Economic Inequality: The Simplified Version • Hacker News Board

Re: Economic Inequality: The Simplified Version

#81

Post by humanrebar » Tue, Jan 05, 2016, 3:43 AM UTC

cconroy wrote: post #35

nostromo wrote: post #11

Most people I know that are concerned about economic inequality aren't super bothered by self-made billionaires (Jobs, Zuck, and Gates to a lesser degree.) Mostly they are concerned about dynastic wealth (Waltons, Kochs) particularly when it's economic power intertwined with political power (Kennedys, Bushes, Clintons, Romneys). Outside of San Francisco, where many people feel real downward economic pressure from tec…

You are obviously biased. Im sure those tech gods affect politics as much as the Kochs -- but it is the kind of political choices that you are ok with. Therefore, they are the good guys and the Kochs are the bad guys. Not so sure things are that simple. E.g. Bill Gates and patents. Haha, I cannot believe I defended the Kochs.

The name Koch is all over NYC arts philanthropy, but don't tell anyone.

Re: Economic Inequality: The Simplified Version

#82

Post by HSO » Tue, Jan 05, 2016, 3:45 AM UTC

dools wrote: post #67

HSO wrote: post #43

> But economic inequality per se is not bad. Both essays feel like they are built on a strawman argument. Nobody serious said inequality was bad or good, not even Piketty. The discussion is about degrees, and PG adds nothing to it by arguing categorically. That we are talking degrees of inequality is also the reason why economists argue with statistics and do not differentiate much between specific causes or mechanis…

Nobody serious said inequality was bad or good Lots of very serious people say that inequality is bad: http://digitalcommons.bard.edu/hm_archive/333/ https://www.youtube.com/watch?v=cZ7LzE3u7Bw&mid=5328 http://www.economonitor.com/lrwray/2013/07/09/how-big-is-big... http://bilbo.economicoutlook.net/blog/?p=11245 http://moslereconomics.com/2009/09/30/inequality-nothing-to-...

From skimming the links provided, my impression is that these authors or texts address increases in inequality or the importance of the middle class (which presumes inequality). Can you show more directly where someone is arguing for/against inequality per se (as opposed to an argument about the proper degree of inequality)?

Re: Economic Inequality: The Simplified Version

#83

Post by viraptor » Tue, Jan 05, 2016, 3:47 AM UTC

HSO wrote: post #43

> But economic inequality per se is not bad. Both essays feel like they are built on a strawman argument. Nobody serious said inequality was bad or good, not even Piketty. The discussion is about degrees, and PG adds nothing to it by arguing categorically. That we are talking degrees of inequality is also the reason why economists argue with statistics and do not differentiate much between specific causes or mechanis…

> Nobody serious said inequality was bad or good, not even Piketty.

From the Capital ...:

> Inequality is not necessarily bad in itself: the key question is to decide whether it is justified, whether there are reasons for it.

Re: Economic Inequality: The Simplified Version

#84

Post by vasilipupkin » Tue, Jan 05, 2016, 3:48 AM UTC

dools wrote: post #80

vasilipupkin wrote: post #77

Earlier quoted context omitted.

The issue is not static levels of inequality per se. The issue is why inequality should increase. If the 60%th percentile incomes grew 40%, then it is not clear why the bottom 20% percentile income also shouldn't grow 40%. The fact that it didn't is suboptimal and studying this phenomenon makes sense. That doesn't mean that every knee jerk attempt to fix this problem is good. Let me try to explain it like this. It is…

There is an acceptable level of income inequality, the same as there is an acceptable level of inflation. The determination of what that level of income inequality is, is a complex social analysis task. It's somewhat arbitrary (for example we currently view 3% as an acceptable level of inflation, but that could well be 10% if we wanted it to and we could still make society work). There isn't a single level of income…

right. But we are observing both large differences in income growth for bottom brackets vs middle and top brackets AND slow growth in bottom income. And there are economic models that show that these two phenomena are not independent. So, this is something that deserves to be researched, not dismissed and has very little to do with startups, unlike what PG is talking about

