81–90 of 106 posts
Any investor can make 4-6% annual gains in the stock market year over year. I don't think that says much about inequality as a whole.
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But the economy is not zero sum, like that bag. If I have a process that increases the total number of skittles in the bag, is it still unfair for me to take more skittles from it?
Depends on your view point. You could argue that the process was never really "yours" in the first place. Society, our laws, our armies and natural resources, our roads, bridges, power lines, telecoms structure, are 99% of that process and you added 1%. You simply took advantage of a lot of luck, a little bit of hard work and probably a bunch of your parents' money to end up owning it. Maybe you should get a chunk of…
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Personally, I think it is blatantly unfair. It's like if we had a big bad of skittles and every time I took 1 skittle, you took 10 skittles.
More like, if we had a big patch of strawberries and every day I picked 100 and you picked 1000, why should I get to take yours?
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Why are the Mexicans picking them for me, not for you or for themselves? Assuming I didn't enslave them, I must be offering them something that makes it worth their while. Maybe I spent some time building better tools for berry picking, so using those tools they can take home more berries overall than they could without my help even if they're giving some to me. Maybe I saved some berries, traded them for supplies wi…
Maybe.. I can completely change a reasonable answer to any moral problem just by adding another maybe. But it doesn't really matter. The analogy is flawed, that's the point, because it's not how it works in the real world. In the real world, people are not getting 1000000x higher income just because they do 1000000x more of the same work. The main problem is in how we value things that are collectively produced (via…
You could argue that they get 1000x (1000000x is disingenuous; 1000000x the minimum wage is around $15,000,000,000 per year, practically nobody makes that) higher income because they do something that people value 1000x more. If we assume people pay others for doing this they value, if a developer can't find somebody who values what they provide enough to pay them more than $80,000, while a fund manager can find someone to pay them $80,000,000, some people must value what the fund manager is doing a lot more or else they wouldn't pay him/her.
>One is the neoclassical solution, which is to deny that we cooperate.
How does it deny we cooperate? I have an apple and I want an orange, you have an orange and you want an apple, we exchange those things, how is that not cooperation?
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But the economy is not zero sum, like that bag. If I have a process that increases the total number of skittles in the bag, is it still unfair for me to take more skittles from it?
So, you're right - the economy is not zero sum, but the resources are. The economy is about moving them here or there. It depends on where you got those skittles? If you are increasing the skittle count by just taking from other peoples' bags of skittles then you're literally the mortgage/banking industry and there are probably lots of empty skittle bags out there propping up our never-ending-skittle-bag.
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Economists don't generally buy the buy idea that you can make some people better off without making others worse off. In short, if all the gains happen for one group, even if the other group isn't directly losing money, their purchasing power will be eroded by the rich. And I'll add that this sort of thing keeps stacking up, because as the rich continue to be able to buy up things like land at a higher rate than the…
>Economists don't generally buy the buy idea that you can make some people better off without making others worse off. Which economists? Economists generally support freer trade, more open borders and the like because they see trade as fundamentally not a zero sum game: if two parties are willing to make an exchange, it must be because the exchange somehow makes them better off than they would be without it. All of d…
"This long-run increase in income inequality not only raises social and political concerns, but also economic ones. It tends to drag down GDP growth, due to the rising distance of the lower 40% from the rest of society. Lower income people have been prevented from realising their human capital potential, which is bad for the economy as a whole."
" Causes and Consequences of Income Inequality: A Global Perspective", from the IMF.
"First, we show why policymakers need to focus on the poor and the middle class. Earlier IMF work has shown that income inequality matters for growth and its sustainability. Our analysis suggests that the income distribution itself matters for growth as well. Specifically, if the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20 percent (the poor) is associated with higher GDP growth. The poor and the middle class matter the most for growth via a number of interrelated economic, social, and political channels."
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Economists don't generally buy the buy idea that you can make some people better off without making others worse off. In short, if all the gains happen for one group, even if the other group isn't directly losing money, their purchasing power will be eroded by the rich. And I'll add that this sort of thing keeps stacking up, because as the rich continue to be able to buy up things like land at a higher rate than the…
>Economists don't generally buy the buy idea that you can make some people better off without making others worse off. Which economists? Economists generally support freer trade, more open borders and the like because they see trade as fundamentally not a zero sum game: if two parties are willing to make an exchange, it must be because the exchange somehow makes them better off than they would be without it. All of d…
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It's literally in the preceding paragraph. Notes about how the proposed healthcare law was essentially a transfer of wealth from the poor to the rich, how the proposed tax cuts mainly benefit the richest Americans, and plans to cut school funding.
"how the proposed tax cuts mainly benefit the richest Americans" Did you gather this view from reading the tax reform? https://assets.donaldjtrump.com/trump-tax-reform.pdf
In 2016, if you were single and made $25,000 your tax was $3290. The standard deduction for singles is $6300. Is there a trick here?
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Sure, but there are downsides to this approach as well. Say someone could have a small business that takes off and retires after a few years with a reasonable retirement fund. This doesn't fit the mold of a hoarding 1%-er. It seems like discouraging this kind of income spike would actually decrease social mobility.
https://www.theatlantic.com/business/archive/2016/07/social-... " “The probability of ending where you start has gone up, and the probability of moving up from where you start has gone down,” Carr said. For instance, the chance that someone starting in the bottom 10 percent would move above the 40th percentile decreased by 16 percent. The chance that someone starting in the middle of the earnings distribution would r…
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Maybe.. I can completely change a reasonable answer to any moral problem just by adding another maybe. But it doesn't really matter. The analogy is flawed, that's the point, because it's not how it works in the real world. In the real world, people are not getting 1000000x higher income just because they do 1000000x more of the same work. The main problem is in how we value things that are collectively produced (via…
>In the real world, people are not getting 1000000x higher income just because they do 1000000x more of the same work. You could argue that they get 1000x (1000000x is disingenuous; 1000000x the minimum wage is around $15,000,000,000 per year, practically nobody makes that) higher income because they do something that people value 1000x more. If we assume people pay others for doing this they value, if a developer ca…
That's a strong assumption and as a matter of fact, they don't. For example, when I go to cinema, I pay to the ticket seller. I don't pay to the people who actually produced the movie. I rely on some (unknown to me) mechanism according to which those people get paid, but I don't pay them.
> How does it deny we cooperate?
So you can see that in the above example. I don't pay individuals for doing things for me that I value. Instead, I pay to some organization which then redistributes the money. Neoclassical solution denies an existence of such organization. (Which is not quite wrong - I have no idea how to define this organization correctly for all edge cases - as I already mentioned, I don't see a solution. But it is also not correct.)
And it gets even worse! Some people cannot be paid for what valuable they are doing for me, because they are already dead. For example, I am not paying to Beethoven. There are even things that produce things of value without any human intervention; who do I pay then?
So yeah, maybe it kinda works for apples and oranges, and picking strawberries, but not in general.