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"And as long as it's possible to get rich by creating wealth, the default tendency will be for economic inequality to increase." This seems to be the ontologic

"And as long as it's possible to get rich by creating wealth, the default tendency will be for economic inequality to increase." This seems to be the ontological point of his essay, which reads as a loosey historical narrative manufactured to defend his belief that the fight against "economic inequality" will undermine innovation by disincentivizing the next Zuckerberg. But it misses the underlying point of wealth creation: if more people create more wealth, then naturally, there should be less poverty. Adding value to the world makes the pie bigger. The real issue is distribution. Our current economic model distributes wealth as a factor of capital, which is hoarded at the top and systematically protected. It would be silly to say that the top 1% of the population, which owns more than the rest of the 99% combined, creates more wealth or is more productive than everyone else on the planet. They just have a monopoly on capital.

acqq 11y ago
Exactly, no matter how much some people try to mystify everything, the "rich get richer, the poor become slaves" is something that history told us happened even before the democracy was introduced to the Ancient Greece, some 2600 years ago. It's nothing specific for the current times. The golden age and democracy we adore since then didn't start with the "more of that inequality" but with the total opposite: https://en.wikipedia.org/wiki/Seisachtheia https://en.wikipedia.org/wiki/Seisachtheia "the relief of burdens" "The seisachtheia laws immediately cancelled all outstanding debts, retroactively emancipated all previously enslaved debtors, reinstated all confiscated serf property to the hektemoroi, and forbade the use of personal freedom as collateral in all future debts. The laws instituted a ceiling to maximum property size - regardless of the legality of its acquisition (i.e. by marriage), meant to prevent excessive accumulation of land by powerful families."
jcalvinowens 11y ago
> his essay [...] reads as a loosey historical narrative manufactured to defend his belief that the fight against "economic inequality" will undermine innovation by disincentivizing the next Zuckerberg Well put. The argument that general taxation disincentives innovation has never made any sense to me: no matter how high the tax rate, your post-tax income still scales linearly with your gross income. If your object is to make increasing amounts of money, how does a tax give you less incentive to do so?
- quadrangle 11y ago
  Devil's advocate: If more income takes more work, and I'm already rich, then the extra work is only worth it to me if I get a really substantial return, not just some minor increase. (In reality, only totally naive people believe that any billionaire cares at all about making more money for the sake of the money. It's actually about power and about irrational desire to be higher in the rankings compared to other billionaires… unless they have other motivations that aren't related to their profit, of course)
  - zanny 11y ago
    Which is also in contradiction to Grams perspective. Its insane to claim that you need to keep wealth concentration uncapped to incentivize innovation, because a supermajority of novel innovation comes from people at the bottom becoming rich, not the rich getting richer. Its important to distinguish enabling upward mobility through entrepreneurship and incentivizing that with reasonable taxes and stopping billionaire bank tycoons from buying houses of legislature with overseas bank accounts and ownership stake in half the multinational corporations in town. It also contributes to why that wealth concentration is a problem, because it snowballs - in an unbiased economy with modest inflation the rich must reinvest somewhere to maintain their relative wealth or lose it. When you have enough to use force of law to distort the market so you don't have to take the same degree of risk in those investments, or even make them at all, you break the system. So while wealth inequality is a symptom of globalized economic forces, that wealth inequality perpetuates itself in how it will be used to stymie innovation and promote selective growth for those first to get there.
    - mhaymo 11y ago
      > a supermajority of novel innovation comes from people at the bottom becoming rich, not the rich getting richer. Citation needed? As PG points out, most startup founders are not poor. They take the risk of innovating not because they are desperate, but because they see a large upside. Reducing that upside will certainly reduce the motivation to innovate at the margins. The only question is how much does it reduce motivation, and do the benefits outweigh the costs?
golergka 11y ago
> top 1% of the population, which owns more than the rest of the 99% combined http://www.levyinstitute.org/pubs/wp_589.pdf http://www.levyinstitute.org/pubs/wp_589.pdf This study that I found (after just 3 minutes of googling, btw) says that top 1% own only 34.6%. Do you have a source for your figures?
- pcmaffey 11y ago
  http://policy-practice.oxfam.org.uk/publications/wealth-having-it-all-and-wanting-more-338125 http://policy-practice.oxfam.org.uk/publications/wealth-havi...
  - golergka 11y ago
    Thanks. However, I found that original source for the wealth distribution figures, the Credit Suisse Global Wealth Report, to be a much more interesting read: https://publications.credit-suisse.com/tasks/render/file/?fileID=F2425415-DCA7-80B8-EAD989AF9341D47E https://publications.credit-suisse.com/tasks/render/file/?fi...
  - bzbarsky 11y ago
    Note that this is global wealth, whereas golergka's link is about the US specifically. Turns out, the world in general has a lot more poor people (both absolute, and as a fraction of the population) than the US does, so globally more wealth is concentrated in a smaller population fraction. I agree that for the world at large the wealth distribution is clearly not good. The good news is that it's been getting a lot better in the last few decades, largely due to India and especially China moving people out of poverty by the hundreds of millions. For the US specifically, things are less clear.
logicchains 11y ago
>But it misses the underlying point of wealth creation: if more people create more wealth, then naturally, there should be less poverty. There is tremendously less poverty in the world now than 50 or 100 years ago: https://www.washingtonpost.com/news/worldviews/wp/2015/10/05/for-the-first-time-less-than-10-percent-of-the-world-is-living-in-extreme-poverty-world-bank-says/ https://www.washingtonpost.com/news/worldviews/wp/2015/10/05.... There's only more poverty if it's defined in a purely relative sense, but the relative definition of poverty is only relevant to ideological arguments and pandering to peoples' envy, not to describing peoples' actual material quality of living.

