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To me, income inequality means: The rich get richer, the poor get poorer. But that is not the situation. In reality, the situation is: A rising tide raises all

To me, income inequality means: The rich get richer, the poor get poorer. But that is not the situation. In reality, the situation is: A rising tide raises all boats. The global pie is getting bigger because GDP is growing faster than the population: - GDP Growth since 1999 ~2.5% annually [0] - Population growth since 1999 ~1.3% annually [1] - % of world population living in extreme poverty has more than halved since 1999, 29% to 10%. [2] Meanwhile, the wealth of the top 10 wealthiest in the world has grown at a rate of ~4.5% since 2000 (not adjusted for inflation) [3] So perhaps a more accurate depiction would be: A rising tide raises all boats. But it raises some faster than others. [0] http://www.indexmundi.com/g/g.aspx?c=xx&v=66 http://www.indexmundi.com/g/g.aspx?c=xx&v=66 [1] https://upload.wikimedia.org/wikipedia/commons/1/13/World_population_growth_rates_1800-2005.png https://upload.wikimedia.org/wikipedia/commons/1/13/World_po... [2] http://ourworldindata.org/data/growth-and-distribution-of-prosperity/world-poverty/ http://ourworldindata.org/data/growth-and-distribution-of-pr... [3] https://en.wikipedia.org/wiki/The_World%27s_Billionaires#2000 https://en.wikipedia.org/wiki/The_World%27s_Billionaires#200...

