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A Response to Paul Graham’s Article on Income Inequality
- PaulHoule 11y agoAn HFT isn't entirely useless. You might want to sell 66 shares of Apple stock and somebody else wants to buy 145 and for you both to get a timely fill, there has to be some kind of middleman. If you think HFTs are bad, just take a look at floor traders -- the kind of people who will front run you if they see you coming and they know what you want, or will take a bathroom break if they don't want to trade with you. Reg NMS, which set the stage for HFT passed because of a scandal involving the members of the New York Stock Exchange which is as good of a group of rent seekers as you'll find anywhere. Plenty of hanky-panky goes on with HFT, but it is a less corrupt system than what it replaces.
- hkmurakami 11y agoA great read on the subject by Matt Levine: "high frequency trading may be too efficient" http://www.bloombergview.com/articles/2014-04-02/high-frequency-trading-may-be-too-efficient http://www.bloombergview.com/articles/2014-04-02/high-freque...
- catwell 11y agoThis. For more details, read "Flash Boys: Not So Fast" by Peter Kovac (http://www.amazon.fr/Flash-Boys-Insiders-Perspective-High-Frequency-ebook/dp/B00P0QI2M2 http://www.amazon.fr/Flash-Boys-Insiders-Perspective-High-Fr...). Alternatively, Chris Stucchio's blog posts (starting with https://www.chrisstucchio.com/blog/2012/hft_apology.html https://www.chrisstucchio.com/blog/2012/hft_apology.html and https://www.chrisstucchio.com/blog/2012/hft_apology2.html https://www.chrisstucchio.com/blog/2012/hft_apology2.html) work. We have been told so much that HFT were the bad guys by the media that we ended up believing it, but it is more of a scapegoat for the rest of the financial world.
- PaulHoule 11y agoThe people I know who really hate HFT are hedgies because they'd like to make big trades for free.
- deleted 11y ago[deleted]
- dang 11y agoThis article was flagged by users, presumably because it is a dupe of the discussion at https://news.ycombinator.com/item?id=10826838 https://news.ycombinator.com/item?id=10826838.
- cryoshon 11y agoThere's a lot of overlap, but my full article is actually the response as intended, and that comment is a condensed and incomplete summary due to character limit.
- sandstrom 11y agoGetting burned at the stake for heresy? :) I thought it was an interesting read (though I don't agree with all, only some) and would be a good complement to PG's article.
- enraged_camel 11y agoWith all due respect, content like this is better served in an article format, rather than a comment to an existing (and already very crowded) discussion. We have had many submissions in the past that were responses to another submission. In my opinion, this submission was wrongfully flagged, and should be unflagged so that it can go back to the top where it belongs.
- dang 11y agoThe limited space of the front page is the defining constraint of HN. We often treat follow-up articles as duplicates for that reason, so the flags are acting in a moderation capacity here. Some users would like to see two heated discussions about income inequality on the front page, but I can assure you that many others would not.
- davesque 11y agoThat's great. But those of us who don't agree feel as though our opinions are being squelched by those who are in control of the system (ironic, no?). Consider that before you enforce your policies and potentially alienate a large part of your community.
- temp 11y agoThis sure is getting flagged a lot.
- cryoshon 11y agoI noticed this too. There's some weird behavior going on with the algo, I think... it keeps popping on and off of the front page.
- dang 11y agoThat's the standard effect of flags.
- wh-uws 11y agoMy guess is that is people's way of expressing disapproval without a downvote for threads. While I disagree with the author's points I think they are topical given pg's essays.
- cryoshon 11y agoI hope I didn't go too overboard by dissecting PG's essay like this, but I felt it was necessary to correct many of the items that I read. It may seem spurious now, but economic inequality is relevant for the tech industry, too. The massively increased productivity that information technology provides is very infrequently distributed proportionally to the people who actually forged it-- exactly the same condition as most workers in the US, currently. The principal difference in terms of economics is that the absolute wages of software engineers are currently higher than the median wages, meaning that they don't feel the pressure of not having quite enough-- given enough time, this will change unless we make a decision to alter our course. The accumulation of economic gains from massively increased productivity will trend toward stagnation at the uppermost levels-- the founders and owners. Our society is currently engineered for this to be the case, and we have much work to do if we want a more equitable society. If we accept economic inequality, we accept that we are not citizens but instead are largely debt-laden effortful passengers in a world owned by our betters.
- sandstrom 11y agoI thought it was a good article (I agree with some of it, but not everything). It would have been helpful if the many quotes were visually distinct, it would make for an easier read. I also think both you and PG aren't in as much disagreement as your response indicates. My interpretation of PG's article was that he primarily wanted to highlight the wealth-creation aspect, and contrast it to rent-seeking. I think you'd both agree on many concrete fixes (reduce rent-seeking in the financial system, a political system mainly driven by money, health-system reform, etc). Though this is my guess obviously.
- deleted 11y ago[deleted]
- joshAg 11y agoI don't think you went overboard. Thanks for writing and posting this link.
