Economic Inequality: The Simplified Version • Hacker News Board

Re: Economic Inequality: The Simplified Version

#91

Post by spikels » Tue, Jan 05, 2016, 3:56 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…

I think he is arguing almost exactly the opposite.

Poverty, poor education, etc are the underlying problem - the arsenic - and income inequality is one of the symptoms - like hair loss from chronic arsenic poisoning. Attacking income inequality directly would be like forcing haircuts on people to make wigs for people with arsenic poisoning. Not only does it not solve the problem - it helps a bit - but it actually harms innocent bystanders.

People like quick, simple solutions. It's a lot easier to raise taxes on billionaires than break the cycle of poverty or fix public schools.

Re: Economic Inequality: The Simplified Version

#92

Post by jondubois » Tue, Jan 05, 2016, 4:01 AM UTC

melted wrote: post #62

jondubois wrote: post #42

Economic inequality is bad because it has a profound negative effect on most people's self-esteem and ability to enjoy life. With high inequality, money becomes more valuable and people start to think of everything in terms of money. Even romantic relationships become money-oriented. It's not uncommon for marriages to break up because of financial reasons. Wealth inequality causes more human suffering than moderate p…

Much of that "people were happy under communism" BS is just that: BS. As anyone past the age of about 30 would tell you, you tend to forget the shitty stuff a lot faster than the good stuff. As a result we often hold these romanticized notions of how things used to be. Yet if you actually go ahead and look at some videos from 20-30 years ago from those parts of the world, you see North Korea. No one seriously wants t…

A lot of what we (the west) believe about communism is shaped by western propaganda (though western propaganda is more about exaggerations and omission of facts than outright lies so you could argue that it's not as bad). If you ask old Russian people who were around at the time, they will often tell you that things were good.

Re: Economic Inequality: The Simplified Version

#93

Post by BenoitEssiambre » Tue, Jan 05, 2016, 4:03 AM UTC

Ok but startups don't get a free pass in this debate.

Startups that capture wealth by creating value that wouldn't exist otherwise are, in my opinion, unquestionably good, even if they increase inequality.

But don't some of them try to capture wealth by striving to get monopolistic positions using network effects, mergers and acquisitions and such? Didn't Peter Thiel even write a book promoting this?

Capturing wealth through a monopoly on things that would otherwise have been created by competitors and that would yield lower margins if it wasn't for the monopolistic features of the specific market, is not that ethically different from theft.

A lot of technologies are a small jump from previous building blocks. Bob Kahn and Tim Berners-Lee are responsible for a huge core part of the innovations Facebook and others rely on but it's Zuckerberg who made all the money because he captured a natural monopoly, not because he created more value than Kahn and Berners-Lee. Twitter is a simplistic and obvious product that someone else would have created a long time ago if it hadn't already existed. If it wasn't for network effects, how do we know there wouldn't be another social network providing 10x the value to its users than the current ones? The monopolistic network effects _prevents_ this kind of innovation through competition.

I'm not saying people shouldn't get a chance to be well compensated for the risk they take and the effort they put but even in startup world, at a certain level of very high inequality, when inequality reducing free market competition forces don't seem to be materializing for long periods of time, suspicions of an unethical and detrimental ecosystem can reasonably be justified.

Re: Economic Inequality: The Simplified Version

#94

Post by HSO » Tue, Jan 05, 2016, 4:05 AM UTC

dools wrote: post #88

HSO wrote: post #82

Earlier quoted context omitted.

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…

> 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,

Well, then you are more generous than I am. To me, it is a classic strawman and leads the whole essay astray. But I see then we do not disagree. I thought you were trying to support the strawman with your links.

Re: Economic Inequality: The Simplified Version

#95

Post by [deleted] » Tue, Jan 05, 2016, 4:05 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…

[deleted]

Re: Economic Inequality: The Simplified Version

#96

Post by chubot » Tue, Jan 05, 2016, 4:09 AM UTC

ThomPete wrote: post #55

chubot wrote: post #13

Earlier quoted context omitted.

This comment doesn't make any sense without defining "extreme" vs "normal" income equality. That is far from obvious. Do you think that technology alone can't produce extreme income inequality? Why?

I cleared up the language, hope it makes it more obvious what I mean.

Um, it doesn't at all? Did you change "income equality" to "economic inquality" ?

What is extreme economic inequality vs normal economic inequality? Honest question -- I literally have no idea.

Re: Economic Inequality: The Simplified Version

#97

Post by ThomPete » Tue, Jan 05, 2016, 4:15 AM UTC

chubot wrote: post #96

ThomPete wrote: post #55

Earlier quoted context omitted.

I cleared up the language, hope it makes it more obvious what I mean.

Um, it doesn't at all? Did you change "income equality" to "economic inquality" ? What is extreme economic inequality vs normal economic inequality? Honest question -- I literally have no idea.

Economic Inequality example. People in Harlem vs. People in Brooklyn.

Extreme Economic inequality example. People working in Walmart for less than a working living v.s. the Walmart family or the Koch family.

Re: Economic Inequality: The Simplified Version

#98

Post by giardini » Tue, Jan 05, 2016, 4:24 AM UTC

>"But economic inequality per se is not bad."

Nope, it's not bad until you need to buy something!

(BTW is this PG post not some strange form of denial?)

PG seems to forget about the infrastructure (bankers, financiers, venture capitalist firms, etc. - the entire financial industry) built around startups, as if the entrepreneur were a Jesus figure responsible for it all and who might somehow be crucified for it all. Psychologists call this a "grandiose delusion". Nonetheless it is glorious hogwash - an entrepreneur w/o the infrastructure is merely yet another nutball to be kicked off the front doorstep of venture capitalists. And as the dotcom boom and bust showed us, no entrepreneur is necessary at all - greed and a placard with a catchy ".com" on a door was often enough to make a fortune!

Good news: PG need not be concerned that he will be run to ground ("hunted", in his terms) before his bankers are; there are far more (and far wealthier) bankers, profiteers, and their employees than successful entrepreneurs, certainly enough to keep the masses busy for a decade should the French Revolution visit Silicon Valley!

>"The great concentrations of wealth I see around me in Silicon Valley don't seem to be destroying democracy."

They are: they work for the NSA, the CIA, the FBI, for hundreds of government agencies, for Google and Facebook. They have blindly destroyed privacy in both in our personal and social behavior. They want more. One need only open one's eyes.

Re: Economic Inequality: The Simplified Version

#99

Post by spikels » Tue, Jan 05, 2016, 4:37 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…

He is not arguing "categorically". You are simply misunderstanding. No strawman. Sorry.

Re: Economic Inequality: The Simplified Version

#100

Post by hackuser » Tue, Jan 05, 2016, 4:43 AM UTC

zachlatta wrote: post #27

hackuser wrote: post #14

> economic inequality per se is not bad. A lot of research shows that high society-wide economic inequality causes many bad effects, economically, politically and socially. I believe that is the basis of many concerns. According to that research, high inequality is per se bad (I don't know enough to define "high", but many others have). > [inequality due to startup founder success is good] Generally I agree, but: 1)…

Isn't he saying that the problem is that economic inequality is seen as the cause, not the effect? I think that's in line with all of the points you brought up.

> Isn't he saying that the problem is that economic inequality is seen as the cause, not the effect? I think that's in line with all of the points you brought up.

The distinction is helpful; thanks. My first point is that it's a cause, according to a lot of research.