Is Inequality Inevitable? • Hacker News Board

Re: Is Inequality Inevitable?

#511

Post by tremon » Thu, Nov 07, 2019, 11:28 AM UTC

username90 wrote: post #477

vannevar wrote: post #397

Earlier quoted context omitted.

It's not part of the model because, if you're studying how wealth gets distributed rather than how it is produced, it doesn't matter. I'm guessing that your disquiet at this notion comes from the possibility that everyone is creating their own wealth, and to some extent that is no doubt true. But if you start with the simplifying assumption that everyone's wealth creation ability is equal, and you just look at distri…

> Since virtually all human traits follow a Gaussian distribution, it seems like whatever the wealth-building factor is, it would also follow a Gaussian distribution. But wealth follows more of a power law distribution. You never encounter anyone 1000 times taller than average, but there are many people 1000 times wealthier than average. This is nonsense. Lets take an easy example, books, people don't want to waste t…

This means that a small difference in skill leads to a large difference in sales

That does not follow at all from your initial observation. You could just as easily state that a small difference in exposure leads to a large difference in sales, thereby taking skill out of the equation again, and thus supporting the GP's initial argument.

Re: Is Inequality Inevitable?

#512

Post by zygimantasdev » Thu, Nov 07, 2019, 11:30 AM UTC

abdullahkhalids wrote: post #454

sdfin wrote: post #334

I don't get why lately the trend it to focus in inequality instead of focusing in poverty. I mean, if the % of poverty decreases, then economy is moving in a good direction, in spite of inequality, right? Suppose you had one million, and somebody else has one thousand millions, there would be a large gap, but I wouldn't consider it as negative. If there are arguments against what I wrote I would gladly read them and…

Inequality is bad because political power is correlated to wealth. As soon as we switch to a political system where Charles Koch has the same political power as the minimum wage janitor working in his office, I will stop fighting economic inequality.

I think your goal is impossible. Even in soviet union that wasn't the case. The best specialists (let's say top surgeons) will always have more influence. If you know that your survivability rate is 50% higher at one surgeon hands than the rest - won't you pay/do whatever you can to survive?

Re: Is Inequality Inevitable?

#513

Post by tsimionescu » Thu, Nov 07, 2019, 11:33 AM UTC

kortilla wrote: post #456

tsimionescu wrote: post #447

Earlier quoted context omitted.

Why is anyone entitled to own a chip fab? Why is some rich daughter entitled to own a chip fab? Because she is in the current system, while anyone else would have to work their whole lives, and convince hundreds of others to work with them, to create a chip fab, if they wanted to own one.

> Why is anyone entitled to own a chip fab? Why is anyone entitled to own food? If someone invests their resources to have something built (or help make it themselves), why wouldn’t they be entitled to own it? The rich daughter gets to own it because that’s what the owner wanted and the thing about owning something generally is deciding its fate. If someone builds themselves a house out of wood they chop from trees t…

My proposal is that no one person is entitled to own vastly expensive items that required the work of countless people to create. Those items should generally be collectively owned by the people who designed and built them. The profits from operating them should go to the people operating them (which includes marketing and sales people and whatever else is needed), in some democratically chosen percentage.

I said nothing about the state in this. I am still talking exclusively about private property.

And as for food, I believe people are entitled to life, and by implication to anything required to sustain it, such as food, medication, water, air etc. The exact means for realizing this entitlement (free food? UBI? I don't know) are not clear, but the fact that you can starve to death in a country with enough food to feed the whole medieval world is a travesty.

Re: Is Inequality Inevitable?

#514

Post by tremon » Thu, Nov 07, 2019, 11:33 AM UTC

piokoch wrote: post #470

vannevar wrote: post #397

Earlier quoted context omitted.

It's not part of the model because, if you're studying how wealth gets distributed rather than how it is produced, it doesn't matter. I'm guessing that your disquiet at this notion comes from the possibility that everyone is creating their own wealth, and to some extent that is no doubt true. But if you start with the simplifying assumption that everyone's wealth creation ability is equal, and you just look at distri…

I am not sure we can ignore wealth creators, surely they want to have an impact on wealth distribution, I can't imagine sane model that would just ignore this factor.

But then, what is a "wealth creator"? Is a teacher a wealth creator? Were the parents of Bill Gates wealth creators? Were Elon Musk in need of a heart transplant, would the surgeon performing it be a wealth creator? Would the heart donor be? Would the director of said hospital be one?

Re: Is Inequality Inevitable?

#515

Post by nkkollaw » Thu, Nov 07, 2019, 11:45 AM UTC

Inequality is inevitable.

We are not born equal. Some people are smarter, some people are better-looking, some people have more energy, are more motivated (or the opposite).

We can try and do everything we can so that everyone has the same opportunity to succeed, but if you want the same outcome you'd have to limit the smarter, better-looking, more energetic people so that their outcome is lowered to be the same as everyone else, and I don't think this would be positive for anyone.

Re: Is Inequality Inevitable?

#516

Post by username90 » Thu, Nov 07, 2019, 11:50 AM UTC

tremon wrote: post #511

username90 wrote: post #477

Earlier quoted context omitted.

> Since virtually all human traits follow a Gaussian distribution, it seems like whatever the wealth-building factor is, it would also follow a Gaussian distribution. But wealth follows more of a power law distribution. You never encounter anyone 1000 times taller than average, but there are many people 1000 times wealthier than average. This is nonsense. Lets take an easy example, books, people don't want to waste t…

This means that a small difference in skill leads to a large difference in sales That does not follow at all from your initial observation. You could just as easily state that a small difference in exposure leads to a large difference in sales, thereby taking skill out of the equation again, and thus supporting the GP's initial argument.