- heretoo 11y agoI enjoyed it, though I haven't read PG's essay yet.
- jgord 11y agoPGs articles aren't wrong - but they are second order, when we need a first order response to a current evil [ before it leads to bloody revolution ] If you look at income distribution its a hockey stick - you really have to slap yourself on the face and realise there is no middle class - what you thought of as professional-middle-class-contributor is actually college-debt-burdened-lower-class - no matter how many years they work they will never pay off their debt, let alone own their own home. People aren't asking for "income equality" they are asking for some level of humanity and democracy to be restored to our version of Capitalism, to strengthen that capitalism. So, just as "All Lives Matter" is not a good response to the "Black Lives Matter" movement, its not useful to discuss "income inequality is not intrinsically a bad thing" when we are in a time when the lower class are basically slaves and the middle class has been in steady decline - your _only_ chance to have security is to win a lottery [ the Startup or the PowerBall variety ] So, what needs to be talked about is rather : how to take money out of politics, how to get poor people out of the ghetto, how to stop young black people from being shot by police on a weekly basis, how to bring back a reasonable level of tax on the super wealthy, and how to stop large companies from getting subsidies to pollute our environment. A small amount of Socialism is needed urgently to bring Capitalism back into a survivable form - if not, I really think we are headed for bloody revolution, because most of the populace are angry, and its a rational anger because their survival needs are barely being met, in many cases.
- paulddraper 11y ago"lower class are basically slaves" You're going to compare working graveyards at 7-Eleven to slavery? You should read a little bit about slavery and human trafficking. https://en.wikipedia.org/wiki/Slavery https://en.wikipedia.org/wiki/Slavery I suspect most slaves would not agree with you.
- jgord 11y agoyes - in order to say something that is true, I need to say something that is false. You'd be right to call me on it, and I'd have it no other way.
- enraged_camel 11y agoThis is spot on. I think it is important to evaluate PG's essay within context. He, like most people in Silicon Valley, is stuck in a bubble and views the rest of the world through a very distorted lens. That's where much of his rhetoric about wealth creation comes from: he's surrounded by people (founders) who create value in the form of software. When a portion of those founders become rich, he looks at himself as a promoter of inequality. What he doesn't realize is that the vast majority of wealthy people did not become wealthy by creating value, but by playing zero-sum games -- and then by influencing politicians and bending the system to their will so as to guarantee that they will hold on to as much of that wealth as possible. I think the question PG needs to address is this: what is the justification for non-founder executives getting paid tens of millions of dollars at the expense of other employees? What is the justification for those top-level salaries to exist even when the company is doing badly and regular employees don't see a dime in raises or bonuses that year? Bottom line is that the type of wealth PG enables founders to create, and the subsequent inequality, is not the type society has a problem with. Sure, some people may balk at the idea of an instant-messaging app being valued in the billions, but those controversies tend to be completely detached from the inequality debate. Now, if PG ever starts preaching that founder CEOs should pay themselves millions of dollars while keeping salaries as low as possible... that would be a different story. As things stand though, I don't think he's part of the problem and measures to address inequality won't really affect him and his crew.
- phaus 11y ago>I think the question PG needs to address is this: what is the justification for non-founder executives getting paid tens of millions of dollars at the expense of other employees? What is the justification for those top-level salaries to exist even when the company is doing badly and regular employees don't see a dime in raises or bonuses that year? I definitely agree that its a shitty situation. However, as far as I understand it the justification is that executive salaries are public which led to a salary arms-race where companies are forced to throw more and more ridiculous sums of money at executives.
- CPLX 11y ago
- ryandamm 11y agoI think it's useful to draw a bright line around the 'value creation' that PG is referring to, also. It's not just creating chairs, it's aggregating great wealth by 'disrupting' traditional industries. Those traditional industries have workers and shareholders who lose out. What makes successful startups so profitable is they displace a large and less-efficient system with a small, efficient one. Efficient in terms of human capital, oftentimes: look how few people AirBNB employs directly, yet have a market cap larger than Marriott. The returns on capital its investors have seen is a result of the substitution of capital for labor (in part). Of course, to the extent that the creation of a marketplace unlocks value, it can create value de novo, rather than shifting wealth from one sector/company to another. But with 'smart' startup founders seeking monopoly rents (cf. Peter Thiel, writing/speaking virtually anywhere), those returns are also concentrated, and will not trickle down to the larger population. Furthermore, the wealth inequality cryoshon is writing about is not driven by startups, it's driven by a general breakdown in the implicit social contract between capital and labor. As OP notes, Piketty goes into great detail about the historical causes and likely effects, but the tl;dr (and his book is _very_ tl) break down to: when returns on capital are higher than overall economic growth, wealth will tend to aggregate. As fans of numbers and algorithms, I hope HN readers can appreciate the simple beauty of that formulation. Piketty's suggested policy response is simple: high taxes on aggregated wealth. Which, after reading (~80%, honestly) of his book, I have to agree with.
