8 ms·

Why the focus on inequality as if this is the core problem as against issues relating to the absolute quality of people's lives?

by vixen99 11y ago

ZeroGravitas 11y ago
Well one factor is neatly summarized in this quote, which I found when I googled the phrase "inequality possibility frontiers" found in the first graph: "The frequent claim that inequality promotes accumulation and growth does not get much support from history. On the contrary, great economic inequality has always been correlated with extreme concentration of political power, and that power has always been used to widen the income gaps through rent-seeking and rent-keeping, forces that demonstrably retard economic growth." http://www.economist.com/blogs/freeexchange/2007/12/the_frontiers_of_inequality http://www.economist.com/blogs/freeexchange/2007/12/the_fron...
- ancap 11y ago
  Then, it would seem, the focus should not be on lessening inequality but rather destroying this "extreme political power". Ironically those who beat the drum of inequality most often call upon the use and expansion of those political powers to battle the symptom.
  - tankenmate 11y ago
    The problem with this in countries like the US is that money talks, unlimited contributions to PACs and various ways to mask those contributions means that at the very least election media is largely controlled by money. This obviously tilts political favour to those with money to spend.
    - ZeroGravitas 11y ago
      Yep, it's a chicken and egg thing, small groups with money -> small groups with political power -> small groups with more money -> small groups with more political power -> etc. Though other political factors do have a role to play, a dysfunctional two-party political process where many feel disenfranchised may well be the link that explains the graphs for english speaking nations differing from the European nations for example.
  - amelius 11y ago
    The solution, I think, is to make sure that the political process happens completely transparently and with approval of the people. Properly designed IT systems could thus help solve the problem. See: [1][2] [1] https://en.wikipedia.org/wiki/E-democracy https://en.wikipedia.org/wiki/E-democracy [2] http://liquidfeedback.org/ http://liquidfeedback.org/
  - notahacker 11y ago
    Centralisation and expansion of political power /= concentration of it in the hands of the few. Political power is far less concentrated in a big government elected on a wide franchise which legislates and redistributes in a way not seen as conflicting with the perceived interests of a diverse majority than if wielded through a set of local private or quasi-private enforcement services effectively owned by those with the means to purchase their decisions.
  - asgard1024 11y ago
    Why not, but how? No matter how you want to dance about it, money are strongly related to power. (To most girls this is probably obvious. :-)) It's not just literally true - you can exchange money for raw materials and energy (power), but every time you give money to someone else to do your bidding, you are exercising power over them. The only time this power is not really being exercised (as in "power over other people") is when you're spending for your own pleasure, buying things like a new car or a spa visit. Investing money is almost always exercising power, depending how much and with what intent you will affect future of others. For example, you can buy a newspaper company to make good PR about you. So to be able to "destroy the power", in capitalist society, you would have to very tightly control how people spend money. This is not only fiendishly difficult, but also undesirable from a free market perspective. Reducing inequality is a much simpler way to remove power from too powerful people, because it simply gives more power to other people. And there is in fact not much need to be wealthy in the first place, unless you can have associated power - there is only so much cars one person needs.
    - ancap 11y ago
      > every time you give money to someone else to do your bidding, you are exercising power over them I disagree. As long as you're referring to a non-coerced transaction, each side agrees to the transaction because they receive more benefit from engaging in the transaction then not engaging in it. I don't think you're addressing the point I raised. Allow me to rephrase in case there's some ambiguity. The quote I originally replied to indicated that income inequality was an affect of a high concentration of political power. Assuming it is true that income inequality derives from a high concentration of political power, then using political means to solve income inequality is not only futile but demonstrates either a misunderstanding of the cause of income inequality or a kind of Stockholm syndrome from those who advocate to do so.
      - thegp 11y ago
        Doesn't the qoute state that income inequality is supposed to enact accumulation and growth("give something to aspire to") but instead leads to concentration of political power among the wealthy, who then use that power to further secure their higher income, creating a feedback loop? That directly implies that removing income inequality and adding feedback loops that avoids excessive capital concentration is the way to go. And to your point about non-coerced transactions, where does coercion start? Monopolies? Excessive costs? Does Comcast coerce their customers, if they have only no internet as the alternative? Does uber coerce people with surge pricing? And that pharma guy, raising the price of the drug, did he coerce people ? I would tend to say yes in the case of the Comcast monopoly, no in the other cases. But it's hard to define exactly where coercion starts. A more fundamental examples, from my libertarian socialist perspective: advertising in public view. Is that coercion of a third party(the advertised to?) Microsoft windows/ apple and other walled gardens with no data export, but payed for upgrade path and end of support? And even more fundamentally, sometimes any and all transactions you make can be under duress and make you inherently dependent on the partner: Getting a shitty job that barely feeds you, because your skills are obsolete and your country doesn't provide basic income? Startint that shitty job early, due to not having the same resources, stability and growing opportunities because your father is working a shitty job just to make ends meet?
- yummyfajitas 11y ago
