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How Paul Graham Gets It Wrong in “Economic Inequality”

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Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#61

Post by danhak »

Pyxl101 wrote: post #58
danhak wrote: post #35

Earlier quoted context omitted.

> Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. You are inventing a complete straw man. That is not what I want nor is it what most other people who are concerned about wealth inequality want. What we want are policies that do not make it so absurdly easy for those who already have access to cap…

> What we want are policies that do not make it so absurdly easy for those who already have access to capital to continue to accumulate wealth and influence at an exponential rate What specific policies are those? Most people who advocate for such policies recommend taxation, which is what the GP is referring to: the government forcibly seizes the money. The GP is not really addressing a straw man when the most commo…

Adjustments to the tax code can be revenue-neutral. Lower rates for earned income and higher rates on inheritance and investment income.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#62

Post by Pyxl101 »

danhak wrote: post #57
Pyxl101 wrote: post #50

Earlier quoted context omitted.

Excellent! Thank you for clarifying. It sounds like the concern is that some people hold a monopoly on power, such that good ideas don't compete on their merits. Is that a good way of saying it? I ask because that problem does not seem to me to be directly related to income equality. In communist societies everyone had very similar income, and yet a small group had all the power and functioned as kingmakers in busine…

> In communist societies everyone had very similar income... Again we're reverting to the straw man of 100% (or nearly) equal society. Our society must be unequal to some extent because capital is a reasonable and effective reward for figuring out how to best allocate resources. But extreme inequality prevents a large % of the population from fully developing, exploring and disseminating their talents, shutting them…

It's not a straw man. I'm not saying that any argument for income equality is tantamount to communism. I'm simply saying that you can have income equality and still lack a healthy business environment where ideas compete on merit. So the problem is whether ideas compete on merit, not income equality. Income equality is neither necessary nor sufficient for those other things.

Regarding Brin, I don't think he has as privileged a background as you seem to believe. He had a pretty humble beginning, beginning with his birth in Soviet Russia (where his parents were discriminated against for being Jewish), after which he immigrated to USA at age 6:

https://en.m.wikipedia.org/wiki/Sergey_Brin

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#63

Post by lisper »

solomatov wrote: post #27
lisper wrote: post #22

Earlier quoted context omitted.

Except that the data support a particular theory: extreme income inequality limits growth because growth is ultimately driven by broad-based consumption. If there's a plausible theory purporting to explain how the causality could possibly be the other way around, I haven't heard it.

There might be other factor affecting both inequality and economic growth. For example, consider culture, natural resources, climate, etc. If you can't find a plausible way to explain something (inequality causes lower economic growth), it doesn't mean that there's no other way to explain it. Actually, the history of science shows that explanation of effects might be very surprising. P.S. My comment doesn't support o…

> If you can't find a plausible way to explain something (inequality causes lower economic growth), it doesn't mean that there's no other way to explain it. Actually, the history of science shows that explanation of effects might be very surprising.

Indeed so. But the central principle of science is that at any time you (tentatively) accept the best available theory that is consistent with the evidence. Right now, AFAICT, that's the theory that concentrating wealth in a small minority reduces growth because it reduces demand.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#64

Post by bluecalm »

danhak wrote: post #35
sradu wrote: post #30

Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. The US is fundamentally different than Nordic countries, where socialism appears to be working: * The Nordic countries are tiny compared to the US. * They are highly educated. * Their society is homogenous. It seems like everybody is assuming that th…

> Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. You are inventing a complete straw man. That is not what I want nor is it what most other people who are concerned about wealth inequality want. What we want are policies that do not make it so absurdly easy for those who already have access to cap…

It depends how you define "we". It seems it's a very popular idea in Europe is a very high progressive income tax which punishes people who for example start their own businesses with close to 0 net worth, no capital and have a good year or two even if they haven't accumulated much wealth yet.

I am from one of the post communist countries and a party advocating 75% income tax for people who make more than 150k/year is gaining traction among my friends in tech. It is in fact a very common sentiment that "just tax the people who make a lot of money" is going to solve a lot of problems.

That's what the parent is addressing and it's in fact a very common view.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#65

Post by jrochkind1 »

zappo2938 wrote: post #25
danhak wrote: post #16

> Further, there are an abundance of studies that show that reducing economic inequality (even through redistributive means) actually boosts overall prosperity. To me, this sentence and the ones that follow are by far the most salient point. How many Zuckerbergs, Gates, Brins, Pages and Bezos are we missing out on due to the fact that huge swaths of our country do not have the ability to fully explore and develop the…

I can't think of anything more democratic than using money to vote on how to best allocate resources. The reward for doing well is to get more money to decide how that should then be allocated. This system works great until it crosses a threshold when the most talented consolidate the ability to decide how to best allocate resources into a small group of people. A small group of billionaires deciding how to allocate…

> A small group of billionaires deciding how to allocate resources is better but not by much than a small group of people at the Gosbank in the Soviet Union deciding how to allocate resources.