- cryoshon 11y ago>Furthermore, the wealth inequality cryoshon is writing about is not driven by startups, it's driven by a general breakdown in the implicit social contract between capital and labor. As OP notes, Piketty goes into great detail about the historical causes and likely effects, but the tl;dr (and his book is _very_ tl) break down to: when returns on capital are higher than overall economic growth, wealth will tend to aggregate. Yes, this is exactly it. I also agree re: Piketty being quite verbose... many of the same old points rehashed again and again.
- gaius 11y agoDisruption is merely skirting the law and pocketing what you would have spent on compliance as profit. AirBnB cleverly disguises its actual employees - the people cleaning its hotel rooms - as independent contractors. They are employees in every sense apart from having rights. And the genius of it is, they do it to themselves! This is not "creating value", it is destroying it.
- deleted 11y ago[deleted]
- thenerdfiles 11y ago"I am a manufacturer of income inequality." Bullshit.
- thenerdfiles 11y agoNarcissistic pricks. Not only do you have to be saving the world, but as it turns out, you have to be causing all of the problems as well. You Silicon Valley cunts have managed to begin asphyxiating yourselves from shoving your heads up your own assholes too far. Go read Thomas Sowell[0], and stop wasting everybody's time with your self-righteous publicized ego deaths. — [0]: http://www.worldmag.com/2014/12/thomas_sowell_on_the_root_causes_of_income_inequality/ http://www.worldmag.com/2014/12/thomas_sowell_on_the_root_ca...
- dang 11y agoWe've banned this account for breaking the HN guidelines. If you would prefer it not to be banned, you're welcome to email hn@ycombinator.com. We're happy to unban accounts if there is reason to believe they will follow the site rules in the future.
- guscost 11y agoAs a fan of Thomas Sowell, it is unfortunate to have to say "whoa, this person is not with me" in polite company. If this person is reading, please cut it out. Swearing and insulting people won't lead to anything good.
- thenerdfiles 11y ago"Every great movement must experience three stages: ridicule, discussion, adoption."
- ddingus 11y agoThanks for this informative and welcoming bit. A ban is often tough to get past. Leaving them an out is good form. Just expressing a little appreciation.
- datashovel 11y agoI get the feeling the air is quite thin up in the ivory tower PG must be living in these days :)
- Apocryphon 11y agoAny hacker working in San Francisco can take a look outside and see the rampant inequality our industry is surrounded by.
- puredemo 11y agoIt turns out people aren't all equally talented or employable. Shocking, huh?
- sangnoir 11y agoThere are people out there working harder than you, but are stuck in poverty. They were born at the wrong time, or in the wrong family, or didn't go to the right schools. You ought to be self-aware enough to know that blind luck plays a huge part in your employability.
- puredemo 11y agoI don't agree with that framing. I don't just work hard, I work smart, and I come from generations who did the same. Capability is substantially more genetic than environmental anyway, equivocating and hand-waving everything away as "just luck" is extremely facile. Some people are oozing with talent and potential, most people are not, that's the reality -- it's science and breeding, not luck.
- rileymat2 11y ago"Capability is substantially more genetic than environmental anyway" I am confused how the Chinese can have such a surging middle class if it is genetic. Certainly they have not changed their genetics too much in the last 50 years.
- puredemo 11y agoThey have a high average IQ with a low standard deviation.. http://lagriffedulion.f2s.com/sftfi1%7Bimage3%7D.gif http://lagriffedulion.f2s.com/sftfi1%7Bimage3%7D.gif A large middle class is pretty much exactly what you'd expect based on the testing. Why would anything need to have changed in the last 50 years?
- natural219 11y agoI'll give a short explanation as to why I flagged this: This piece irrationally pisses me off, for purely petty social dynamics reasons. 1) There's a first-mover advantage to thinkpiece responses. Everyone obviously is going to read the first response, many people are probably writing responses of their own. This seems like a quick way to jump into a discussion and say "hey, look at me!" You better have something useful to say. 2) It's just a really poorly thought out response. It rehashes basically the same points everybody knows, adding zero new information or insight, without responding to the meat of what Paul's saying. 3) There was a time when I sincerely believed Hacker News was the one place to go to escape from petty thinkpiece nonsense. It continues to sadden me to see this community in decline. PG should start another website.
- gph 11y agoI'll give a short explanation as to why I downvoted this: This is about as obnoxious of a comment that could ever exist.
- cryoshon 11y agoI'll admit that I read PG's piece coincidentally when it was just posted and formed my article shortly after, but I'd have been writing something else ("thinkpiece") around that period of time anyway if I hadn't come across it. I've wanted to start writing about economic inequality for quite some time, and this was a convenient stepping off point. I take issue with #2, though: if everyone knows those points, why did PG fail to address them adequately in his original piece? The data supporting my perspective are quite compelling and not yet disproven. I'll agree my piece isn't insightful: I considered it a diligence to reply point by point (by the book, perhaps) specifically because influential people cannot go unchallenged when they make faulty arguments.
