Economists Are Rethinking the Numbers on Inequality • Hacker News Board

Re: Economists Are Rethinking the Numbers on Inequality

#61

Post by CharlesColeman » Wed, Dec 04, 2019, 3:10 PM UTC

rguzman wrote: post #31

60654 wrote: post #7

This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new. The major points of their work, and especially of Piketty's monumental _Capital for the 21st century_ still stand: that capital is a positive feedback loop in a way that labor is not; that mid-20th-century laws that put brakes on this feedback loop have been removed; th…

it seems odd to dismiss papers that challenges Piketty's and Saez's conclusions as nitpicky. in complex systems the devil is most often in the details. and not only that, but the sort of project that Piketty took on has many potential methodological pitfalls. so, small details could actually mean a given premise or conclusion is invalid. how would you suggest someone go about assessing whether a paper is nitpicky vs…

> note that i'm not taking a position on the conclusions of Piketty and Saez, just pointing out that re-stating their claims does not say anything about the papers that argue against them and calling such papers nitpicky seems like a particularly weak critique in this instance.

There's another angle: in a general-interest publication like the Economist, over-emphasizing nit-picky flaws that fail to effect the core arguments of a work can have the effect of giving general-interest readers the impression the work has more serious flaws than it actually has.

Re: Economists Are Rethinking the Numbers on Inequality

#62

Post by leto_ii » Wed, Dec 04, 2019, 3:12 PM UTC

el_cujo wrote: post #58

leto_ii wrote: post #13

A lot of this article reminded me of the techniques used by climate change deniers to sow doubt. Take for example the following: > Another correction concerns the tax reforms passed under Ronald Reagan in 1986. Apparent changes in top incomes around this reform account for about two-fifths of the total increase between 1962 and 2015 in the pre-tax incomes of the top 1% in Messrs Piketty and Saez’s estimates. Messrs A…

Looking at your methodology critically is crucial to all fields of science though, as is changing your conclusions and interpretations as more findings come forward. Dismissing someone outright for challenging something that has become dogma is anti-scientific even if that dogma is based on facts. If it's actually true, then it will stand up to scrutiny.

I absolutely agree. However I'm not at all sure Piketty's ideas are dogma. If anything he's the challenger to the neoliberal dogma.

Secondly, the fact that there are diverging sides to an issue doesn't mean those sides have the same likelihood of being true. To take a trivial example, flat-earthers are challenging the dogma that the Earth is round (spherical to be more precise) - should this mean that their position should be taken seriously?

Re: Economists Are Rethinking the Numbers on Inequality

#63

Post by pksdjfikkkkdsff » Wed, Dec 04, 2019, 3:13 PM UTC

SamBam wrote: post #19

pksdjfikkkkdsff wrote: post #16

Earlier quoted context omitted.

Afaik his finding are disputed. And even if not, why should it even be desirable to encourage labor? If capital is so great, people should seek owning capital, not seek to work more. As they say, savings plans start at 50$/month. It seems rather great that this opportunity exists (assuming it is true). The alternative is that you have to work and work until you die.

"Why doesn't everyone just get rich?"

Arguably, almost everybody in the Western world has gotten rich.

Go visit a medieval castle sometime. The standards that now everybody has required an army of servants in the old days.

It is just a hateful lie of the left to claim "being rich" is dependent on exploiting poor people.

Re: Economists Are Rethinking the Numbers on Inequality

#64

Post by Marazan » Wed, Dec 04, 2019, 3:13 PM UTC

taffer wrote: post #24

60654 wrote: post #7

This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new. The major points of their work, and especially of Piketty's monumental _Capital for the 21st century_ still stand: that capital is a positive feedback loop in a way that labor is not; that mid-20th-century laws that put brakes on this feedback loop have been removed; th…

> This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez [...] that capital is a positive feedback loop in a way that labor is not Well the article mentions that: > Matthew Rognlie, now of Northwestern University, argued that the rise in America’s capital share was accounted for by growing returns to housing, not by the shares and bonds which are held d…

Housing is capital

Re: Economists Are Rethinking the Numbers on Inequality

#65

Post by WhompingWindows » Wed, Dec 04, 2019, 3:13 PM UTC

airstrike wrote: post #44

Measuring income inequality in the US without looking at outsized wage gains abroad feels remarkably inaccurate. I'll copy-paste my reply to another thread from earlier this year: > But, wages haven't improved in the last 40 years for the average person ...in the US. Growing inequality in the US is driven by the fact that capital gains domestically have improved dramatically alongside wage gains abroad , while wage h…

Education just isn't a priority for Americans, it's not about partisan anger and vitriol --both sides don't prioritize educations. Polls of both parties' voters show that education is not a top issue, but rather social concerns, the economy, guns, immigration, trade, climate change, these are all given as much if not more political oxygen than education.