foldr 11y ago
The problem with this line of argument is that relative poverty is a problem as well as absolute poverty. To pick the most obvious example, huge inequalities in wealth inevitably give rise to huge inequalities in power and influence, which can subvert democratic government. Also, what rising tide? In the US at least, real incomes are stagnating or falling for most people.
- enraged_camel 11y ago
  Yep, exactly. Wealthy people rarely keep to themselves. They usually try to shape the world around them, and in our society the best way to do that is to influence politicians to pass policies that they agree with and are favorable to them. And these policies come almost always at the expense of the have-nots.
  - 11thEarlOfMar 11y ago
    > They usually try to shape the world around them Least of which are: Bill Gates: http://www.gatesfoundation.org/ http://www.gatesfoundation.org/ Warren Buffet: https://nonprofitquarterly.org/2013/07/09/buffett-makes-his-biggest-ever-contribution-to-gates-foundation/ https://nonprofitquarterly.org/2013/07/09/buffett-makes-his-... Mark Zuckerberg: https://www.facebook.com/chanzuckerberginitiative/ https://www.facebook.com/chanzuckerberginitiative/
    - enraged_camel 11y ago
      Counter-point: wealthy bankers and hedge fund managers caused the 2009 financial collapse and none of them went to jail because it's not feasible for politicians to go after their campaign contributors.
      - ebfe 11y ago
        Which banker should have gone to jail, and for breaking what law?
- cbetz 11y ago
  Thank You. Paul Graham says: 'Louis Brandeis said "We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." That sounds plausible. But if I have to choose between ignoring him and ignoring a polynomial curve that has been operating for thousands of years, I'll bet on the curve.' You mention a very important argument which Mr. Graham seems to have missed, or simply written off: Democracy can be destroyed by wealth inequalities which then create power inequalities. At this point the "polynomial curve" which was made possible by democracy begins to turn down or flatten as we return to corruption, graft, and cronyism. In other words: We have to baby-sit the growth of this enormously beneficial polynomial curve, for if it gets out of control it will destroy itself (by destroying democracy).
  - ghufran_syed 11y ago
    "Democracy can be destroyed by wealth inequalities which then create power inequalities" : citation?
    - foldr 11y ago
      I'd not have thought that this would be a controversial statement given the current nature of US politics. Both parties are highly dependent on enormously wealthy donors. It's hard to believe that these people are getting nothing in return for their money. Graham's surprisingly naive about this. He simply says "The great concentrations of wealth I see around me in Silicon Valley don't seem to be destroying democracy." I couldn't quite believe he said this after we've seen the complicity of Facebook, Google etc. in the surveillance state.
      - ghufran_syed 11y ago
        It should be easy to provide a citation then, I presume? saying "it's obvious" doesn't actually count as evidence
        foldr 11y ago
        It's a bit like asking for a citation showing that Barack Obama is currently the president. It would be hard to know where to start. Someone already mentioned the Koch brothers, and the recent news is not difficult to Google.
mtgx 11y ago
> To me, income inequality means: The rich get richer, the poor get poorer. But that is not the situation. In reality, the situation is: A rising tide raises all boats. If that was the case, then most people's incomes (adjusted for inflation) would be higher than they were 40 years ago. But that's not true. However, it can be argued that low-income people can now buy "stuff" cheaper than they ever could. Whether that positely counter-balances the fact that real incomes have been dropping for decades for most people, it remains to be discovered, but with rents and homes being pretty expensive and with college tuition putting many people into a lifetime of debt, I'd say we're in the negative there, as there's not much left from one's salary at the end of the month to buy all of that "cheaper stuff" (mainly electronics and food somewhat).
- jack9 11y ago
  > If that was the case, then most people's incomes (adjusted for inflation) would be higher than they were 40 years ago. But that's not true. It is true, just not in the USA and other select nations.
- Frondo 11y ago
  Yeah, poor people can buy tv sets and cell phones now. Those things are definitely cheaper than they used to be. You know what's not cheaper than it used to be? The big ones: housing, health care, education. That's the problem. People look at how almost everyone has a refrigerator, and a ton of poor people have tv sets, and think "they're not hard off at all!!!1! rising tides!! boates!!!" while ignoring how rents are skyrocketing and it took a major law to make health care even nominally affordable again.
  - 11thEarlOfMar 11y ago
    Haha, nominally affordable. Thanks to Obamacare, my health care premium went up 30% and everyone in my family had to change primary care doctors, including my kids, who'd been seeing the same pediatrician for 16 and 18 years.
AndrewDucker 11y ago
Look at the quintiles in the second graph here, which adjusts for inflation: http://www.advisorperspectives.com/dshort/updates/Household-Income-Distribution.php http://www.advisorperspectives.com/dshort/updates/Household-... It's very clear that the bottom 60% of the USA hasn't risen even slightly in the last 50 years. And the 20% above that has only risen slightly. While the top 20% has approximately doubled. (I suspect that if you broke it down further the rises would mostly acccumulate to the top few percent)
- civilian 11y ago
  Who gives a shit about the bottom 60% of the USA? They have their cars, refrigerators, cell phones, television and football teams. If we're going to be truly global citizens, we should place much more importance of the global reduction of poverty, which has been going great! Poor Americans live in the best country in the world--- a country that any enterprising poor foreigner would love to immigrate to--- and they squander that opportunity.
- MrBuddyCasino 11y ago
  So, the rich are getting richer, but the poor are at least not getting poorer? While not ideal, it doesn't sound so bad to me, or am I missing something?

foldr 11y ago

The problem with this line of argument is that relative poverty is a problem as well as absolute poverty. To pick the most obvious example, huge inequalities in wealth inevitably give rise to huge inequalities in power and influence, which can subvert democratic government. Also, what rising tide? In the US at least, real incomes are stagnating or falling for most people.