- dnautics 11y agoAs a response to PG's article, I posted this: >PG is wrong that he is a creator of economic inequality. Technology development usually brings prices down. This is deflationary; the 'big picture' way that deflation happens: that prices are discovered more efficiently, or resources are used more efficiently, or that idle labor capacity is recruited to fulfill a want or need that was not known before (esp: think uber/lyft). >Deflationary processes are inherently anti-inequality. Think of it this way. If we never changed the minimum wage, then people's incomes, especially at the bottom segment of society would make their net economic potential greater over time. >It is not the investment in technology that makes "tech drive inequality". It is the political structure around it. We have a structure where monetary policy shoves free or cheap money into the faces of banks and the investment classes in efforts to 'stimulate' the economy, where the secular (over decades, not over years) inflation drives low- and middle- class citizens into risky investment activity just to be able to sustain themselves in their later years (effectively a subsidy for the rich). "families often consist of two breadwinners (& no children) with a hearty amount of debt, nothing owned, and few savings. The family unit itself may even be weaker because of less shared ownership. Wages haven’t tracked productivity for decades, so wages haven’t risen since the previous story was normal." Is this because of rapacious capitalists taking wages? The nominal wage has increased since the early 70s, but the purchasing power of that nominal wage has gone down faster than the increase. This is policy, not capitalism. http://www.nytimes.com/2012/04/06/opinion/krugman-not-enough-inflation.html http://www.nytimes.com/2012/04/06/opinion/krugman-not-enough... Policy wonks like to argue that the fed should "pay more attention to employment". The irony is that if you think that people are consigned to being wage slaves, a national policy of total employment is keeping people there. There is a cost to getting people employed, and that is that those who are employed are going to be paid less, and the way you trick people into that is by making what people earn be less, even for the same or greater nominal amount ("sticky wages argument"). What happened in the early 70s? Prior to the nixon shock we had wage increases leading inflation and a trending toward decreasing of the wage gap that had momentum enough to continue till about the 2000s (if you think about it that momentum makes sense because entrants into the workforce in the 70s started retiring in the 200s) - during the bush/obama era we see income inequality turning the corner. While we are certainly trending towards getting worse things actually are not that bad: http://im.ft-static.com/content/images/d823a614-9e82-11e5-b45d-4812f209f861.img http://im.ft-static.com/content/images/d823a614-9e82-11e5-b4... Everyone is worried about the far right side of the graph (which is partially a histogram artifact) but look at the left hand side of the graph and see how the lowest income fraction of society is far less populated than 40 years ago. (yes, between 2008 and 2015 it is getting worse, which is cause to worry)
- Mz 11y agoGot this far and stopped reading: To quote Graham, mafioso of the startup incubators: I have lots of valid reasons to be really grumpy about lots of things. I am also not a fan per se of PG. But any supposed debate that starts by basically smearing the character of the person you are debating is unlikely to be based on sound, objective reasoning. This piece is almost certainly not motivated by a desire to correct any logic missteps in pg's writing. It is most likely a thinly veiled excuse for trying to trash the man personally.
- cryoshon 11y agoAh, I was being lighthearted with that word choice, and I don't have any axe to grind with PG personally. An alternative which captures the same sentiment without any negative connotations would be "maestro" "majordomo" "magnate" or even "de Medici".
- Mz 11y ago"Founder" or "investor" are equally accurate as to who and what PG happens to be. If you are writing for the HN audience, you can assume that the vast majority of your readers are well aware who is and how much power he exercises. To me, your "clarification" smacks of "Power corrupts and absolute power corrupts absolutely and (in my opinion) pg simply has a too distasteful amount of power to be assumed to be a decent human being."
- dibujante 11y agooh my god he is being tongue in cheek seriously
- gist 11y agoMaybe it's actually better that OP did that as in "you've been warned" as to some bias. I didn't see it as a smear and by the way Ron Conway has been referred to as "the godfather" by the mainstream press and bloggers (at least as I recall).
- 11y ago
- bad_user 11y agoThis article is being buried, dropping from second place to tenth in an instant. Interestingly it's being surpassed by articles that are both older and with less points.
- dang 11y agoThe thread is clearly a duplicate of https://news.ycombinator.com/item?id=10826838 https://news.ycombinator.com/item?id=10826838. Normally we bury duplicates outright. We're actually holding off doing that here, because some people seem to feel strongly about it.
- ddingus 11y agoI have read both, and there is value added here, despite it having a large overlap with the earlier discussion.