  Of course, when you look at the biggest sources of rent seeking in the US, they are mostly not protecting the interests of the very wealthy. Exclusionary zoning, occupational licensing, overpriced government services, these are probably the biggest (in terms of $) examples of rent seeking in the US. These generally favor some middle class and poor folks at the expense of other middle class and poor folks. If this theory were true, where is the rent seeking?
  - asgard1024 11y ago
    > these are probably the biggest (in terms of $) examples of rent seeking in the US LOL. You forgot big banks and "too big to fail", military-industrial complex and all the wars.. Your examples are peanuts compared to these.
    - yummyfajitas 11y ago
      Um, banks and "too big to fail" cost a few billion dollars a few times a century. The most recent bailout was profitable for the treasury. While I'm not generally a proponent of war or the military, it's hardly clear that these are a large amount of rent seeking compared to the broader economy.
  - xiaoma 11y ago
    How much has Apple paid in taxes as a percentage of revenue (or even profit) over the past 5 years? While the tax system may look progressive at a very superficial level, the richest people or corporations tend not to pay as much in taxes as the middle class does. Even beyond the specifics of the law, the sheer complexity of the law means that only those whose earnings is high enough to justify the cost of a good tax accountant or tax lawyer can get a good rate. Regulatory complexities in general are also a burden on smaller companies and sole proprietors. Ted Turner described his experience building CNN as one where he was climbing a ladder and seeing the rungs he had just climbed knocked away. Outsiders now simply don't have the ability to handle the regulatory costs of creating the next CNN unless they're already extraordinarily wealthy. Finally, our banking system is a model of rent-seeking. There are fees charged for doing just about anything with money (borrowing it, lending it, exchanging it for another currency, etc), many of the fees are invisible and once again they are extremely difficult to avoid. Example: how much of the money from YouTube's acquisition went to the financiers? How much do banks make when a tech company IPOs?
fulafel 11y ago
People's happiness depends more on the relative quality of their lives compared to others, not absolute quality. It's a basic property of humanity.
- danbruc 11y ago
  This doesn't sound true or only insofar that it makes you unhappy if you do a comparable amount of work but don't receive a comparable compensation. So I would say that not receiving your fair share makes you unhappy but not only having less then others.
  - fulafel 11y ago
    People still experience diminished happiness if they feel their relatively low quality of life or social status is because of their perceived own shortcomings. This is often how depressed people feel.
    - SolaceQuantum 11y ago
      Depressed people feel depressed because of a chemical imbalance in the brain, not because of the ready they think. Having a chemical imbalance allows all sorts of thoughts, but they should be considered in context of someone who may already be incapable of feeling happy for other reasons.
      - fulafel 11y ago
        I agree, the reference to depression was just to reference an emotional state that is part of our emotional vocabulary.
- logicchains 11y ago
  >People's happiness depends more on the relative quality of their lives compared to others. It's a basic property of humanity. This used to be called "envy", and seen as a vice to be avoided. Interestingly, the description of it as a "basic property" of humanity is in a way similar to symbolic interpretations of the Christian notion of "original sin" (Christians/theologians please correct me if I'm wrong).
nabla9 11y ago
Inequality seems to reduce long term economic growth. OECD research: http://www.oecd.org/newsroom/inequality-hurts-economic-growth.htm http://www.oecd.org/newsroom/inequality-hurts-economic-growt... IMF discussion note: http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf The Economist article based on IMF paper: http://www.economist.com/news/finance-and-economics/21597931-up-point-redistributing-income-fight-inequality-can-lift-growth-inequality http://www.economist.com/news/finance-and-economics/21597931...
- yummyfajitas 11y ago
  Or is at least correlated. And that correlation is quite brittle - if you do things like split the world into developed and undeveloped, the correlations seem to vanish (suggesting Simpson's paradox). http://www.manhattan-institute.org/pdf/e21_01.pdf http://www.manhattan-institute.org/pdf/e21_01.pdf The stats supporting this are not very solid.
  - fulafel 11y ago
    This is a report from an American conservative think-tank, would be more convincing to see something peer-reviewed on this.
calibraxis 11y ago
Same reason we focus on oligarchs, kings, central parties, capitalists, castes. Because there’s unequal power relations where elites dominate those underneath. Those on the bottom must obey bosses (if they indeed have the privilege of wage slavery), treated as prisoners in school then thrown into prison, homeless, open to abusive predators of all sorts, sex slavery, in fear of drones blowing up your neighbors...
rayiner 11y ago
Because relative inequality is also a core problem. Beyond a certain level, relative inequality might be a bigger problem than absolute inequality. There was an article recently from some conservative think tank about how if countries like Sweden and Germany were U.S. states, they would be among the poorer ones. That's true--per capita PPP income is 75-80% as high in those countries as in the U.S. But I doubt very many Germans or Swedes would rather their country be like, say, Maryland (the richest U.S. state, where wealthy suburbs surround the relative poverty of Baltimore).
pron 11y ago
The absolute quality of people's lives is of great importance (and is tracked in such measures as life expectancy and some global poverty stats), but inequality is a serious problem because of power[1]. Gross inequality of wealth directly leads to gross inequality of power, and that is (axiomatically) assumed to be bad because it means that the outcomes of many people's lives are directed by the few who have power over them. [1]: https://en.wikipedia.org/wiki/Power_(social_and_political) https://en.wikipedia.org/wiki/Power_(social_and_political)