enraged_camel 11y ago
Yep, exactly. Wealthy people rarely keep to themselves. They usually try to shape the world around them, and in our society the best way to do that is to influence politicians to pass policies that they agree with and are favorable to them. And these policies come almost always at the expense of the have-nots.
- 11thEarlOfMar 11y ago
  > They usually try to shape the world around them Least of which are: Bill Gates: http://www.gatesfoundation.org/ http://www.gatesfoundation.org/ Warren Buffet: https://nonprofitquarterly.org/2013/07/09/buffett-makes-his-biggest-ever-contribution-to-gates-foundation/ https://nonprofitquarterly.org/2013/07/09/buffett-makes-his-... Mark Zuckerberg: https://www.facebook.com/chanzuckerberginitiative/ https://www.facebook.com/chanzuckerberginitiative/
  - enraged_camel 11y ago
    Counter-point: wealthy bankers and hedge fund managers caused the 2009 financial collapse and none of them went to jail because it's not feasible for politicians to go after their campaign contributors.
    - ebfe 11y ago
      Which banker should have gone to jail, and for breaking what law?
cbetz 11y ago
Thank You. Paul Graham says: 'Louis Brandeis said "We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." That sounds plausible. But if I have to choose between ignoring him and ignoring a polynomial curve that has been operating for thousands of years, I'll bet on the curve.' You mention a very important argument which Mr. Graham seems to have missed, or simply written off: Democracy can be destroyed by wealth inequalities which then create power inequalities. At this point the "polynomial curve" which was made possible by democracy begins to turn down or flatten as we return to corruption, graft, and cronyism. In other words: We have to baby-sit the growth of this enormously beneficial polynomial curve, for if it gets out of control it will destroy itself (by destroying democracy).
- ghufran_syed 11y ago
  "Democracy can be destroyed by wealth inequalities which then create power inequalities" : citation?
  - foldr 11y ago
    I'd not have thought that this would be a controversial statement given the current nature of US politics. Both parties are highly dependent on enormously wealthy donors. It's hard to believe that these people are getting nothing in return for their money. Graham's surprisingly naive about this. He simply says "The great concentrations of wealth I see around me in Silicon Valley don't seem to be destroying democracy." I couldn't quite believe he said this after we've seen the complicity of Facebook, Google etc. in the surveillance state.
    - ghufran_syed 11y ago
      It should be easy to provide a citation then, I presume? saying "it's obvious" doesn't actually count as evidence
      - foldr 11y ago
        It's a bit like asking for a citation showing that Barack Obama is currently the president. It would be hard to know where to start. Someone already mentioned the Koch brothers, and the recent news is not difficult to Google.

mtgx 11y ago

> To me, income inequality means: The rich get richer, the poor get poorer. But that is not the situation. In reality, the situation is: A rising tide raises all boats. If that was the case, then most people's incomes (adjusted for inflation) would be higher than they were 40 years ago. But that's not true. However, it can be argued that low-income people can now buy "stuff" cheaper than they ever could. Whether that positely counter-balances the fact that real incomes have been dropping for decades for most people, it remains to be discovered, but with rents and homes being pretty expensive and with college tuition putting many people into a lifetime of debt, I'd say we're in the negative there, as there's not much left from one's salary at the end of the month to buy all of that "cheaper stuff" (mainly electronics and food somewhat).

jack9 11y ago
> If that was the case, then most people's incomes (adjusted for inflation) would be higher than they were 40 years ago. But that's not true. It is true, just not in the USA and other select nations.
Frondo 11y ago
Yeah, poor people can buy tv sets and cell phones now. Those things are definitely cheaper than they used to be. You know what's not cheaper than it used to be? The big ones: housing, health care, education. That's the problem. People look at how almost everyone has a refrigerator, and a ton of poor people have tv sets, and think "they're not hard off at all!!!1! rising tides!! boates!!!" while ignoring how rents are skyrocketing and it took a major law to make health care even nominally affordable again.
- 11thEarlOfMar 11y ago
  Haha, nominally affordable. Thanks to Obamacare, my health care premium went up 30% and everyone in my family had to change primary care doctors, including my kids, who'd been seeing the same pediatrician for 16 and 18 years.

AndrewDucker 11y ago

Look at the quintiles in the second graph here, which adjusts for inflation: http://www.advisorperspectives.com/dshort/updates/Household-Income-Distribution.php http://www.advisorperspectives.com/dshort/updates/Household-... It's very clear that the bottom 60% of the USA hasn't risen even slightly in the last 50 years. And the 20% above that has only risen slightly. While the top 20% has approximately doubled. (I suspect that if you broke it down further the rises would mostly acccumulate to the top few percent)

civilian 11y ago
Who gives a shit about the bottom 60% of the USA? They have their cars, refrigerators, cell phones, television and football teams. If we're going to be truly global citizens, we should place much more importance of the global reduction of poverty, which has been going great! Poor Americans live in the best country in the world--- a country that any enterprising poor foreigner would love to immigrate to--- and they squander that opportunity.
MrBuddyCasino 11y ago
So, the rich are getting richer, but the poor are at least not getting poorer? While not ideal, it doesn't sound so bad to me, or am I missing something?