- deleted 11y ago[deleted]
- amelius 11y agoRelated: https://www.youtube.com/watch?v=v8Lb8ZgQP74 https://www.youtube.com/watch?v=v8Lb8ZgQP74
- clarkmoody 11y ago> Now: none of the above, and families often consist of two breadwinners (& no children) with a hearty amount of debt, nothing owned, and few savings. All of this is by choice on the part of the families. People choose to seek employment. People choose to go into debt. People choose to spend rather than save. > The family unit itself may even be weaker because of less shared ownership. "The death of the family is the life of the state."[1] When the welfare state grows larger, the family itself becomes less important. If you want to restore the family to its former place, then you must reduce the welfare state. > Wages haven’t tracked productivity for decades, so wages haven’t risen since the previous story was normal. How about total benefits, including those mandated by the State? Your wages haven't increased but your employer is spending more than ever on your benefits. > We’ve lost all of that ground: not just some of it, all of it, and more. We’re back to the 1920s– wage slaves with few rights and no political ability to change things. We've lost a lot of ground in the quest for liberty, that's for sure. But each June, the Supreme Court creates more "rights" out of thin air. What about those? We have more "rights" than ever, when you look at the burgeoning list of goodies the government doles out. Income inequality is the result of a free society. Imagine perfectly egalitarian society, in terms of wealth. One day, a musical artist gives a concert, and people voluntarily choose to pay money to see it. Now you have inequality, and it was all voluntary. Should the State jump in and steal the excess capital from the artist and give it back to the patrons to restore equality? [1] https://mises.org/library/welfare-states-attack-family https://mises.org/library/welfare-states-attack-family
- djur 11y agoWhich "State" are you referring to? I'm not aware of an organization by that name. > Imagine perfectly egalitarian society, in terms of wealth. The "perfect egalitarianism" strawman is, at this point, barely recognizable as either man or straw for all the beatings it's suffered. It is as useless a hypothetical in discussing the appropriate distribution of resources as would be "imagine the entire universe was owned by a single person". The vast majority of people support the use of some degree of compulsion to obtain a more stable or fair distribution of resources than would be obtained in a state of nature. "Stable" tends to be the goal of the right, while "fair" tends to be the goal of the left. From there, everything is a subject of debate -- how much intervention is too much? what is the preferred distribution? can we reach the preferred distribution with a permissible level of intervention?
- cxromos 11y agothis feels like populism. pg's articles are well thought and argumented. i actually learned a lot from them. it does not matter do i agree with everything there or not though i mostly do. if someone can write that good from a different aspect or point of view so that i can learn more on his/hers views that would be great.
- mcguire 11y agoPerhaps I've been sensitized by recent reading[1], but I don't think this response addresses the real problems with PG's article. The problem with inequality is not necessarily the inequality itself. The poor in America are significantly better off than the wealthy were not very long ago, in most material senses, as has been repeatedly pointed out. So what if they don't get as good health care or education or whatever as some of their neighbors; it's still better than they would have had. The problem is that relative wealth, inequality, is power. It always has been, and it always will be.[2] (Admittedly, in other societies, wealth isn't the only power. But with the decline of the church and the significant lack of both feudal aristocracy and totalitarian[3] governments, wealth is really the only power left.) So, here's a question: is it proper for a vanishingly small segment of society to be able to establish and maintain power over the vast majority? Me, I've got no idea. Don't really care, either. Because a better question is: is it a good idea? And I think the verdict of history there is a pretty solid Nope. Are you unhappy with the Koch brothers' political views? That's another stupid question; their specific desires are pretty much irrelevant. Much more important is how you feel about how they go about expressing and supporting their views. When reading PG's or this article, remember that Charles' and David's father was very much a start-up entrepreneur. Their grandfather was a Dutch immigrant and printer and Fred was exactly the kind of person PG is talking about in his essay. Now, you can can go on about "limiting corruption in politics", but keep in mind that the Koch brothers are apparently planning on putting something like a trillion dollars into the 2016 election; it's hard to perceive anything but that their views will always matter more than yours. Inequality in wealth and power is not even a new thing in this country; I'm given to understand that the state now is at or approaching levels from the gilded age, but not exceeding them. What is new, is that for a time in this country we didn't have wild inequality. Here's what Paul has to say about that: "I think rising economic inequality is the inevitable fate of countries that don't choose something worse. We had a 40 year stretch in the middle of the 20th century that convinced some people otherwise. But as I explained in The Refragmentation, that was an anomaly—a unique combination of circumstances that compressed American society not just economically but culturally too." (Personally, I think that the cultural compression that Paul fears so much is somewhat overblown. But then, I grew up in the '70s in Amarillo, TX (not far from the Koch's Quanah, weirdly) and rather fortunately had the library at WTSU about 45 minutes south in Canyon.) The thing that bothers me most: All of those fancy technologies that PG emphasizes, those that some commentors here are happy to trade 45 years of real wage growth for, had their direct roots in that brief period of weird equality. What happens next? What happens after AirBnB puts all the hotels out of business and we're all staying in each other's spare bedrooms on trips? What happens after Uber has killed off all the taxi companies in the world and replaced them with spare-time drivers? Do things still keep getting better and better? Sure, my nifty new Galaxy Note is better than my old land-line, but exactly how much better is an iPhone6 compared to a 5? Or, ultimately, do Larry Ellison's sons, Charles and David, decide they don't want to deal with all of this bullshit and start throwing their weight around Silicon Valley? And when they do, what are you going to do about it? [1] The Story of Philosophy, by Will Durant, if you're interested. In fact, I'm in the middle of the chapter on Nietzsche; one of the best comments in this very well-written and quite good book is a footnote following a quote from Nietzsche regarding how excesses in the behavior of the übermensch will be restrained by morality: something to the effect of "How did that get back in here?" In any case, PG's comments like, "Most people who get rich tend to be fairly driven. Whatever their other flaws, laziness is usually not one of them" (Laziness isn't one of the flaws of that single mother working three jobs, either.) or "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" strike me with a certain sense of deja vu. [2] In anything remotely resembling a foreseeable human society. [3] "Totalitarianism is best understood as any system of political ideas that is both thoroughly dictatorial and utopian." (http://www.iep.utm.edu/totalita/ http://www.iep.utm.edu/totalita/)