Why the focus on inequality as if this is the core problem as against issues relating to the absolute quality of people's lives?

by vixen99 11y ago

Why the focus on inequality as if this is the core problem as against issues relating to the absolute quality of people's lives?

ZeroGravitas 11y ago

Well one factor is neatly summarized in this quote, which I found when I googled the phrase "inequality possibility frontiers" found in the first graph: "The frequent claim that inequality promotes accumulation and growth does not get much support from history. On the contrary, great economic inequality has always been correlated with extreme concentration of political power, and that power has always been used to widen the income gaps through rent-seeking and rent-keeping, forces that demonstrably retard economic growth." http://www.economist.com/blogs/freeexchange/2007/12/the_frontiers_of_inequality http://www.economist.com/blogs/freeexchange/2007/12/the_fron...

ancap 11y ago
Then, it would seem, the focus should not be on lessening inequality but rather destroying this "extreme political power". Ironically those who beat the drum of inequality most often call upon the use and expansion of those political powers to battle the symptom.
- tankenmate 11y ago
  The problem with this in countries like the US is that money talks, unlimited contributions to PACs and various ways to mask those contributions means that at the very least election media is largely controlled by money. This obviously tilts political favour to those with money to spend.
  - ZeroGravitas 11y ago
    Yep, it's a chicken and egg thing, small groups with money -> small groups with political power -> small groups with more money -> small groups with more political power -> etc. Though other political factors do have a role to play, a dysfunctional two-party political process where many feel disenfranchised may well be the link that explains the graphs for english speaking nations differing from the European nations for example.
- amelius 11y ago
  The solution, I think, is to make sure that the political process happens completely transparently and with approval of the people. Properly designed IT systems could thus help solve the problem. See: [1][2] [1] https://en.wikipedia.org/wiki/E-democracy https://en.wikipedia.org/wiki/E-democracy [2] http://liquidfeedback.org/ http://liquidfeedback.org/
- notahacker 11y ago
  Centralisation and expansion of political power /= concentration of it in the hands of the few. Political power is far less concentrated in a big government elected on a wide franchise which legislates and redistributes in a way not seen as conflicting with the perceived interests of a diverse majority than if wielded through a set of local private or quasi-private enforcement services effectively owned by those with the means to purchase their decisions.
- asgard1024 11y ago
  Why not, but how? No matter how you want to dance about it, money are strongly related to power. (To most girls this is probably obvious. :-)) It's not just literally true - you can exchange money for raw materials and energy (power), but every time you give money to someone else to do your bidding, you are exercising power over them. The only time this power is not really being exercised (as in "power over other people") is when you're spending for your own pleasure, buying things like a new car or a spa visit. Investing money is almost always exercising power, depending how much and with what intent you will affect future of others. For example, you can buy a newspaper company to make good PR about you. So to be able to "destroy the power", in capitalist society, you would have to very tightly control how people spend money. This is not only fiendishly difficult, but also undesirable from a free market perspective. Reducing inequality is a much simpler way to remove power from too powerful people, because it simply gives more power to other people. And there is in fact not much need to be wealthy in the first place, unless you can have associated power - there is only so much cars one person needs.
  - ancap 11y ago
