #205

bhupy wrote: post #156

Earlier quoted context omitted.

The problem with this line of thinking is 1) The amount of wealth held by ultra-billionaires isn't nearly enough to solve our poverty problems. If you seized literally all of the wealth of the the entire Forbes 400, it would fund the US federal government for 8 months. 2) Wealth is illiquid, and if one were to seize it, you can only seize it once. It isn't an ongoing stream unlike, say, income. So to amend the last s…

Without checking the figures, I can agree with the idea that a one-time seizement wouldn't assuage much. Certainly Bill Gates and his endeavors have created immense value for many. None of these points are being contested or purported in the "line of thinking" you mention (the letter I linked I assume?)

> None of these points are being contested or purported in the "line of thinking" you mention (the letter I linked I assume?)

These points are being purported/contested here:

"There is nothing worth celebrating about a world where inequality is so extreme that 58% of people are in poverty, while a few dozen billionaires have more than all of their wealth combined"

Re: Economists Are Rethinking the Numbers on Inequality

#212

Post by CharlesColeman » Wed, Dec 04, 2019, 8:21 PM UTC

AnimalMuppet wrote: post #193

jimbokun wrote: post #112

Earlier quoted context omitted.

> INHO we should be looking much more at consumption and a lot less at income or (worst of all) assets. At what age can you retire? Can you afford education for yourself and your children? Can you afford the home in the district with the good schools? How much debt will you and your children be in after finishing college? What are the odds you go bankrupt from a medical incident, even with "insurance"? "Consumption"…

> Can you afford the home in the district with the good schools? Let me pick on that one in particular. Let's suppose that we redistributed all the assets in the country evenly (never mind how). Doing so did not increase the number of homes in districts with good schools. So not everyone can have them, no matter how much money everyone has. Who's going to get those houses? Not everyone who has school-aged kids. Or ta…

> If everyone had the same amount of money, these things would still be allocated on the basis of who's willing to pay the most for them - that is, who's willing to give up the most other things in order to get that thing.

Though that's arguably a better situation from the equality perspective. Right now we have people who are allocated everything they want and others who are allocated none of what they need. Taking redistribution to a monomaniacal extreme is probably a bad idea for well understood reasons, but that doesn't mean that redistribution doesn't have its place.

Re: Economists Are Rethinking the Numbers on Inequality

#213

Post by a_geeky_bro » Wed, Dec 04, 2019, 8:37 PM UTC

rguzman wrote: post #31

60654 wrote: 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…

it seems odd to dismiss papers that challenges Piketty's and Saez's conclusions as nitpicky. in complex systems the devil is most often in the details. and not only that, but the sort of project that Piketty took on has many potential methodological pitfalls. so, small details could actually mean a given premise or conclusion is invalid. how would you suggest someone go about assessing whether a paper is nitpicky vs…

Ahhh, yes -- being a contrarian. How very HN of you.

Re: Economists Are Rethinking the Numbers on Inequality

#214

Post by simonh » Wed, Dec 04, 2019, 8:42 PM UTC

cannabis_sam wrote: post #199

rguzman wrote: post #31

Earlier quoted context omitted.

it seems odd to dismiss papers that challenges Piketty's and Saez's conclusions as nitpicky. in complex systems the devil is most often in the details. and not only that, but the sort of project that Piketty took on has many potential methodological pitfalls. so, small details could actually mean a given premise or conclusion is invalid. how would you suggest someone go about assessing whether a paper is nitpicky vs…

Do you have any actual arguments or are you just trying to sow FUD? Cause you sound exactly like a concern troll. Not providing any substantial arguments against Piketty, just vaguely suggesting that there are problems with his argument, then changing the subject to what’s nitpicky or not.. Give us a concrete argument, and we can discuss if it’s nitpicky or not. What you are doing is leading people into the weeds, wh…

Aren’t we discussing an article which actually lays out these arguments, and references the papers with more detail? At least, I thought that’s what we were doing. Under those circumstances it seems odd to complain about a lack of such arguments having been presented.

Re: Economists Are Rethinking the Numbers on Inequality

#215

Post by beerandt » Wed, Dec 04, 2019, 8:49 PM UTC

hervature wrote: post #172

FeloniousHam wrote: post #159

Earlier quoted context omitted.

> I, too, am in favor of a 100% wealth tax upon death. No more freeloading failsons. I am very far from an economic leftist, but the elimination of inheritance seems to me the fastest, fairest, path to equality of opportunity (the disposition of the confiscated assets is a separate argument). Tax the dead guy.

You're just incentivizing rich people to put all their assets in holdings companies and then giving their children ownership before they die. I wouldn't be surprised if this is how its done today.

That's basically what trusts are, with a few additional benefits.

Re: Economists Are Rethinking the Numbers on Inequality

#216

Post by kakwa_ » Wed, Dec 04, 2019, 8:49 PM UTC

Merrill wrote: post #160

60654 wrote: 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…

>that mid-20th-century laws that put brakes on this feedback loop have been removed; I don't believe that the purpose of mid-20th-century laws was to promote equality. Things were more equal then because: a) World Wars I & II destroyed huge amounts of capital, and b) fighting wars requires lots of money which requires raising taxes on people who can pay, since borrowing cannot fully fund general wars. Economics are c…

It's a bit more than cycles.