- guscost 11y agoOK, there are a lot of claims here but the one I'm interested in is the idea that productivity has increased while wages have stagnated. I'll have to read more about which of those are adjusted for inflation and how all that measurement actually works, but for now I'd like to make a few points that might be relevant: - There's not much consideration why productivity has increased. If I had to guess a significant part is because executives hired analysts and planners to increase productivity, not just because better technology had that side effect. The incentive to do this is presumably that more productivity means better margins for the company. I can understand the argument that the workers deserve a bigger share of the rewards than they have gotten, but there is also a share deserved by the executives and analysts who were involved. And legally you can't really say that anyone is entitled to a share, which I guess means that in our society the balance comes down to ethics and morals. - I think this point is made elsewhere, but there are a lot of things you can do with a "middle-class" income these days that were simply not possible when the wage stagnation started. Could it be the case that even if wage numbers don't track productivity, there is some balancing elsewhere that means actual quality of life does increase with productivity? I'd like to hear peoples' thoughts, if these ideas are not full of trivial fallacies (which may very well be the case as I am not very knowledgeable about economic stuff).
- deleted 11y ago[deleted]
- HiLo 11y agoI like how he tries to quote a "Nobel prize winning economist" as an appeal to authority, but then (without naming him) insults Picketty's work, which will probably win a Nobel. PG is a smart guy but he really should stick to his areas of expertise, him and Marc Andreessen both frequently make basic finance and econ theory mistakes. PG's claim that he is in a position to speak with authority on inequality is like an electrician claiming he is in a position to speak with as much authority as the architect concerning the overall progress of the building.
- tie_ 11y agoI disagree with most of the post, but here is one point that I'm particularly at odds with: > We have no obligation to stop someone from “becoming rich”– but we have a strong obligation to stop someone from becoming poor. I don't see a way to stop people from becoming poor. The most common way of becoming poor is not to produce wealth. How could we fulfill our "strong obligation" and force people to produce wealth?
- sangnoir 11y ago> The most common way of becoming poor is not to produce wealth. How could we fulfill our "strong obligation" and force people to produce wealt There is a break in your logic: your conclusion would only make sense if not producing wealth is the only way of becoming poor, which is not the case (think bankrupting medical bills that can make you poor even as you 'produce wealth'). To answer your question directly: you can fulfill the strong obligation to stop people becoming poor by having a strong social security net, and possibly a guaranteed minimum income.
- tie_ 11y ago> There is a break in your logic: your conclusion would only make sense if not producing wealth is the only way of becoming poor. I read the strong obligation of stopping people becoming poor as stopping any people from becoming poor, rather than stopping some people from becoming poor. If there is a single feasible way to become poor, then some people would go that way, and we have failed that obligation. The flaw is not in my logic. Even with strong social security net, you cannot stop people from being poor. The strong social security net would represent the lowest level of income. At the lowest level of income in a society, you're poor, as everyone else is making more than you do. If someone was working and making less than what the social security provides, then they can just stop working and be better off at the security net level. No matter how strong the social security net, the people resting on it will always be the poorest in the society. Speaking from experience (grown up in a communist country, living in Western Europe atm), even the strongest form of state-forced salaries/job availability did not prevent people from becoming poor. Unsurprisingly, the current Western European societies are not preventing this either.
- gremlinsinc 11y agoTHANKYOU for this, Paul Graham is a genius in many things, but you really hit the nail on the head with this article. -- AS a self-trained developer trying to get my first job and never earning over 40k (yet) between myself AND my wife's income -- it's hard to move up, when you feel so much pressure to stay where you are if not move down. I learned coding to start my own startup, it's the only way I'd ever be able to afford a prototype.. But I think Bernie said it best: "NOBODY working 40 hours per week should be living in poverty" -- there is no reason for this, in fact it makes that person a slave to whoever is paying them sub-par wages, they have to work whether they want to or not, it's not a choice, it's enslavement, they stop and they lose their apartment, and food. If the lowest 40 hour/weekers earned enough to put money away, and not worry about living paycheck to paycheck, then it wouldn't be such a problem. Also the fact is -- the poor spend the most money per dollar - meaning the more money the have to spend, the more money goes directly back into the local economies. This along with increased tech advances that wipe away the need for some employees and 40% of the workforce(estimated) by 2040, a guaranteed basic income isn't just a good idea - it is crucial to our economy, and if it doesn't happen there WILL come a day when American's demand it, and pick up a gun to fight for it, I'm not sure when or what the tipping point will be, but it's coming someday.
