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Economic Inequality

paulgraham.com

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Re: Economic Inequality

#251

Post by muzz »

wstrange wrote: post #154
WalterBright wrote: post #86

Earlier quoted context omitted.

They did break up. Also, many wealthy Britons moved to Barbados to avoid the taxes.

I never heard the theory that they broke up because of the tax rates. Thought it had something to do with Yoko :-) Tax avoidance is a significant issue that will require some international coordination - but I do think it is a solvable problem. See for example the Facebook co-founder who had to pay an exit tax to move his assets offshore.

Current share price of Facebook is roughly ~4x what he sold many of his shares at

Re: Economic Inequality

#252

Post by oidlkwdlkwqdn »

foldr wrote: post #96

It's hard to take this seriously when pg asks us to believe, on the basis of a single out of context quote, that Stiglitz is a simple-minded victim of the "pie fallacy". Stiglitz explicitly anticipates and addresses this criticism: > One can think of what’s been happening in terms of slices of a pie. If the pie were equally divided, everyone would get a slice of the same size, so the top 1 percent would get 1 percent…

The argument of the "pie fallacy" is itself a fallacy. The rate of capital generation compared to the rate of capital transfer is actually quite small. Apple didn't pull its $200+B cash reserves out of thin air purely by creating value: it obtained them through capital transfer from its customers. Sure they created some value along the way, but that doesn't change the primary source of their money. Not only that, but an individual's ability to generate new capital is proportional to that person's existing capital stores.

Therefore it is completely accurate to idealize the economy for the bottom 90% of citizens as existing in a zero sum state.

Re: Economic Inequality

#253

Post by notahacker »

wildmusings wrote: post #130
GavinMcG wrote: post #112

Earlier quoted context omitted.

It's one metric. And yes, one of its weak points is that my student loans making me less wealthy than the debt-free homeless person is (of course ) not the whole story. But that's one narrow slice. On the scale of 80 people with billions upon billions vs. half of everyone else , it's hardly a disingenuous statistic.

The only reason to use net-worth for such a statistic is to have demagogic sound bites. Most people have negative or very low self-worth because of totally normal and serviceable debt, regardless of whether they're poor or well off. Net worth, i.e. wealth, ignores future earning potential, which is most people's main asset. Repeating the statistic again doesn't change that.

On a global scale, this is nonsense. The number of people globally who have negligible net worth because they earn less than $10 per day vastly exceeds the number of people who have negligible net worth because they've only just started paying down the mortgage on their McMansion and still have student loan repayments remaining.

The purchasing power of those 80 people isn't going to start looking insignificant if you change the basis for comparison to net wealth plus imputed future income streams.

Re: Economic Inequality

#254

Post by civilian »

cko wrote: post #214
xiler wrote: post #102

Earlier quoted context omitted.

There's nothing wrong with someone getting rich provided they contribute a proportional amount of value to society. Problem is that since the post-WII period (also called the Golden Age of Capitalism) such rewards have been happening less and less [1,2]. In fact, I think reducing inequality is essential for promoting productivity. [1] https://en.wikipedia.org/wiki/Post%E2%80%93World_War_II_econ... [2] https://upload.…

But is it wrong for a rich person to hoard wealth, or to spend only on luxuries for themselves? Why do they have to "contribute to society"? I'm by no means wealthy, and at my age of 29 I've donated more money than many of my coworkers. And I'm all for a portion of tax dollars supporting the underprivileged. But when I read about Larry Ellison's yacht-racing hobby, I think to myself, "good for him." He can spend his…

> Why do they have to "contribute to society"?

This gets to the core of the question! How did a rich startup person get wealthy anyway? They built something that people wanted. People said: "hey, that thing you built, I value it at $20 and you're giving it away at $10, so I'm happy to buy it!" Anyone who made money from business has already created wealth and contributed to society, via the market.

