Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Is Inequality Inevitable?

scientificamerican.com

Post reply on HN
Print view View original

521–530 of 628 posts

Re: Is Inequality Inevitable?

#521

Post by pflenker »

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…

I think you might be missing the point a bit. This is not about two people being otherwise equal, and one being given a million dollars.

The point is that someone who has a million dollars is in a position where it will be easier for him to make another million dollars, or at least it's more likely for him to be in that kind of position than for someone who does not have a million dollars.

Re: Is Inequality Inevitable?

#522

Post by username90 »

bumby wrote: post #517
username90 wrote: post #475

Earlier quoted context omitted.

> 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 lo…

I'm from Sweden were the things you are talking about doesn't apply, getting into our best colleges isn't particularly hard and private schools you have to pay for are almost non-existent. Yet there are still a significant gap in how much people earn, and kids from rich families still do much better in school and college than kids from poor families.

Re: Is Inequality Inevitable?

#524

Post by fuzzfactor »

notahacker wrote: post #266
Empact wrote: post #244

Earlier quoted context omitted.

According to the chart below, housing, food and beverage and other costs are up > 56% over the last 20 years. Granted, for many things in society, prices have declined thanks to manufacturing advances and trade, etc. The difference is between those who held dollars and had a 56%+ loss of value over 20 years, vs those who held the same in assets which appreciated at the same rate as the general increase, and so did no…

Who pays for their housing, food and beverages out of a stash of dollar bills accumulated 20 years ago though? The same chart shows the wages they buy their food and beverages with actually rising faster on average, and people saving their wages for a house in future or a pension fund for their future food and beverages tend to put it in places which pay interest. Granted, you're a lot worse off if you need to pay a…

>Who pays for their housing, food and beverages out of a stash of dollar bills accumulated 20 years ago

Very few people could afford to do this, but in some markets for home ownership those would be the only type that could actually afford to own a home any more.

The gold standard has always been there for thousands of years and is likely to remain for many forseeable lifetimes to come.

The structural problems (from the citizens' point of view) are a result of how & when the US declined to participate any longer.

Not much different than anyone else over the centuries who could once afford a little gold but no longer any at all.

Remember since the US dollar was always tied to gold (after foolishly withdrawing from additionally constitutionally mandated silver in an earlier century), then when that was later tied to the confiscation of gold from the citizens, that allowed the dollar to be more powerful than gold as long as US taxpayer's assets were strong, making the USA actually relatively affluent as a nation. Therefore the gold price worldwide could be stabilized at $35 per ounce for decades, indefinitely if the taxpayer's assets would have been truly worth preserving by the regime. This was as long as the dollar remained tied to gold, even though citizens had not been allowed to hold gold of their own for most people's lifetime by then. With income taxes skyrocketing beyond the "temporary 1 percent tax on income" needed to pay for wars, tremendous wealth was transferred to the federal government over the decades and held as gold, until the fed had more wealth than the citizens which is the opposite of how the US actually grew as a free country, back when prosperous stuff could just pop up anywhere without federal interference.

Then one day Nixon comes along and offers the US gold to the rest of the world for $36 per ounce. Citizens still not allowed to participate, but the Saudis for example being some really big ones having a faster appreciating asset that sizable took great interest because they could actually afford to trade a portion of their faster-appreciating asset for one with less forseeable upside at the time.

Then Nixon "opens up China" so there can sooner be a new lower living standard to decline towards, gradually of course which is generous because the taxpayers can be put into free-fall at any time without a parachute since then.

Re: Is Inequality Inevitable?

#525

Post by chewz »

duxut_staglatz wrote: post #479
chewz wrote: post #460

Earlier quoted context omitted.

> the poorer a person is the larger a percentage they are willing to risk Utility function is logaritmic.

Is there any evidence that it is?

Pretty common assumption. [1]

The need for money saturates slowly. Think about winning 1000 dollars (nice dinner pehaps), 10 000 (better car), 100 000 (larger appartment), .... , 10 000 000.