- jbhatab 11y agoI agree with a lot of what you are saying, but you haven't made over 40k between both you and your wifes income? That seems extremely unlikely with any coding skills. I don't know any juniors that are making less than 50k from php to javascript.
- boona 11y agoLet's be clear that Thomas Piketty's book has been thoroughly refuted, not in some minor way, but Thomas claimed that all he did was objectively looked at the data, and that the conclusion simply showed itself. Unfortunately he cherry picked data, and fabricated bits of history to make it fit his claim. The following paper does a great job of completely dismantling it. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012 Not to mention that most people haven't even read past the first few pages of the book, and yet they quote it. http://www.telegraph.co.uk/finance/economics/10951407/Has-anyone-finished-Thomas-Pikettys-Capital-in-the-21st-Century.html http://www.telegraph.co.uk/finance/economics/10951407/Has-an...
- eli_gottlieb 11y agoSo, just to be clear here, the refutation to Piketty was published in the Journal of Private Enterprise by a policy professor from George Mason University and another author from the Institute for Energy Research? Or in other words, it was published in the Libertarian Journal of Libertarianism by a libertarian academic and a libertarian think-tanker at a libertarian think-tank, funded by the Koch Brothers[1]? This really doesn't pass the smell test. [1] -- http://www.sourcewatch.org/index.php/Institute_for_Energy_Research http://www.sourcewatch.org/index.php/Institute_for_Energy_Re...
- boona 11y agoInstead of smelling it, it may make more sense to actually read the arguments. ;)
- Umn44 11y ago"I find it astonishing that people compare modern-day income equality and the position of the poor in our time, in the Western world, to that of historical slavery" I'm sorry to tell you but you're a moron if you believe there isn't mass suffering when you are poor and low status. The amount of psychological abuse you take and feelings of self worth and being treated as subhuman by society and the business community at large, you are just wrong on so many levels. You depression and mental illness are induced by capitalist society because your status is directly related to cultural expectations about your ability to live up to the ideology of the culture you exist in, if you don't live up to it you will be ruthlessly not associated with. It effects your love life/dating life, etc... as in you won't have much of one because nobody wants to date/marry a poor person. If you don't think that just as painful as slavery you're a grade A idiot.
- efaref 11y agoOne of the common ways to get out of poverty in the past was indentured servitude. People would voluntarily sell themselves into slavery because it was preferable to their current "free" position. You can't eat freedom.
- ptaipale 11y agoYes, although indentured servants were not quite the same as slaves (again, there was of course variance depending on time and place). For instance, did the fugitive slave acts of colonial America cover white fugitive indentured servants? I'd presume no, although some other laws existed to cover them (I'm by no means an expert but some reading makes me think this.) Racism must have been a significant factor in making the difference of slavery and servitude in the American colonies: actual slaves were of African descent, while indentured servants were European, and apprenticeship contracts covered young American-born people. When we talk about slavery in Europe today, in realistic terms it is actually more resembling the indentured servitude contracts of America (debt bondage and enforced servitude) but illegal (if authorities find out, they work actively to confiscate any proceeds of such contracts from those who benefit). E.g. sex workers who are deceived to take some form of a debt bondage. Where I see the word "slavery" used is however often about situations where employment officials assign some training or intern arrangements for people to get job-seekers allowance. It's hyperbolical, even if there might be something wrong with these arrangements.
- meagain20000 11y agoMeh. Your feelings are hurt boohoo. If you are poor and low status why don't you do something about it instead of whining about it and saying how we are all hurting your feelings. Sure, there are cases where you need outside help to get out of your current situation. Yes people should help if they can. But if I provide you help and you waste it like it is tipically the case than it is on you. It is not my responsibility to make you not poor if you do not take advantage of opportunities when they are given to you. Many people cause their children to be poor by simply not giving a fuck. By spending all their money on vices and not taking care of themselves or family. Or by simply wasting their youths doing basically nothing productive even when given the opportunity. So you will not make me feel bad with your sob story when a lot of the fault is on poor people themselves, with lots of exceptions of course. Go and cry me a river.
- paulddraper 11y agoGeez, this isn't Reddit.
- eropple 11y ago> If you are poor and low status why don't you do something about it Because the deck is so fundamentally and incontrovertibly stacked against them that they can't? I'd say that this would be obvious except that that itself would be too obvious given your posting history here; I've seen a lot of shitty posts around here, but yours is in the top five of most overtly antisocial and unempathic, ever, full stop.
