How Paul Graham Gets It Wrong in “Economic Inequality” • Hacker News Board

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

#91

Post by adamlett » Sun, Jan 03, 2016, 10:38 PM UTC

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…

When you say the government "squanders" money on projects like the F-35, it sounds like you think that the money spent just disappears and is gone, and all we're left with are some fighter jets of questionable value. But the money that the government spends goes back into the pockets of private citizens. Who then spend the money again, and spread it around. Silicon Valley, the symbol of entrepreneurship and self-made billionaires, owes it existence in part to huge, government sponsored, military and aerospace programs, ultimately funded by tax payers. A lot of private companies got very rich on the back of that. And now it's somehow unreasonable that the government wants to take some of that wealth and distribute it somewhere else?

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

#92

Post by vasilipupkin » Sun, Jan 03, 2016, 10:39 PM UTC

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…

The focus on raising taxes is misguided in the following way: we should first figure out which policies are good how much they would cost and then find the cheapest way to raise the money with the least number of distortions and disincentives - not start by raising taxes by arbitrary amounts

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

#93

Post by ZenoArrow » Sun, Jan 03, 2016, 10:39 PM UTC

OmarIsmail wrote: post #45

It is insane (and also very educational) that so many people are completely missing pg's point - author of this response included. I blame pg a little for using the phrase "income inequality" at all since it seems to be a trigger for many people and shuts down their critical reading and reasoning abilities. Let me try to phrase it in a clearer way. If you focus on reducing "income inequality" then you will reduce inc…

The problems of economic inequality do not just boil down to lack of opportunities for the poor, it also encompasses disproportionate levels of power for the rich.

Improving opportunities for the poor is important, but so is providing a fairer playing field in both the economy and politics.

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

#94

Post by vixen99 » Sun, Jan 03, 2016, 10:45 PM UTC

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…

No, what politicians do is to build up debts (easy - it's other people's money) that no business would or could ever countenance. Thus you have a State with a $20 trillion debt and rising. One day it won't rise any more and the suffering will be immense.

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

#95

Post by vasilipupkin » Sun, Jan 03, 2016, 10:48 PM UTC

adamlett wrote: post #91

Pyxl101 wrote: post #58

Earlier quoted context omitted.

> 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…

When you say the government "squanders" money on projects like the F-35, it sounds like you think that the money spent just disappears and is gone, and all we're left with are some fighter jets of questionable value. But the money that the government spends goes back into the pockets of private citizens. Who then spend the money again, and spread it around. Silicon Valley, the symbol of entrepreneurship and self-made…

The issue is not the desire to redistribute per se. The point is it matters what you actually do with the money. Some uses are productive and some are wasteful. Soviet Union was born out of the desire to redistribute - and failed. So this discussion can not be had in the abstract

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

#96

Post by danhak » Sun, Jan 03, 2016, 10:49 PM UTC

thanatropism wrote: post #89

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…

> 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 their talents? But this has nothing to do with inequality. It has to do with "too many people below economic level X". If this seems related to inequality it's because you've already bought into the pie fallacy.

No, it has nothing to do with the pie fallacy. Yes, even the poorest in America lead better lives in absolute terms than most people have throughout history. But regardless of the absolute "economic level x" of the poorest, the wealthiest among us will enjoy disproportionate access to the latest technology, education, healthcare, influence etc.

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

#97

Post by bobby_9x » Sun, Jan 03, 2016, 10:54 PM UTC

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…

The state is neither corrupt nor incompetant? Really?? If this is the case, why so much interest in black lives matter??

There seems to be this spread of misinformation (especially on HN) that evil business owners aren't paying their "fair share" when in reality, they pay the majority of taxes in the US.

High taxes and regulations will only make it harder for the non-rich to accumiliate wealth and the zuckerbergs of the world will just move to another country.

Do you like only having the choice of either working for a big corporation or the government? I sure don't.

nordic countries are a good example of what not to do, because this is exactly what has happened there.

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

#98

Post by zappo2938 » Sun, Jan 03, 2016, 10:58 PM UTC

jrochkind1 wrote: post #65

zappo2938 wrote: post #25

Earlier quoted context omitted.

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…

It seems ridiculously simple to me. Let's define wealth equality as 100 people all with 100,000 dollars a piece. Rather than having a small group of people either in a board room on the top floor of 85 Broad St. or a small group of communists allocate resources, let everybody use their money as a vote to decide how to allocate resources. People need to eat so some money will be spent on food. Most people will need transportation so money will spent on cars and trucks. In order to prevent running out of money people will invest some of it. Several people will purchase farm equipment and start growing food, individual small businesses. Others will create an organization and pool their money together to build a factory to make cars because without cooperation none have enough to cover the startup cost. People are rather stupid so there will be losers and some are smart so there will be winners when it comes to return on investment. There needs to be inequality, it's natural. Nobody needs to starve but people who are better at deciding how to allocate resources should be given more even if they decide to invest in a bigger house and a boat. This works until that small group of people in the board room at the top of the building at 85 Broad St. decide to allocate all the resources to build more houses than everybody else needs and bigger houses than they have resources to maintain. They are able to do that because they consolidated all the voting power of money into their control once a threshold is passed.

Keep the inequality. Some people will make better decisions and then others. The people who make better decisions for example investing the money into research should be rewarded with money and the ability to decide how to best further allocate it including buying a bigger house for themselves or hire a house cleaner because they are busy innovating. There are no problems with that. The problem happens when they become too powerful. The way to prevent that is a progressive tax. In this case, make it very hard but not impossible to get above controlling 1,000,000. No one person and no small group of people are better at making decisions than a large group of people. That is what I mean by wealth equality is democratic. Perhaps, it is better to say there needs to be a wealth equilibrium rather than wealth equality.

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

#99

Post by douche » Sun, Jan 03, 2016, 11:01 PM UTC

danhak wrote: post #96

thanatropism wrote: post #89

Earlier quoted context omitted.

> 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 their talents? But this has nothing to do with inequality. It has to do with "too many people below economic level X". If this seems related to inequality it's because you've already bought into the pie fallacy.

No, it has nothing to do with the pie fallacy. Yes, even the poorest in America lead better lives in absolute terms than most people have throughout history. But regardless of the absolute "economic level x" of the poorest, the wealthiest among us will enjoy disproportionate access to the latest technology, education, healthcare, influence etc.

> the wealthiest among us will enjoy disproportionate access to the latest technology, education, healthcare, influence etc

What exactly do you intend to do to change that? If you start everyone at a baseline level, some of them are going to be smarter, stronger, savvier or whatever, and will be more successful, and thus wealthier, and thus have greater access to whatever benefits that wealth can buy. Even if you zero everyone out each generation, genes matter.

Unless you are artificially suppressing people from rising above mediocrity, you will have some that do better than others.

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

#100

Post by krisdol » Sun, Jan 03, 2016, 11:06 PM UTC

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 also come from a previously communist country and I disagree. The world isn't so black and white. Progressive taxation is not equivalent to a centrally planned economic system. I've had state owned utilities and privately owned utilities, and I absolutely prefer the one that is subsidized by taxes and answers to voters. There's a huge difference between that and having state-chosen academia in Moscow decide how much electricity our city requires. Taxes on wealth and propert subsidize that.

I don't care how much money someone makes off a search engine company, but taxation should incentivize affordable housing and discourage the creation of wealthier landlords. Rent is not valuable entrepreneurship. Controlling the township's electric or water company is not valuable entrepreneurship. At least the state answers to the citizens it services, and has less of an incentive to be driven by profit. Let's have higher taxes in order to create a social safety net and pool of opportunity for the rest of the people.