Inequality and Skin in the Game • Hacker News Board

Re: Inequality and Skin in the Game

#51

Post by bko » Wed, Dec 28, 2016, 5:25 PM UTC

bbctol wrote: post #6

I think the distinction between those who have "skin in the game" and those who survive on arbitrary indicators of prestige is an important one culturally , but especially as applied to Trump, I still think it's weird Taleb doesn't address any distance between perceived skin in the game and actual. Saying "Trump's a businessman who takes real risks, Krugman's just a writer who will never answer for mistakes" ignores…

Yes Trump did make most of his money using borrowed funds and leverage. However, the lenders in that case have skin in the game and the debtors presumably exert some restraint on Trump. Trump did have his credit on the line as well as whatever personal assets he pledged. For every high profile bankruptcy there were likely many more in which everyone made out, otherwise no one would extend him any credit.

Bankruptcy laws add a lot of value to a functioning capitalism and debtor and obliger are both aware of the laws. Perhaps you don't agree with them or Trump abused them but that's a different story.

Trump was smart in that he likely structured his financial dealings in a way to limit his personal losses, but the banks knew they and Incorporated that into their offer.

But it's true that more recently he has been a celebrity and leased out his name. However, since his name is his primary asset, you can still say he has skin in the game.

Also I would add that Trump's celebrity is due to something in his control. Whether it's because he's a demogouge, visionary or marketer extrodinaire, he is successful on his merits. Taleb would probably contrast that to some academic on an unelected government panel somewhere due to personal connections

Re: Inequality and Skin in the Game

#52

Post by bprieto » Wed, Dec 28, 2016, 5:46 PM UTC

PavlovsCat wrote: post #48

sosodaft wrote: post #39

Earlier quoted context omitted.

Well said. It always pains me to see people criticising capitalism for easy points, when despite its flaws it has brought us an age of unprecedented equality and prosperity. That's not to say it's necessarily the best "system" for the future, but tearing it down because it is the Establishment and tearing down the Establishment is cool is counterproductive.

> unprecedented equality Right. Which is why when I kill someone, I go to jail, and when George Bush attacks a country, the crickets chirp. > tearing it down because it is the Establishment and tearing down the Establishment is cool is counterproductive. More importantly, it's a straw man. edit: if anyone is seriously debating that's a straw man, use your words.

unprecedented equality != perfect equality

Unprecedented equality means that in a capitalistic (Western) society almost everybody eats a hot meal everyday day, has free time to enjoy, has an assortment of clothes, furniture and things, has a place to live with running water and electricity and appliances that run with said electricity.

All things that only the richest people could dream of enjoying just a couple of centuries ago.

Re: Inequality and Skin in the Game

#53

Post by yummyfajitas » Wed, Dec 28, 2016, 5:54 PM UTC

deyan wrote: post #18

yummyfajitas wrote: post #2

It is shocking that people continue to cite Piketty. His results have been more or less shot down completely - his measurements are unstable (taken), and insofar as he has shown r > g, this is primarily due to middle class household wealth (rognlie). Further, his results are only within country and don't apply globally (c.f. Milanovic). But his results are just so convenient and sound so cool. How can we discard them…

Is that actually true? In my research, i found that a number of scholars (including the ones you cite) critiqued aspects of Piketty's theory, but their papers read like either additions or clarifications. Further, the results are definitely not "convenient" - indeed, they go against a lot of prior research, and Piketty has done a remarkable job being open with both the data he uses and responding to others' arguments…

I agree with you that the mood affiliation of the field agrees with what you say. Taleb agrees with you as well.

I'm also agreeing with Taleb that the specific facts don't support Piketty, yet no one even discusses them. They just appeal to the zeitgeist. Somehow Piketty can survive Taleb and Rognlie knocking down what he asserts to be his core claims, as well as Milanovic showing that his work is hopelessly myopic (Piketty mentions Balzac and Jane Austen more than China and India). Specific facts don't matter, only the mood does.

Re: Inequality and Skin in the Game

#54

Post by pitaj » Wed, Dec 28, 2016, 5:56 PM UTC

collyw wrote: post #47

sosodaft wrote: post #39

Earlier quoted context omitted.

Well said. It always pains me to see people criticising capitalism for easy points, when despite its flaws it has brought us an age of unprecedented equality and prosperity. That's not to say it's necessarily the best "system" for the future, but tearing it down because it is the Establishment and tearing down the Establishment is cool is counterproductive.

"it has brought us an age of unprecedented equality and prosperity" People say this, yet when I have traveled in some of the poorest countries in the world (Zambia and Nepal for example) they seem a lot more capitalistic than Europe / the US. It seems to bring some people wealth at the expense of others.

What do you mean by "capitalistic"?

Re: Inequality and Skin in the Game

#55

Post by vannevar » Wed, Dec 28, 2016, 5:59 PM UTC

yummyfajitas wrote: post #50

Analemma_ wrote: post #46

Earlier quoted context omitted.