acqq 11y ago

Exactly, no matter how much some people try to mystify everything, the "rich get richer, the poor become slaves" is something that history told us happened even before the democracy was introduced to the Ancient Greece, some 2600 years ago. It's nothing specific for the current times. The golden age and democracy we adore since then didn't start with the "more of that inequality" but with the total opposite: https://en.wikipedia.org/wiki/Seisachtheia https://en.wikipedia.org/wiki/Seisachtheia "the relief of burdens" "The seisachtheia laws immediately cancelled all outstanding debts, retroactively emancipated all previously enslaved debtors, reinstated all confiscated serf property to the hektemoroi, and forbade the use of personal freedom as collateral in all future debts. The laws instituted a ceiling to maximum property size - regardless of the legality of its acquisition (i.e. by marriage), meant to prevent excessive accumulation of land by powerful families."

jcalvinowens 11y ago

> his essay [...] reads as a loosey historical narrative manufactured to defend his belief that the fight against "economic inequality" will undermine innovation by disincentivizing the next Zuckerberg Well put. The argument that general taxation disincentives innovation has never made any sense to me: no matter how high the tax rate, your post-tax income still scales linearly with your gross income. If your object is to make increasing amounts of money, how does a tax give you less incentive to do so?

quadrangle 11y ago
Devil's advocate: If more income takes more work, and I'm already rich, then the extra work is only worth it to me if I get a really substantial return, not just some minor increase. (In reality, only totally naive people believe that any billionaire cares at all about making more money for the sake of the money. It's actually about power and about irrational desire to be higher in the rankings compared to other billionaires… unless they have other motivations that aren't related to their profit, of course)
- zanny 11y ago
  Which is also in contradiction to Grams perspective. Its insane to claim that you need to keep wealth concentration uncapped to incentivize innovation, because a supermajority of novel innovation comes from people at the bottom becoming rich, not the rich getting richer. Its important to distinguish enabling upward mobility through entrepreneurship and incentivizing that with reasonable taxes and stopping billionaire bank tycoons from buying houses of legislature with overseas bank accounts and ownership stake in half the multinational corporations in town. It also contributes to why that wealth concentration is a problem, because it snowballs - in an unbiased economy with modest inflation the rich must reinvest somewhere to maintain their relative wealth or lose it. When you have enough to use force of law to distort the market so you don't have to take the same degree of risk in those investments, or even make them at all, you break the system. So while wealth inequality is a symptom of globalized economic forces, that wealth inequality perpetuates itself in how it will be used to stymie innovation and promote selective growth for those first to get there.
  - mhaymo 11y ago
    > a supermajority of novel innovation comes from people at the bottom becoming rich, not the rich getting richer. Citation needed? As PG points out, most startup founders are not poor. They take the risk of innovating not because they are desperate, but because they see a large upside. Reducing that upside will certainly reduce the motivation to innovate at the margins. The only question is how much does it reduce motivation, and do the benefits outweigh the costs?

golergka 11y ago

> top 1% of the population, which owns more than the rest of the 99% combined http://www.levyinstitute.org/pubs/wp_589.pdf http://www.levyinstitute.org/pubs/wp_589.pdf This study that I found (after just 3 minutes of googling, btw) says that top 1% own only 34.6%. Do you have a source for your figures?

pcmaffey 11y ago
http://policy-practice.oxfam.org.uk/publications/wealth-having-it-all-and-wanting-more-338125 http://policy-practice.oxfam.org.uk/publications/wealth-havi...
- golergka 11y ago
  Thanks. However, I found that original source for the wealth distribution figures, the Credit Suisse Global Wealth Report, to be a much more interesting read: https://publications.credit-suisse.com/tasks/render/file/?fileID=F2425415-DCA7-80B8-EAD989AF9341D47E https://publications.credit-suisse.com/tasks/render/file/?fi...
- bzbarsky 11y ago
  Note that this is global wealth, whereas golergka's link is about the US specifically. Turns out, the world in general has a lot more poor people (both absolute, and as a fraction of the population) than the US does, so globally more wealth is concentrated in a smaller population fraction. I agree that for the world at large the wealth distribution is clearly not good. The good news is that it's been getting a lot better in the last few decades, largely due to India and especially China moving people out of poverty by the hundreds of millions. For the US specifically, things are less clear.

logicchains 11y ago

>But it misses the underlying point of wealth creation: if more people create more wealth, then naturally, there should be less poverty. There is tremendously less poverty in the world now than 50 or 100 years ago: https://www.washingtonpost.com/news/worldviews/wp/2015/10/05/for-the-first-time-less-than-10-percent-of-the-world-is-living-in-extreme-poverty-world-bank-says/ https://www.washingtonpost.com/news/worldviews/wp/2015/10/05.... There's only more poverty if it's defined in a purely relative sense, but the relative definition of poverty is only relevant to ideological arguments and pandering to peoples' envy, not to describing peoples' actual material quality of living.