Re: Economic Inequality: The Simplified Version

#85

Post by ilostmykeys » Tue, Jan 05, 2016, 3:49 AM UTC

In its effort to empower the individual, capitalism has failed to scale. It's not a good design. If it was it would scale to empower most of the 7 billion inhabitants of this planet. What it has managed to do is empower a tiny fraction of the population at the expense of the rest of humanity. Those whom it empowered are neither the most intelligent nor the most helpful. They're just skilled opportunists; our genetic inheritance from our reptilian cousins. (Please no jokes about PG being a retile)

Re: Economic Inequality: The Simplified Version

#86

Post by geofft » Tue, Jan 05, 2016, 3:51 AM UTC

the_cat_kittles wrote: post #56

geofft wrote: post #25

Why do startups necessarily increase economic inequality? I agree that they do now, but is it impossible to have the good of startups without also increasing economic inequality? Out of the usual reasons people encourage you to either found or work for a startup, "get rich" is not the primary motivator, and "get richer than other people" certainly isn't. (To claim that "get rich" implies "get richer than other people…

"Out of the usual reasons people encourage you to either found or work for a startup, "get rich" is not the primary motivator" in my experience with startups and founders, that is the absolute central motivator, to the point that it is utterly laughable to deny it.

Well, sure. But there's a couple of levels of "get rich": "make enough money to be self-sufficient," "get so much money that you have not yet envisioned what you might do with it," "get into a minority of rich people."

The first one seems like an extremely common motivator, yes. The second one sometimes; the third one unlikely. But the first one does not require economic inequality; the second one might, and only the third one does.

This is what I find puzzling about pg's claim to be in the business of creating economic inequality. Sure, he's in a business that happens to have that effect now, but that hardly seems like a core requirement of the business.

(And this doesn't even address the fact that "startups do X" is sort of circular. Could non-startups, e.g. small businesses that stay small, do X just as well? Or better, because they don't have the failure rate of startups? If we are no longer able to have them run by people motivated by getting rich, is the good done by startups less likely to happen?)

Re: Economic Inequality: The Simplified Version

#87

Post by viraptor » Tue, Jan 05, 2016, 3:51 AM UTC

mdcox wrote: post #61

chongli wrote: post #29

Earlier quoted context omitted.

This comment doesn't make any sense without defining "extreme" vs "normal" income equality. The argument is over economic inequality which I believe most take to mean wealth inequality, not income inequality. Do you think that technology alone can't produce extreme income inequality? Why? Of course not. You need people using the technology as well. Extreme inequality results from the simple fact (as exhaustively supp…

For any other casual viewers unfamiliar with but interested in economics, the 'r' refers to return on capital and 'g' refers to the growth rate of the economy. This section of the wikipedia article on his book seems to give a quick and decent high level overview that puts this (and a few other comments) into perspective: https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...

The whole book is great. It may be ~700 pages, but it's more of a story than a heavy economy book. If anyone is interested enough to comment on this issue, this book is definitely something you'd be interested to read.

Re: Economic Inequality: The Simplified Version

#88

Post by dools » Tue, Jan 05, 2016, 3:54 AM UTC

HSO wrote: post #82

dools wrote: post #67

Earlier quoted context omitted.

Nobody serious said inequality was bad or good Lots of very serious people say that inequality is bad: http://digitalcommons.bard.edu/hm_archive/333/ https://www.youtube.com/watch?v=cZ7LzE3u7Bw&mid=5328 http://www.economonitor.com/lrwray/2013/07/09/how-big-is-big... http://bilbo.economicoutlook.net/blog/?p=11245 http://moslereconomics.com/2009/09/30/inequality-nothing-to-...