    > every time you give money to someone else to do your bidding, you are exercising power over them I disagree. As long as you're referring to a non-coerced transaction, each side agrees to the transaction because they receive more benefit from engaging in the transaction then not engaging in it. I don't think you're addressing the point I raised. Allow me to rephrase in case there's some ambiguity. The quote I originally replied to indicated that income inequality was an affect of a high concentration of political power. Assuming it is true that income inequality derives from a high concentration of political power, then using political means to solve income inequality is not only futile but demonstrates either a misunderstanding of the cause of income inequality or a kind of Stockholm syndrome from those who advocate to do so.
    - thegp 11y ago
      Doesn't the qoute state that income inequality is supposed to enact accumulation and growth("give something to aspire to") but instead leads to concentration of political power among the wealthy, who then use that power to further secure their higher income, creating a feedback loop? That directly implies that removing income inequality and adding feedback loops that avoids excessive capital concentration is the way to go. And to your point about non-coerced transactions, where does coercion start? Monopolies? Excessive costs? Does Comcast coerce their customers, if they have only no internet as the alternative? Does uber coerce people with surge pricing? And that pharma guy, raising the price of the drug, did he coerce people ? I would tend to say yes in the case of the Comcast monopoly, no in the other cases. But it's hard to define exactly where coercion starts. A more fundamental examples, from my libertarian socialist perspective: advertising in public view. Is that coercion of a third party(the advertised to?) Microsoft windows/ apple and other walled gardens with no data export, but payed for upgrade path and end of support? And even more fundamentally, sometimes any and all transactions you make can be under duress and make you inherently dependent on the partner: Getting a shitty job that barely feeds you, because your skills are obsolete and your country doesn't provide basic income? Startint that shitty job early, due to not having the same resources, stability and growing opportunities because your father is working a shitty job just to make ends meet?
yummyfajitas 11y ago
Of course, when you look at the biggest sources of rent seeking in the US, they are mostly not protecting the interests of the very wealthy. Exclusionary zoning, occupational licensing, overpriced government services, these are probably the biggest (in terms of $) examples of rent seeking in the US. These generally favor some middle class and poor folks at the expense of other middle class and poor folks. If this theory were true, where is the rent seeking?
- asgard1024 11y ago
  > these are probably the biggest (in terms of $) examples of rent seeking in the US LOL. You forgot big banks and "too big to fail", military-industrial complex and all the wars.. Your examples are peanuts compared to these.
  - yummyfajitas 11y ago
    Um, banks and "too big to fail" cost a few billion dollars a few times a century. The most recent bailout was profitable for the treasury. While I'm not generally a proponent of war or the military, it's hardly clear that these are a large amount of rent seeking compared to the broader economy.
- xiaoma 11y ago
  How much has Apple paid in taxes as a percentage of revenue (or even profit) over the past 5 years? While the tax system may look progressive at a very superficial level, the richest people or corporations tend not to pay as much in taxes as the middle class does. Even beyond the specifics of the law, the sheer complexity of the law means that only those whose earnings is high enough to justify the cost of a good tax accountant or tax lawyer can get a good rate. Regulatory complexities in general are also a burden on smaller companies and sole proprietors. Ted Turner described his experience building CNN as one where he was climbing a ladder and seeing the rungs he had just climbed knocked away. Outsiders now simply don't have the ability to handle the regulatory costs of creating the next CNN unless they're already extraordinarily wealthy. Finally, our banking system is a model of rent-seeking. There are fees charged for doing just about anything with money (borrowing it, lending it, exchanging it for another currency, etc), many of the fees are invisible and once again they are extremely difficult to avoid. Example: how much of the money from YouTube's acquisition went to the financiers? How much do banks make when a tech company IPOs?