How is it better even at all, even not by much?

If we imagine that the small group of central planners were actually democratically elected (in the Soviet Union they were not, although they ideologically pretended to be), it's unequivicably _more democratic_ to have them making decisions compared to unelected billionaires who are not in any way accountable to voters.

I'm not quite sure what you mean by 'democratic' when you say you can't think of anything more democratic than those with more money having more political power. I don't see how there's some specific threshold where this becomes more or less true than it was at smaller level of inequality, although it's certainly _less_ democratic the greater the level of inequality, it seems fairly proportional to me rather than there being a 'threshold'.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#66

Post by lmm »

Pyxl101 wrote: post #38

Is economic inequality a problem in and of itself? Why? Economic quality seems like a red herring for actual issues like how well off people are. Is the actual concern about how poorly off the poor are? Imagine a thought experiment where aliens come to earth and give every human 100x the resources they have currently (or 100x a year's min wage), as an annuity. The poor are all now rich, and the wealthy can buy their…

Human values are complex, but most of us have the instinct that inequality is bad, just as we have an instinct that murder or theft is bad. Even if everyone had 100x what they have now, the inequality would still feel wrong to me.

In terms of ethical theories: from a utilitarian perspective, inequality causes unhappiness, and even a partially destructive redistribution of wealth would probably be better for the greatest happiness of the greatest number. Other approaches (e.g. virtue ethics) I'm less familiar with.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#67

Post by dragonwriter »

zappo2938 wrote: post #25
danhak wrote: post #16

> Further, there are an abundance of studies that show that reducing economic inequality (even through redistributive means) actually boosts overall prosperity. To me, this sentence and the ones that follow are by far the most salient point. How many Zuckerbergs, Gates, Brins, Pages and Bezos are we missing out on due to the fact that huge swaths of our country do not have the ability to fully explore and develop the…

I can't think of anything more democratic than using money to vote on how to best allocate resources. The reward for doing well is to get more money to decide how that should then be allocated. This system works great until it crosses a threshold when the most talented consolidate the ability to decide how to best allocate resources into a small group of people. A small group of billionaires deciding how to allocate…

Using money to vote on how to. allocate resources is plutocracy, which is pretty far from democracy.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#68

Post by dikdik »

angularly wrote: post #52
sradu wrote: post #30

Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. The US is fundamentally different than Nordic countries, where socialism appears to be working: * The Nordic countries are tiny compared to the US. * They are highly educated. * Their society is homogenous. It seems like everybody is assuming that th…

I agree, thinking the politicians can handle anything is naive. Politicians seldom make the situation better, mostly they make it worse while enriching themselves. Socialism don't work in the Nordic countries either. In Denmark where I am from we were in the top 5 richest countries only 60 years ago, before we introduced the Welfare State. Back then we actually had lower taxes than in the US. Since then we have been…

We're on a website called "Hacker News." We have the ability to make innumerable improvements to the way governments work. There is no reason to pick 1, 2, or 3. We can have anything in between. We can make something new, we can figure shit out. Not that it'll be easy, but we can...and we should.

All I'm reading in this thread is:" ______ system of government isn't perfect, so our only option is to keep doing what we have been doing even though we know it sucks."

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#69

Post by danhak »

Pyxl101 wrote: post #62
danhak wrote: post #57

Earlier quoted context omitted.

> In communist societies everyone had very similar income... Again we're reverting to the straw man of 100% (or nearly) equal society. Our society must be unequal to some extent because capital is a reasonable and effective reward for figuring out how to best allocate resources. But extreme inequality prevents a large % of the population from fully developing, exploring and disseminating their talents, shutting them…

It's not a straw man. I'm not saying that any argument for income equality is tantamount to communism. I'm simply saying that you can have income equality and still lack a healthy business environment where ideas compete on merit. So the problem is whether ideas compete on merit, not income equality. Income equality is neither necessary nor sufficient for those other things. Regarding Brin, I don't think he has as pr…

> I'm simply saying that you can have income equality and still lack a healthy business environment where ideas compete on merit.

And I don't dispute that at all. What I am saying is that society's prosperity is optimized somewhere between total equality and extreme inequality, and that we seem to be drifting further away from that point.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#70

Post by Jdam »

evgen wrote: post #41
sradu wrote: post #30

Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. The US is fundamentally different than Nordic countries, where socialism appears to be working: * The Nordic countries are tiny compared to the US. * They are highly educated. * Their society is homogenous. It seems like everybody is assuming that th…

Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. Because the state is neither corrupt nor incompetent; this is the big fear of the cyber-selfish libertarians you will find on HN. Tell you what, why don't you start your rant with a list of these rich politicians who will grow even richer. Just a sin…

> Because the state is neither corrupt nor _incompetent_

This needs to be proven. Oh wait, it is proven like every day. Just open a random newspaper on a random date. /european

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