Re: Economists Are Rethinking the Numbers on Inequality

#66

Post by xorfish » Wed, Dec 04, 2019, 3:13 PM UTC

eutropia wrote: post #60

xorfish wrote: post #50

Earlier quoted context omitted.

> not on income or cap gains Why does it matter how it is taxed? If the capital returns 4% and is taxed at a 30% rate, you will have the same effect as if the capital is taxed at a rate of 1.15%. I think the biggest injustice is that return of capital isn't taxed at the same rate as income from labor. Someone who earns $100'000 from labor and $50'000 from return on capital should be taxed at the same rate as someone…

Taxing capital incentivizes putting it to work. If you only tax gains then people can endlessly horde wealth. Taxing the wealth itself makes hording unappealing... I think.

But hoarding wealth isn't a problem for inequality. It is that capital can be used to generate income.

Inflation is the process that incentivizes capital to be put to work.

Re: Economists Are Rethinking the Numbers on Inequality

#67

Post by coldtea » Wed, Dec 04, 2019, 3:14 PM UTC

rguzman wrote: post #31

60654 wrote: post #7

This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new. The major points of their work, and especially of Piketty's monumental _Capital for the 21st century_ still stand: that capital is a positive feedback loop in a way that labor is not; that mid-20th-century laws that put brakes on this feedback loop have been removed; th…

it seems odd to dismiss papers that challenges Piketty's and Saez's conclusions as nitpicky. in complex systems the devil is most often in the details. and not only that, but the sort of project that Piketty took on has many potential methodological pitfalls. so, small details could actually mean a given premise or conclusion is invalid. how would you suggest someone go about assessing whether a paper is nitpicky vs…

>in complex systems the devil is most often in the details.

In economics the devil often uses the details to bury larger issues (losing the forrest for the trees).

Re: Economists Are Rethinking the Numbers on Inequality

#68

Post by FabHK » Wed, Dec 04, 2019, 3:14 PM UTC

hervature wrote: post #11

60654 wrote: post #7

This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new. The major points of their work, and especially of Piketty's monumental _Capital for the 21st century_ still stand: that capital is a positive feedback loop in a way that labor is not; that mid-20th-century laws that put brakes on this feedback loop have been removed; th…

I had a very different takeaway from Piketty's book. Namely, that inflation (primarily hyper inflation) has been the only force to reduce income inequality. For example, Jeff Bezos is much more affected than I am if the government decides to give everyone a $1B. Thus, governments looking to end income inequality shouldn't be afraid of high inflation.

> Namely, that inflation (primarily hyper inflation) has been the only force to reduce income inequality.

Inflation, and war.

Re: Economists Are Rethinking the Numbers on Inequality

#69

Post by carlob » Wed, Dec 04, 2019, 3:14 PM UTC

xorfish wrote: post #50

60654 wrote: post #7

This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new. The major points of their work, and especially of Piketty's monumental _Capital for the 21st century_ still stand: that capital is a positive feedback loop in a way that labor is not; that mid-20th-century laws that put brakes on this feedback loop have been removed; th…

> not on income or cap gains Why does it matter how it is taxed? If the capital returns 4% and is taxed at a 30% rate, you will have the same effect as if the capital is taxed at a rate of 1.15%. I think the biggest injustice is that return of capital isn't taxed at the same rate as income from labor. Someone who earns $100'000 from labor and $50'000 from return on capital should be taxed at the same rate as someone…

Before income tax, nobody had any idea about who was making what. Fast forward 100 years and we still have no idea about who holds how much capital. Even if you disagree on a universal wealth tax (just like we have for income) there is an argument to be made that it is important information to policymakers.

Other than that Piketty argues that larger wealth means larger returns (per unit capital) and that is a very strong argument against a flat capital gains tax.

Moreover I think wealth can be used in ways which don't necessarily produce an income: for influence, as collateral...

Re: Economists Are Rethinking the Numbers on Inequality

#70

Post by pksdjfikkkkdsff » Wed, Dec 04, 2019, 3:15 PM UTC

dls2016 wrote: post #29

pksdjfikkkkdsff wrote: post #16

Earlier quoted context omitted.

Afaik his finding are disputed. And even if not, why should it even be desirable to encourage labor? If capital is so great, people should seek owning capital, not seek to work more. As they say, savings plans start at 50$/month. It seems rather great that this opportunity exists (assuming it is true). The alternative is that you have to work and work until you die.

What the hell use is capital without labor?

A roof over you head can be very useful in the rain.