fulafel 11y ago

People's happiness depends more on the relative quality of their lives compared to others, not absolute quality. It's a basic property of humanity.

danbruc 11y ago
This doesn't sound true or only insofar that it makes you unhappy if you do a comparable amount of work but don't receive a comparable compensation. So I would say that not receiving your fair share makes you unhappy but not only having less then others.
- fulafel 11y ago
  People still experience diminished happiness if they feel their relatively low quality of life or social status is because of their perceived own shortcomings. This is often how depressed people feel.
  - SolaceQuantum 11y ago
    Depressed people feel depressed because of a chemical imbalance in the brain, not because of the ready they think. Having a chemical imbalance allows all sorts of thoughts, but they should be considered in context of someone who may already be incapable of feeling happy for other reasons.
    - fulafel 11y ago
      I agree, the reference to depression was just to reference an emotional state that is part of our emotional vocabulary.
logicchains 11y ago
>People's happiness depends more on the relative quality of their lives compared to others. It's a basic property of humanity. This used to be called "envy", and seen as a vice to be avoided. Interestingly, the description of it as a "basic property" of humanity is in a way similar to symbolic interpretations of the Christian notion of "original sin" (Christians/theologians please correct me if I'm wrong).

nabla9 11y ago

Inequality seems to reduce long term economic growth. OECD research: http://www.oecd.org/newsroom/inequality-hurts-economic-growth.htm http://www.oecd.org/newsroom/inequality-hurts-economic-growt... IMF discussion note: http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf The Economist article based on IMF paper: http://www.economist.com/news/finance-and-economics/21597931-up-point-redistributing-income-fight-inequality-can-lift-growth-inequality http://www.economist.com/news/finance-and-economics/21597931...

yummyfajitas 11y ago
Or is at least correlated. And that correlation is quite brittle - if you do things like split the world into developed and undeveloped, the correlations seem to vanish (suggesting Simpson's paradox). http://www.manhattan-institute.org/pdf/e21_01.pdf http://www.manhattan-institute.org/pdf/e21_01.pdf The stats supporting this are not very solid.
- fulafel 11y ago
  This is a report from an American conservative think-tank, would be more convincing to see something peer-reviewed on this.

calibraxis 11y ago

Same reason we focus on oligarchs, kings, central parties, capitalists, castes. Because there’s unequal power relations where elites dominate those underneath. Those on the bottom must obey bosses (if they indeed have the privilege of wage slavery), treated as prisoners in school then thrown into prison, homeless, open to abusive predators of all sorts, sex slavery, in fear of drones blowing up your neighbors...

rayiner 11y ago

Because relative inequality is also a core problem. Beyond a certain level, relative inequality might be a bigger problem than absolute inequality. There was an article recently from some conservative think tank about how if countries like Sweden and Germany were U.S. states, they would be among the poorer ones. That's true--per capita PPP income is 75-80% as high in those countries as in the U.S. But I doubt very many Germans or Swedes would rather their country be like, say, Maryland (the richest U.S. state, where wealthy suburbs surround the relative poverty of Baltimore).

pron 11y ago

The absolute quality of people's lives is of great importance (and is tracked in such measures as life expectancy and some global poverty stats), but inequality is a serious problem because of power[1]. Gross inequality of wealth directly leads to gross inequality of power, and that is (axiomatically) assumed to be bad because it means that the outcomes of many people's lives are directed by the few who have power over them. [1]: https://en.wikipedia.org/wiki/Power_(social_and_political) https://en.wikipedia.org/wiki/Power_(social_and_political)