At some point it doesn't matter if its 200 000 000 or 300 000 000.

On the other hand a lotter ticket is 1$. What is the utility of 1$ - a can of coke pehaps. But the perspective of winning $1 000 000 - thats a nice idea to hold for a few days... So many people do despite the slim chances.

[] https://economics.stackexchange.com/questions/23952/is-the-u...

[] https://www.forbes.com/sites/rogerkay/2013/08/05/how-the-mar...

Re: Is Inequality Inevitable?

#526

Post by fuzzfactor »

w1nst0nsm1th wrote: post #235
Empact wrote: post #144

It should be self-evident that the accelerating inequality we’re witnessing is not the natural inequality of competition and the power law, easily explained by simple arithmetic. An accelerating and historically high broad societal effect is naturally a product of broad and unique properties of the current regime, rather than fundamentally consistent properties, which would naturally be seen across all time. What is…

It cames to my mind that that constant 2% inflation, and the constent effort to limit it to such level said to be good for economy, was indeed slowly impovishering the working class by the fact than increase rate of salary was not as high as increase in price. In short the price of good increase constantly, but we stop the inflation before it reach also salary, leading to inequal raise of cost of work (null) and cost…

This is by design since the early 1970's.

Re: Is Inequality Inevitable?

#527

Post by bumby »

username90 wrote: post #522
bumby wrote: post #517

Earlier quoted context omitted.

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 lo…

I'm from Sweden were the things you are talking about doesn't apply, getting into our best colleges isn't particularly hard and private schools you have to pay for are almost non-existent. Yet there are still a significant gap in how much people earn, and kids from rich families still do much better in school and college than kids from poor families.

Fair enough. At least here in the States, Scandinavian countries are often portrayed as more equitable on relative terms. Do you know how Sweden's inequality compares to the U.S. quantitatively?

The training for schooling outlined in the book is often independent of the school structure (e.g., tutoring, test prep etc.). The upper echelons didn't think it was uncommon to spend $100k per student on this extra training. The authors point was that training works and that the rich have more advantages to educating and training their kids

Re: Is Inequality Inevitable?

#528

Post by thendrill »

devcpp wrote: post #166
ryeguy_24 wrote: post #150

> "388 individuals possessed as much household wealth as the lower half of the world's population combined" My goodness! This completely shocked me. I wonder if we are all complicit in allowing this to happen. I know wealth buys power and vice versa, so it likely would be hard to change but aren't we all indirectly allowing this to happen?

Please don't automatically turn to socialism as the solution to this. Over-regulation is in part responsible for the crony capitalism we're in. You will find that most of these 388 individuals are heavily invested in lobbying to make sure regulations are on their side and hindering their competitors.

So it is our collective fault ?

Re: Is Inequality Inevitable?

#529

Post by boomlinde »

wang_li wrote: post #210
fzeroracer wrote: post #164

Earlier quoted context omitted.

This is nonsense and ignores that the rich and wealthy can actively destroy value on a far more massive scale. The damage fracking has done to the environment for example is far more than any homeless encampment and that's just one example. Most of the wealth from the poor is stolen through increasing rent seeking behaviors from landlords, insurance companies and lobbying. I could speak at length the ways banks organ…

>Most of the wealth from the poor is stolen through increasing rent seeking behaviors from landlords, insurance companies and lobbying. I could speak at length the ways banks organized things as to punish the poor by organizing deposits to occur after transactions so that they can charge overdraft fees or insurance companies deciding not to cover you because of pre-existing conditions. You could go on at length about…

> It is objective reality that the lifestyles of the bottom 60% are subsidized by the top 40% of tax payers.

You could turn the tables and say that the lower and middle classes subsidize employment terms that are favorable to the wealthy. To tax the top 40% because some subset of the top 40% can't pay the bottom 60% a living wage is just a way for the wealthy to extract further wealth from the middle class.

I'd say that both perspectives are valid ways to look at it, and won't pretend that either of them is "objective reality", but with a growing wealth gap it seems obvious to me who benefits most from this system.

Post reply on HN