But exposure in the form of publishers costs money. Therefore publishers try to find authors whose work will sell, meaning that skill also makes exposure easier. And once your books sell your skills are validated, so you will have even more opportunities. But if the books doesn't sell enough then you are thrown away, and the publisher lost money. If you used your own money then you lost money betting on yourself, money didn't help you earn money here it just gave you more leverage to lose/earn more.

This is why people say "The first million was the hardest", because after you have used their skills to make a million others will trust your skills and thus give you more exposure and opportunities. So winning a million on the lottery wouldn't help much, it gives you capital but it doesn't validate your skills which was the most important part.

Of course I am not saying that luck doesn't play a part, just that earning power doesn't follow a Gaussian distribution.

Re: Is Inequality Inevitable?

#517

Post by bumby » Thu, Nov 07, 2019, 12:13 PM UTC

username90 wrote: post #475

vannevar wrote: post #397

Earlier quoted context omitted.

It's not part of the model because, if you're studying how wealth gets distributed rather than how it is produced, it doesn't matter. I'm guessing that your disquiet at this notion comes from the possibility that everyone is creating their own wealth, and to some extent that is no doubt true. But if you start with the simplifying assumption that everyone's wealth creation ability is equal, and you just look at distri…

> someone with 1 million dollars is astronomically more likely to make another million dollars than someone with 100 dollars, even if the two people are otherwise identical I'm not sure this is correct, at least not on average. Take two average persons, give one of them a million dollar, then watch what their net income is the next 10 years. I'd bet that the one you gave a million dollars will have used up a large pa…

The book "The Meritocracy Trap" points out that inter-generationally this isn't true.

More money helps fund better training which leads to elite networking/training (elite colleges, for example) which leads to well-paying, high status jobs and the cycle continues. Granted, it's not just money alone, but the major theme of the book is that high income from labor (rather than inherited wealth) is a positive feedback loop passed along generational lines and concentrated among the upper quintile of incomes

Re: Is Inequality Inevitable?

#518

Post by [deleted] » Thu, Nov 07, 2019, 12:14 PM UTC

vannevar wrote: post #397

SiVal wrote: post #193

There is a popular political perspective that rules on campus these days that treats wealth as something that just magically exists and is simply "redistributed" by one means or another like, say, a phase change in physics where no magnetism/charge/energy/etc. is ever created or consumed. I waited for a point in their model where people actually produced wealth and consumed it, made something or ate it, in addition t…

It's not part of the model because, if you're studying how wealth gets distributed rather than how it is produced, it doesn't matter. I'm guessing that your disquiet at this notion comes from the possibility that everyone is creating their own wealth, and to some extent that is no doubt true. But if you start with the simplifying assumption that everyone's wealth creation ability is equal, and you just look at distri…

[deleted]

Re: Is Inequality Inevitable?

#519

Post by amalcon » Thu, Nov 07, 2019, 12:14 PM UTC

username90 wrote: post #477

vannevar wrote: post #397

Earlier quoted context omitted.

It's not part of the model because, if you're studying how wealth gets distributed rather than how it is produced, it doesn't matter. I'm guessing that your disquiet at this notion comes from the possibility that everyone is creating their own wealth, and to some extent that is no doubt true. But if you start with the simplifying assumption that everyone's wealth creation ability is equal, and you just look at distri…

> Since virtually all human traits follow a Gaussian distribution, it seems like whatever the wealth-building factor is, it would also follow a Gaussian distribution. But wealth follows more of a power law distribution. You never encounter anyone 1000 times taller than average, but there are many people 1000 times wealthier than average. This is nonsense. Lets take an easy example, books, people don't want to waste t…

This is itself nonsense. It presumes several obviously false things:

- That people who are bad at writing books are either equally bad at everything, or derive most of their income from writing books. "Don't quit your day job" is a meme for a reason.

- That writing quality (by some metric), as opposed to marketing, is the primary driver of book sales. Sales of Twilight demonstrate otherwise. It's even more clear in music: see any one-hit wonder from a past decade. In many cases, people who liked it then now wonder why.

- That the economic model of book sales is representative of the economy as a whole. Books are almost pure intellectual property. Intellectual property is typically characterized by high development costs recouped through high margins. Services and commodity physical goods are typically characterized by low development costs and low margins, with non-commodity physical goods lying somewhere in between. The latter categories make up most of the global economy, so most of the economy doesn't meaningfully compare to books.

Re: Is Inequality Inevitable?

#520

Post by tremon » Thu, Nov 07, 2019, 12:20 PM UTC

WalterBright wrote: post #383

ihm wrote: post #227

Earlier quoted context omitted.

I don't think your comment is a good faith engagement with leftist understandings of value. This is the starting point of Marx's whole theory of capitalism (it's in the first few chapters of Capital) which is the labor theory of value. Namely, his starting point is that labor is identified with value. Wealth is created when raw materials and the means of production are combined with labor. In the capitalist theory of…

> his starting point is that labor is identified with value This is a large mistake. For example, spending an hour on an exercise bike is certainly a lot of labor input, but nothing of value, since nobody will pay you to cycle on an exercise bike.

You're making a large mistake too. For example, that nobody will pay you to cycle on an exercise bike does not mean your labor has no value -- after all, if you're in better health, you will be more productive in the hours you're not on that bike.

(to make my point more explicit: in Marx' definition of labor he implies labor of enterprise, not just spending calories. Just like your definition of value implies financial value, not just any positive outcome. I'm purposefully misrepresenting your definition of value just like you're purposefully misrepresenting Marx' definition of labor.)