You're definitely not getting away without providing a citation for that. In the couple months after Capital was published, I saw a couple attempts at refutation, including one in the Financial Times, but Piketty responded to all of them with convincing rebuttals. I would like to see this "complete shoot-down" you claim exists.

Taleb's article specifically cites articles which prove mathematically that Piketty methodology would show rising inequality among the super rich even if it didn't exist. Did you even read it? I will provide others when I'm not on mobile. You can also Google "Piketty rognlie" and it'll be near the top.

Taleb talks about a couple of articles he wrote, but unfortunately does not cite them, nor does he provide any details from them that would support your assertion that they "prove" anything, mathematically or otherwise. And none of the third-party articles linked from the footnotes contains any such critique of Piketty.

Re: Inequality and Skin in the Game

#56

Post by yummyfajitas » Wed, Dec 28, 2016, 6:01 PM UTC

vannevar wrote: post #55

yummyfajitas wrote: post #50

Earlier quoted context omitted.

Taleb's article specifically cites articles which prove mathematically that Piketty methodology would show rising inequality among the super rich even if it didn't exist. Did you even read it? I will provide others when I'm not on mobile. You can also Google "Piketty rognlie" and it'll be near the top.

Taleb talks about a couple of articles he wrote, but unfortunately does not cite them, nor does he provide any details from them that would support your assertion that they "prove" anything, mathematically or otherwise. And none of the third-party articles linked from the footnotes contains any such critique of Piketty.

You're right, Piketty is correct because Taleb did not format his citations in the manner you desire.

Re: Inequality and Skin in the Game

#57

Post by PavlovsCat » Wed, Dec 28, 2016, 6:05 PM UTC

bprieto wrote: post #52

PavlovsCat wrote: post #48

Earlier quoted context omitted.

> unprecedented equality Right. Which is why when I kill someone, I go to jail, and when George Bush attacks a country, the crickets chirp. > tearing it down because it is the Establishment and tearing down the Establishment is cool is counterproductive. More importantly, it's a straw man. edit: if anyone is seriously debating that's a straw man, use your words.

unprecedented equality != perfect equality Unprecedented equality means that in a capitalistic (Western) society almost everybody eats a hot meal everyday day, has free time to enjoy, has an assortment of clothes, furniture and things, has a place to live with running water and electricity and appliances that run with said electricity. All things that only the richest people could dream of enjoying just a couple of c…

Okay, and what about equality before the law and other such things? "Be happy you have a home, shut up", or what?

Re: Inequality and Skin in the Game

#58

Post by yummyfajitas » Wed, Dec 28, 2016, 6:25 PM UTC

jrochkind1 wrote: post #38

yummyfajitas wrote: post #2

It is shocking that people continue to cite Piketty. His results have been more or less shot down completely - his measurements are unstable (taken), and insofar as he has shown r > g, this is primarily due to middle class household wealth (rognlie). Further, his results are only within country and don't apply globally (c.f. Milanovic). But his results are just so convenient and sound so cool. How can we discard them…

Cites for critique of Picketty's methodology please?

Read the article. Taleb mentions them.

Re: Inequality and Skin in the Game

#59

Post by sqrt » Wed, Dec 28, 2016, 6:28 PM UTC

golergka wrote: post #31

GavinMcG wrote: post #25

Earlier quoted context omitted.

But it is one that you need to already have been educated about. The author seems to be assuming that all their readers have CS degrees or have read a certain narrow slice of technical content elsewhere. It's bad writing for a generalist platform like Medium.

CS degree? I was completely sure Markov chains were high school material

I'd be shocked if more than 5% (and even that's a stretch) of fresh high school graduates in the US knew what a Markov chain is.

Re: Inequality and Skin in the Game

#60

Post by curun1r » Wed, Dec 28, 2016, 6:56 PM UTC

Speaking personally, having "skin in the game" matters very little to me when it comes to resenting those who have achieved great wealth. What matters to me is someone's effect on the rest of society. It matters how someone made their money but it also matters who else benefitted from that person's success and who else suffered.

For instance, I don't begrudge Larry Page or Sergei Brin their billions. Neither had much skin in the game, they were just pursuing a project they were passionate about after college, largely using someone else's money. Had they failed, they'd likely have incurred some opportunity costs of not having worked a more lucrative job, but wouldn't have lost much else. But what makes their wealth acceptable to me is what they created. Google has made my life and billions of other people's lives easier.

Contrast this with a hedge fund manager who's also a billionaire or a Mitt Romney -esque corporate raider who doesn't create anything and often leaves human misery in their wake. These billions are often made while incurring far more risk than that borne by the creative types and, yet, I still find their wealth the more detestable.

Buddhists have the concept of "right livelihood" that followers are supposed to adhere to. And it's always resonated with me. Whether or not one gets rich is independent of what truly matters...how much your life and work benefit others. I don't dislike people for being rich, I dislike people for living their lives in service only to themselves. Having "skin in the game" is a tangential property that is meaningless to me on its own.