The huge reduction in the XXth century was due to many factors.

You start in the XIXth century with the development of Anarchism, which, to oversimplify, spawned various movements such as democratic socialism or communism on the political side, but also syndicalism (anarcho-syndicalism). The appearance of these forces started to change/influence things even before WWI with a few laws regulating working conditions (ex: 6 days week in 1906 in France voted after the Courrières mine disaster, or in Germany with a basic form of social security put in place in the 1880ies).

The two World Wars, and specially the various states (France, UK, Germany Russia) defaulting on their debts (either through inflation or complete un-acknowledgment of the debt) basically killed the rentiers (previously it was really nice for them, 5%, with an economic growth of 1 to 2% and practically not inflation).

The rise of the legitimacy of the State also helped a lot. This is due to the rise of Nationalism, the efforts of various states to build a common identity, and also the technological developments which permitted for a state to reach every corner of its population (transport and communication). This lead to the legitimacy of states to raise taxes which would have caused revolts previously.

WWI and specially WWII also shifted mentalities hugely, it's quite interesting that countries either monetarily or literally in ruins created Social Security systems.

Lastly the degree of technological development and its progressive deployment between 1820 and 1980 (in Europe and North America) hugely improved material condition for most people. The equation is a bit different when you are past 80% of the economy being subsistence farming.

Yes, some past events did change wealth distribution (the Plague for example), but a change on that scale is not something ever seen before in History, the XXth was pretty exceptional in that regard.

Re: Economists Are Rethinking the Numbers on Inequality

#217

Post by pksdjfikkkkdsff » Wed, Dec 04, 2019, 8:50 PM UTC

VladimirIvanov wrote: post #201

pksdjfikkkkdsff wrote: post #145

Earlier quoted context omitted.

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.

Bezos also had parents that gave him a several 100 thousand dollar loan that they never expected to be paid back. He's a product of Montessori and Ivy League education. Definitely not a rags to riches story

From 100 thousands to Billions is kind of rags to riches. And even so - you are saying he doesn't deserve his success? It doesn't count because he went to Montessori school?

Re: Economists Are Rethinking the Numbers on Inequality

#218

Post by joyeuse6701 » Wed, Dec 04, 2019, 8:57 PM UTC

Merrill wrote: post #208

toyg wrote: post #177

Earlier quoted context omitted.

That’s definitely not the case in Europe. Socialist movements were on the verge of power in many countries before WWII, and actually ruled or heavily conditioned the political life all over the continent until the end of the Cold War. The war effort had been dealt with by the early ‘50s at the latest; the following 40 years were dominated by the fight for social and economic equality. The war “helped” only in the sen…

Socialism gained only after World War I disrupted incumbent powers and wealth. World Wars I and II really need to be considered as a unit. War continued into the '20s in Eastern Europe and then resumes in 1936 in Spain. See "War of the World" by Niall Ferguson. Socialism was not that strong before WW I destroyed the power structures of the German, Russian, Austro-Hungarian, and Ottoman Empires. The resumption of war…

Dan Carlin presents a similar case for treating the time period as one (maybe borrowed from Ferguson). Thanks for reading recommendation.

Re: Economists Are Rethinking the Numbers on Inequality

#219

Post by chipotle_coyote » Wed, Dec 04, 2019, 8:59 PM UTC

kofejnik wrote: post #94

SketchySeaBeast wrote: post #76

Earlier quoted context omitted.

That's silly - compared to cavemen, even workers in third world countries are "rich", being able to trade things for goods and services and not being required to hunt and gather. Inequality solved?

yes, exactly; to have equality, you'll have to reduce everyone to the lower common denominator, which will be rather low Also, I don't see why exactly inequality is inherently bad. I'm poorer than Bezos, _and that is a good thing_. Pretty much like Steph Curry is better than me at basketball and so he should have a lot more ball possesion should we be playing on the same team, Bezos is much better than me in allocati…

It's a bit of a strawman to take arguments of the general form "we should enact policies to reduce inequality" and implicitly restate them as "we should enact policies that force perfect equality," then argue against that restatement, don't you think?

Re: Economists Are Rethinking the Numbers on Inequality

#220

Post by sokoloff » Wed, Dec 04, 2019, 9:03 PM UTC

xorfish wrote: post #198

sokoloff wrote: post #173

Earlier quoted context omitted.

It might be sound strategy for an endowment to give up upside in the most raging of bull markets that we’ve ever seen in exchange for lower drawdown in down markets. A low beta portfolio underperformed (by definition) in 2009-2019. I’m a staunch proponent of passive index investing so I suspect we largely agree on philosophy, but the mere fact that someone underperformed in the somewhat historically anomalous market…

https://globalbetaadvisors.com/the-yale-myth-analyzing-the-p... Endowements have mostly a negative alpha when using a 4 factor model.

That article states they outperformed when measured over a 10, 15, 20, and 25 year period and underperformed over a 5 year period. (See the table. The longer periods include the more recent periods meaning they had strong outperformance early that more than made up for the recent under.)

Is that evidence that they’re dramatically underperforming? It seems the story is mixed and you could argue either way depending on whether you think the last 5 years are more important than the prior 20 or not. (It might be, if you argue that something fundamental changed. That would fall into the “this time it’s different” which is generally falsified eventually.)