- meagain20000 11y agoI stand by everything I said. You should really read my comment again and you will notice that I mention that there are situations where you should provide help. There are people that really do need help And it should be provided. Being poor myself as a you a young kid, parents that only had elementary education and working their asses off in minimum wage I didn't actually consider myself incapable of doing what I wanted. Like going to college and obtaining a carrer. So I did. Coming from a poor background has given me the insight that that many people in the USA chose a poor lifestile. They may this choice when they were young, in their teens. They wanted to hang out instead of studying. I stiil see it today. Lots of kids in NYC that rather spend all their times with their friends rather than hitting the books are destined for minimum age. And it is not necessarily the parents fault in many cases. I've seen parents yelling at their kids for not taking school seriously so many do care. Unfortunately, my life experience has made me cynical and so I come out like an asshole for being frank. I will not spend anytime worrying about people that will not help themselves. Please note that I'm referring about the USA. I cannot speak for other countries but it is probably the same in some cases.
- ricksplat 11y agoI've seen Paul Graham make a few shocking remarks about wealth distribution claiming for instance there'd be no Sergey and Larry (i.e. Google) if they thought some of their wealth was given to the poor. I doubt Sergey and Larry would have been one bit perturbed if they thought they would have amassed 80% of or even less. In their wildest dreams they could probably not have even imagined amassing 20% of that. But I don't want to get bogged down talking about their outlying data point - though Mr Graham chose to present it as exemplar. My main objection to Mr Graham (apart from his general "let them eat LISP" tone) is that his point is moot in the larger context. Yes it is true that the technology sectors have been phenomenally successful in the last few years but they are such a tiny amount of the actual working economy. They only stand out because they are still in growth while the vast bulk of the economy is not. Mr Graham quite grandiosely describes himself as a "creator of inequality" as though he is somehow on a par with these captains of industry, the 1% or economic elite as we variously describe them but he is not. He's just another cog in the system - a well remunerated cog certainly but a cog nonetheless. As a programmer myself I enjoy an elevated income and standard of living. Having worked in a few startups I have rubbed shoulder regularly with a few millionaires (self-made and otherwise) and by and large I would describe these guys as often friendly, often generous, and always fiendishly clever and hard working. I've never envied them their gains and I've never wanted for more - I'm doing a job I love and I have enough money to live in comfort and can buy most things I need without having to struggle. But we are in a different world my millionaire friends and I. In the various other walks of life I encounter I see people working harder than me, more qualified than I, and enjoying far less job security than me, and all simply because they work in "low growth" sectors of the economy. Sectors that are nonetheless necessary, such as health, with skills that are nonetheless indispensable (nurses, firemen) yet woefully under resourced. All because they aren't growth industries - which can basically be reinterpreted as "there isn't a quick buck to be made". On the flip side to that Mr Graham talks about how the successful businesses are those that have increased productivity by harnessing technology to increase efficiency and productivity but if that is the general trend, that the economy is nurturing more efficient use of resources then why isn't the cost of living going down? The truth of it is that Mr Graham and I are enjoying relatively sweet times because we are the darlings of capital. We give better returns on investment than other sectors of the economy. We find new ways to do things so that the cost of running businesses is decreased whilst still charging the same price for the services to the consumer. We shouldn't be so quick to set ourselves at odds with the egalitarian movement. Certainly I wouldn't rush to pay more tax or earn a lesser wage - but at the same time it does hurt me to see the numbers of homeless increasing, my friends and family struggling, and the quality of medical care in decline. I'd have to weigh these factors up before taking flight with my valuable skillset. But what I do wonder about, is about these shadowy figures in the background that always seem to be taking a cut. I mean the actors and organisations that fund and manipulate all of this - that nurture "high growth" systems and starve the "low growth" ones - whether it's on purpose, or just an emergent pattern - and what are we going to do about it? I believe in Capitalism, and I accept that inequality is a natural factor of society. But that shouldn't preclude me from saying that we need more socialism in our society - that doesn't mean I want a centrally planned communist state like the USSR, it just means that I want our valuations to be more nuanced than just "return on investment". Somebody somewhere else on here wrote that if you increased taxes on the wealthy it would only amount to a few thousand dollars extra per person. Well I can only say that is a lot of money to somebody that doesn't have a thousand dollars and collectively it is a lot of money for an institution such as a hospital. I believe the phrase these days is that you should "check your privilege".
- lhh 11y ago"..the standard of living for the rich has risen and the standard of living for everyone else has dropped" Really, standard of living has dropped? Just to pick one counter-example, something like 500 million iphones have been sold in the past 10 years, and over 1 billion android devices were sold last year. Compared to 10 years ago, we've given half of the planet 24/7 access to the sum of human knowledge. Seems like a pretty good step up to me. I think what you mean is wages have fallen, but standard of living has risen dramatically and only shows signs of accelerating.