5 ms·

> He's saying income inequality is a feature of technology allowing people to be paid their market value and that you can't 'fix' that. The thing that I worry

by curun1r 11y ago

> He's saying income inequality is a feature of technology allowing people to be paid their market value and that you can't 'fix' that. The thing that I worry about is whether this feature is destroying the conditions that allowed it to become a feature in the first place. He mentioned the example of Apple and IBM, which I see as illustrative in another way. Would personal computing devices have become popular in a highly fragmented world? According to Wikipedia, the Apple II cost over $5k, accounting for inflation. Absent a healthy middle class, which was created by the era of conformity and relative income equality, would there have been enough consumers to create a market for a $5k computer? As we see income inequality rise, are we not also going to see the opportunity for wealth creation diminish as capital congregates in the hands of a class that largely conserves it? I think we're already seeing this. As an exercise, try to think of something non-niche that costs around $5k, the price of the Apple II, for which there isn't some form of financing (auto/home/college loans and such). I'm hard-pressed to think of something and I believe it's because there's an increasingly small number of people that can afford such a product. We're already losing the conditions that allowed Apple to introduce the personal computer. There's a long ways that this trend can go before it becomes untenable, but the end result of income inequality will be an environment where it's quite difficult to get paid your market value because the market that funds the employment market will have dried up.

