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Is it the Wealth Gap that's bad or the Empathy Gap that comes with it?

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Re: Is it the Wealth Gap that's bad or the Empathy Gap that comes with it?

#51

Post by VLM »

danharaj wrote: post #33
RodericDay wrote: post #13

Earlier quoted context omitted.

Exactly. Wealth isn't a zero-sum game, but power/influence is.

If wealth weren't power, then wealth wouldn't be wealth.

There's also the utility argument.

If I'm the best farmer its probably in the entire cultures best interest if I get the most farmland because we'll share in the utility of an average increase in production despite the unfair concentration.

If, people earn their pile of wealth by providing the most utility, then them having it is naturally great news. On the other hand if they got their pile via less than fair means, and they are not using their pile of wealth to maximize societal utility, well, then there's no real loss in taxing it away from them, if they're not the "best holders" of that wealth.

Re: Is it the Wealth Gap that's bad or the Empathy Gap that comes with it?

#52

Post by Kalium »

Terr_ wrote: post #2

It's not just empathy in the social buddies sense, but also that -- to quote a study name -- "Higher social class predicts increased unethical behavior." Abstract: http://www.pnas.org/content/109/11/4086 PDF: http://www.pnas.org/content/early/2012/02/21/1118373109.full... And yes, there are some hints to causation in there, where a participant was made "wealthier" (in a game context) and then differences were observe…

If memory serves, there's a critical detail that isn't in this study and wasn't checked by it. "Higher social class" people cheat to help themselves and "lower social class" people cheat to help one another when both are given salient opportunities.

Neither group is more honest than the other.

Re: Is it the Wealth Gap that's bad or the Empathy Gap that comes with it?

#53

Post by flubert »

daodedickinson wrote: post #20

Is it bad that we don't empathize with the Sentinelese? If they knew about us they would feel worse because all of their comparisons, all of their sensations and evaluations would change. The problem is that the poor cannot sense the presence of the rich without immense pain. Neither redistribution, nor empathy are as palliative as ignorance in this case.

What if we went in the opposite direction. Let's say we discovered another more advanced civilization on a relatively nearby star. I wonder how bad would people on earth would now feel, and how the feelings would be distributed. Would rich people be more affected or poor people? Would some people find excitement in trying to attain what the aliens had? Would others become despondent? Would it be a complete non-event because they are so distant?

Re: Is it the Wealth Gap that's bad or the Empathy Gap that comes with it?

#54

Post by paulpauper »

rayiner wrote: post #35
white-flame wrote: post #11

If the poor end of the wealth gap are still better off than 90% of the rest of the world, why does the wealth gap matter? That was my thinking for quite a while. However, the one thing that happens here in the US is that the wealthy have more representation and power in the legal system. Be it federal or local, the systems tend to get slanted against the not-wealthy because the wealthy take over the communications ch…

Even leaving aside rich using their status to solidify their position, consider this: are the policies that maximize GDP and lead to high wealth inequality the same policies that maximize the prosperity of the middle 50% of the population? No economic rule I know of guarantees that to be the case. Wealth isn't created in a vacuum. Wealth can only be created in places with a high level of social order. That social ord…

I've heard of this argument. 'Why do the rich need so much money? Why not just create a 'wealth cap'? The problem is, capitalism is about incentives. When you create a negative incentives, it creates externalities, possibly in the form of companies moving overseas, job loss, and economic stagnation. Second, is it fair for someone or some entity to confiscate what is not theirs, beyond taxes? Third, capitalism is expensive. Venture capital is funded by wealthy, an example being the Space-x and Blue Origin rocket programs, both very costly and funded by billionaires Musk and Jeff Bezos. If taxes were much higher, such programs may not exist.

Most venture capital is private:

http://si.wsj.net/public/resources/images/MK-CQ161_KEYWOR_16...

http://www.wsj.com/articles/humanitys-last-great-hope-ventur...

High corporate tax rates create an economic incentive for companies to move factories and offices overseas through 'inversions' to get a lower tax rate:

http://www.economist.com/blogs/economist-explains/2015/08/ec...

Relative to most developed countries, America has a very high corporate tax rate:

It’s a rock-solid fact that the U.S. corporate statutory tax rate is the highest among developed nations and is significantly higher than the average. According to 2014 data from the OECD, the combined federal and state statutory corporate tax rate for the United States is 39.1 percent. The average of the other 33 members of the OECD is 24.8 percent — 14.3 percentage points lower than the U.S. rate. Weighted by country GDP, the average for these 33 countries is 28.3 percent — 10.8 percentage points lower than the U.S. rate.