To the people who would disagree with me-- Look at your surroundings. Do you feel oppressed by the manufacturers of your laptop? Do you feel like you have no other option but to buy a $5 latte at the coffeeshop you're at? Are you being held at gunpoint by your new-used car? Do you wish the refrigeration oligarchs never existed? No! You are getting _insane_ value out of these relatively cheap items. Your $5 latte couldn't even exist a century ago. So it's okay that all the people who worked 40 hours a week to bring you your gadgets get a cut.

Re: Economic Inequality

#255

Post by WalterBright »

samastur wrote: post #241
tomjen3 wrote: post #204

Earlier quoted context omitted.

And you don't think the mechanics, aviators, etc who keep the billionaires flying are happy to have jobs now?

Sure they are, but that was not the argument I was half-jokingly making. What I was saying was that you can't hide meaningful amount of difference in tax rates between then and now in business lunches (which to the best of my knowledge are still around). On a more serious note though I would consider the law of diminishing marginal utility and its impact on economic activity.

Tax sheltering investments were huge.

Re: Economic Inequality

#256

Post by cryoshon »

hammerandtongs wrote: post #160

I LOVE that Paul Graham posted this just a day after posting Mark Twain's "corn-pone opinions" with no sense of irony or self awareness. """ "You tell me whar a man gits his corn pone, en I'll tell you what his 'pinions is."... The black philosopher's idea was that a man is not independent, and cannot afford views which might interfere with his bread and butter. If he would prosper, he must train with the majority; i…

I noticed this exact same thing. Funny how awareness of a cognitive trope doesn't confer protection, eh?

Anyways, hypocrisy haunts us all.

Re: Economic Inequality

#257

Post by clouddrover »

> If the rich people in a society got that way by taking wealth from the poor, then you have the degenerate case of economic inequality where the cause of poverty is the same as the cause of wealth.

Yes, that is the problem and is what's happening. Prior to the 1970s increases in productivity led to increases in household income. Since the 1970s productivity has increased but household income has stagnated. Workers are no longer seeing their return match their productivity.

http://stateofworkingamerica.org/charts/productivity-and-rea...

http://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_3...

Re: Economic Inequality

#258

Post by Frondo »

mtgx wrote: post #67
11thEarlOfMar wrote: post #41

To me, income inequality means: The rich get richer, the poor get poorer. But that is not the situation. In reality, the situation is: A rising tide raises all boats. The global pie is getting bigger because GDP is growing faster than the population: - GDP Growth since 1999 ~2.5% annually [0] - Population growth since 1999 ~1.3% annually [1] - % of world population living in extreme poverty has more than halved since…

> To me, income inequality means: The rich get richer, the poor get poorer. But that is not the situation. In reality, the situation is: A rising tide raises all boats. If that was the case, then most people's incomes (adjusted for inflation) would be higher than they were 40 years ago. But that's not true. However, it can be argued that low-income people can now buy "stuff" cheaper than they ever could. Whether that…

Yeah, poor people can buy tv sets and cell phones now. Those things are definitely cheaper than they used to be.

You know what's not cheaper than it used to be? The big ones: housing, health care, education.

That's the problem. People look at how almost everyone has a refrigerator, and a ton of poor people have tv sets, and think "they're not hard off at all!!!1! rising tides!! boates!!!" while ignoring how rents are skyrocketing and it took a major law to make health care even nominally affordable again.

Re: Economic Inequality

#260

Post by cryoshon »

thanatropism wrote: post #211
cryoshon wrote: post #176

Swing and a miss with this article. I wrote a full response at http://cryoshon.co/2016/01/02/a-response-to-paul-grahams-art... . I've abridged some of my comments/quotations for this comment. Let's break it down bit by bit: FTA: "I'm interested in the topic because I am a manufacturer of economic inequality." Well, not quite. The throughput of successful startup folks is never going to be enough to make a dent in the…

> the current flap about economic inequality is not about people wanting to become rich, it is about people wanting to get by In other words, it's about poverty.

Yes-- increasing poverty for the masses and increasing opulence for the wealthy, who rely on the masses to produce said opulence. You can see exactly why people are upset.
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