From skimming the links provided, my impression is that these authors or texts address increases in inequality or the importance of the middle class (which presumes inequality). Can you show more directly where someone is arguing for/against inequality per se (as opposed to an argument about the proper degree of inequality)?

There is a proper degree of inequality -- too much central planning or regulation to produce complete equality stifles innovation and leads to all sorts of problems. Too much inequality and deregulation leads to instability.

When people talk about income inequality being bad, they're talking about bad income inequality, not acceptable income inequality.

So things that increase income inequality in such a way that it is unchecked or unregulated are bad, and income inequality needs to be controlled directly through regulation and taxation, and directly through increased government spending and full employment.

When PG says "income inequality isn't bad per se" I take it to mean that he sees the current level of income inequality, for example, in the US, as not bad, which is incorrect. The levels of income inequality in the US are causing problems with stability in the economy. He also doesn't see a problem with increasing the current levels of inequality in income in the US.

If he means that some level of inequality of income is acceptable then he's not being very clear about it.

Just as some level of inflation is acceptable, some level of lead and arsenic in drinking water, and some level of sugar consumption is acceptable, so too is some level of income inequality acceptable.

EDIT: changed "inequality" to "equality" in first line ...

Re: Economic Inequality: The Simplified Version

#89

Post by Mikeb85 » Tue, Jan 05, 2016, 3:54 AM UTC

s_tec wrote: post #60

Mikeb85 wrote: post #46

The reason that economic inequality has become such a talking point is that economic inequality has far reaching ramifications for our society. Many see a return to higher levels of inequality as a reason for slower growth and social problems. The reason why inequality is the problem and not simply poverty is because when the 'target' is poverty, all we do is basically put a band-aid on the problem. We look at the po…

It seems like you are actually agreeing with Paul Graham. You see the concentration of political power and the resulting erosion of the middle class, and you want to fix them. Great! Those are the kind of "bad" sources of inequality the original article is talking about. Paul doesn't want to ignore these problems, he just wants to call them what they are. The only problem I see is that we don't have a good term to co…

I agree with some of what he says. His second (? the one before this) post was pretty decent.

I disagree with what he thinks are the causes of both poverty and extreme wealth. An apt proverb is that the plural of "anecdote" is not "data".

Generally speaking, people do not 'become rich' through entrepreneurship, nor do they 'become poor' because they were incarcerated. We can see through actual data, that being poor makes one more likely to commit crimes, and being rich (or at least in the top whatever % of the population) makes one more likely to become an entrepreneur.

PG's goal is desirable, but that doesn't make his analysis any more correct.

Re: Economic Inequality: The Simplified Version

#90

Post by gwright » Tue, Jan 05, 2016, 3:55 AM UTC

sethbannon wrote: post #72

Imagine a factory that's dumping large amounts of arsenic into the public drinking water supply -- a factory that can't operate without doing so. Imagine also that studies show small amounts of arsenic are safe, but large amounts in drinking water can cause serious negative health effects. Seeing these studies, someone comes along and proposes a regulation that limits the amount of arsenic this factory is allowed to…

This analogy doesn't work for me. You are equating different amounts of wealth (generally considered a good thing at any level) with different amounts of poison.

You also repeat a concern made by many critics of Graham's essay, the connection between wealth and the ability to influence public policy, access to politicians and so on. Positing that the wealth is the source of the problem and suggesting the limiting the wealth would limit the influence also doesn't hold together for me.

I'll repeat I comment I made a few weeks ago:

> There is another way to look at this problem though by asking why there is so much money being directed towards elections and politicians? One cause is the increased size and scope of government. When the role of government expands into more aspects of our lives via various taxes, regulations, subsidies, penalties, and so on it creates an incentive to influence the creation of those taxes, regulations, subsidies, and penalties.

> A smaller role for government, in particular a reduction in policies that try to pick winners and losers explicitly (e.g. taxes or fees that favor particular companies or industries), could reduce the incentive to influence the creation of "targeted" legislation.