Re: Is it the Wealth Gap that's bad or the Empathy Gap that comes with it?

#55

Post by browseatwork »

Some studies showing effects of higher wealth on people below. Not perfect, and e.g. the simple correlation between unethical and law breaking is naive, but it's some data.

tl;dr: "Abtract: Seven studies using experimental and naturalistic methods reveal that upper-class individuals behave more unethically than lower-class individuals. In studies 1 and 2, upper-class individuals were more likely to break the law while driving, relative to lower-class individuals. In follow-up laboratory studies, upper-class individuals were more likely to exhibit unethical decision-making tendencies (study 3), take valued goods from others (study 4), lie in a negotiation (study 5), cheat to increase their chances of winning a prize (study 6), and endorse unethical behavior at work (study 7) than were lower-class individuals. Mediator and moderator data demonstrated that upper-class individuals’ unethical tendencies are accounted for, in part, by their more favorable attitudes toward greed."

http://www.pnas.org/content/109/11/4086.short

One weird thing- these and some other studies I have read support poorer people have more empathy/make more eye contact in conversation and pay more attention to conversation partners/etc. Why then does that group seem on the whole to have more antagonism towards wealthier people (than vice versa)?

Re: Is it the Wealth Gap that's bad or the Empathy Gap that comes with it?

#56

Post by pierrebai »

The main problem is viewing the wealth inequality as a state instead of an outcome. The problem is not in the inequality in itself but in the process and environement that result in the inequality. A country with higher inequality is very likely one where opportunities and power are inequal.

(And to address a comment I read about inequality being a reflection of ability and efficiency: I think we're better off with some inneficiency if it means more people have control over their lives. No, farm lands should not go to the most efficient farmers. It should be spread to distribute the most well-being to the most people.)

Re: Is it the Wealth Gap that's bad or the Empathy Gap that comes with it?

#57

Post by wavefunction »

paulpauper wrote: post #38

Maybe we need to come to terms with the fact that the http://greyenlightenment.com/the-meritocracy-we-dont-underst... meritocracy is one stratified by IQ, with some having the cognitive potential to produce more merit than others, and those smarter people will tend to rise to the top socially and economically, too. But the benefit is we get new technologies, job creation, and higher standards of living. That doesn't…

We don't live in meritocracies.

Re: Is it the Wealth Gap that's bad or the Empathy Gap that comes with it?

#58

Post by lambdasquirrel »

[Shameless plug. I'd tried to write about this as well.]

We got into this journey for humble reasons: So that we don’t have to worry about surviving. So that we could take care of things once and for all.

What does it mean then, if that is what’s really disconnecting? This cheap sense of comfort, and not having to care about unfairness?

https://medium.com/@pierre.flying.squirrel/on-inequality-1e7...

Re: Is it the Wealth Gap that's bad or the Empathy Gap that comes with it?

#59

Post by mattzito »

tomp wrote: post #24
sharemywin wrote: post #14

Earlier quoted context omitted.

use lobbyists. throw lots of soft money at politics. hold bazillions off shore so they can avoid as many taxes as possible. become patent trolls. buy back their own stock so they make themselves rich while screwing ordinary investors and employees and companies. pay less in taxes than their secretaries. Colluding into oligopolies and monopolies so that can extract monopoly profits. stop spending in a recession then c…

> buy back their own stock so they make themselves rich while screwing ordinary investors and employees and companies I'm not sure how this is valid reasoning... Aren't stocks "bought-back" on the public market? If so, then buybacks would push up the stock price, which would benefit arbitrary investors directly (those who were willing to sell at a slightly higher price) and all investors indirectly.

I'm not 100% sure this is what the GP was referring to, but a common (and totally legal!) technique to prop up a flat or trending downward company is to start a share buyback program. You take cash that you have no idea what to do with anyway, and rather than return it to investors through a dividend, you start buying back shares. That props up your EPS, since there are fewer shares on the market, and you continue to make your numbers.

In addition, this helps to keep your share price high/growing, which benefits insiders who then sell the stock, knowing that the fundamentals of the business are shaky.

The best part is that all of this is done in the open, it's just that typical retail investors are not necessarily sophisticated enough to understand what's happening, and accept the company's argument that they're buying back their stock because it's "undervalued"

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