randallsquared 11y ago
> As an exercise, try to think of something non-niche that costs around $5k, the price of the Apple II, for which there isn't some form of financing (auto/home/college loans and such). I'm hard-pressed to think of something and I believe it's because there's an increasingly small number of people that can afford such a product. If someone can afford something with financing, they can afford it without. The difference here is not wealth or income, it's spending and savings habits.
- quadrangle 11y ago
  So, someone who needs a car to get to work at their new job but has no existing wealth can afford the car equally with or without financing, just based on spending and saving habits???
  - randallsquared 11y ago
    Cars specifically excluded by the poster to whom I replied. But the sibling comment to yours made exactly the same point about housing. Should I have highlighted the quote from the grandparent post better?
    - quadrangle 11y ago
      Probably that would have been good. FWIW, I think it's preferable to never need financing ever, and it really ought to be only used for things that are investments (real estate, education, expenses that relate to accessing or building new work/business) and never for pure consumption. So, I get your overall point. The other thing to recognize is that being poor is MORE EXPENSIVE than being rich. This fundamental fact is often missed by richer (or just middle-class) folks who think that poor people could do better by saving and being frugal etc. Well, if you have no liquid cash at all, you can't even take advantage of quantity discounts or other opportunities, but you still need to eat and have clothes. A decent amount of wealthier people in our system get wealthy via taking advantage of the desperation of poor people, and until that changes, some amount of criticizing the personal financial decisions of poor folks is just victim-blaming.
      - caf 11y ago
        I think financing - provided you can obtain it at a good rate, which of course you can't if you're poor - makes sense whenever the benefits of a purchase are expected to be spread out over time.
        quadrangle 11y ago
        That's only ever true if you have other potentially-higher return investing your resources in other ways or if you're getting into talking about risk issues and bankruptcy law. If you have enough cash to buy a car and enough left to be an emergency buffer and cover other needs and don't have something to do with that cash which promises a higher investment return than the interest on a car loan, then it does not make sense to get the financing. It doesn't matter that the value of the car to you is spread out over time. Buying the car outright is better unless you needed the money for something else or didn't have it or had some investment that would outpace the interest on the loan.
- deleted 11y ago
  [deleted]
- irishcoffee 11y ago
  Allow me to introduce you to the 2008ish housing bubble.
yummyfajitas 11y ago
The middle class has shrunk because more people have become rich. So it seems that today there are greater opportunities to sell expensive hardware, particularly since even the lower classes are (in absolute terms) richer than the middle class of the Apple II era. http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/ http://www.pewsocialtrends.org/2015/12/09/the-american-middl... As for 5k products, like fancy drones, 3d printers or high end bicycles, was the apple II non-niche?
- mcguire 11y ago
  Source for that first sentence?
  - yummyfajitas 11y ago
    The link provided. Look at the charts, not the mood affiliation.
- rdtsc 11y ago
  > So it seems that today there are greater opportunities to sell expensive hardware, particularly since even the lower classes are (in absolute terms) richer than the middle class of the Apple II era. What has happened is instead technology allowed some luxury products to be commodized and available to everyone. I doubt multi-billionairs build their own OS-es, cell phone towers, hardware, batteries, support from scratch. They buy an iPhone. Someone on food stamps could concievable save money and still get an iPhone. They both have a luxury product so to speak. But this is a cool anomaly. It doesn't happen with cars, housing, job opportunities, healthcare, clothes, safety, free time, food, etc. So I think looking what kind of tech products are avaiable to everyone doesn't work as an argument regarding inequality. What about inflation adjusted salary, isn't that a better metric to look at? Or say the cost of healthcare or housing as percentage of wages... defintely not the type of computer and printers people can get.
  - yummyfajitas 11y ago
    75% of poor Americans own at least 1 car, and 45% own their own home. Most poor people have copious amounts of free time; only a fraction work. http://www.census.gov/prod/2008pubs/h150-07.pdf http://www.census.gov/prod/2008pubs/h150-07.pdf Of course, this is tangential to curun1r's claim, which is that somehow an inability for consumers to purchase new technologies would hinder innovation.
TheOtherHobbes 11y ago
>He mentioned the example of Apple and IBM, And on that, as on so much else, he's more than a little wrong. Apple and Microsoft simply couldn't have happened without the mega-corps - not least HP, but also IBM, and Fairchild and its spin-offs - which only existed because of post-war military and civilian "socialist" state support for technology. By the mid-70s that support had been influencing economic policy for more than forty years. Apple was a product of that system, not a cause of it. Companies like Apple do not happen in a pure deregulated neoliberal market paradise because markets don't have the kind of strategic intelligence that can fund projects like Whirlwind, TX-0, and the original Arpanet - all of which are essential steps on the road to making an Apple or a Google. >Absent a healthy middle class, which was created by the era of conformity and relative income equality, would there have been enough consumers to create a market for a $5k computer? As we see income inequality rise, are we not also going to see the opportunity for wealth creation diminish as capital congregates in the hands of a class that largely conserves it? And this is why they can't happen. You can't build your economy by impoverishing your customers with hand-wavey idealism about "market rates." If you try that, at best you run out of customers, and at worst you get a violent revolution. The smart way to understand the economy isn't as a number of acquisitive centres for a vague thing called "money", but as a way of amplifying collective intelligence and distributing the gains as widely as possible. Status games for their own sake - which include most purely speculative and acquisitive activity - are the opposite of collective intelligence because they concentrate acquisition instead of distributing it. You can get localised negentropic blips in a speculative economy, but the overall trend will still decrease collective opportunity over the medium/long term rather than increasing it.
- analog31 11y ago
  Interesting perspective. Thanks. Companies like Apple do not happen in a pure deregulated neoliberal market paradise because markets don't have the kind of strategic intelligence that can fund projects like Whirlwind, TX-0, and the original Arpanet - all of which are essential steps on the road to making an Apple or a Google. Going even further, corporations themselves do not happen in the absence of regulation, and I think that the granddaddy of entitlements -- liability limitation -- is necessary in order to gather enough capital to form great ventures like chip manufacturing.
massysett 11y ago
I doubt the Apple ][ was a middle-class good. Its killer app was VisiCalc, which households had little use for. Back then a computer was nothing but a toy for a household. The Apple ][ was a bargain for businesses, not households. Certainly it was not a middle-class good in the same way that an iPhone is.

by curun1r 11y ago

randallsquared 11y ago

> As an exercise, try to think of something non-niche that costs around $5k, the price of the Apple II, for which there isn't some form of financing (auto/home/college loans and such). I'm hard-pressed to think of something and I believe it's because there's an increasingly small number of people that can afford such a product. If someone can afford something with financing, they can afford it without. The difference here is not wealth or income, it's spending and savings habits.

quadrangle 11y ago
So, someone who needs a car to get to work at their new job but has no existing wealth can afford the car equally with or without financing, just based on spending and saving habits???
- randallsquared 11y ago
  Cars specifically excluded by the poster to whom I replied. But the sibling comment to yours made exactly the same point about housing. Should I have highlighted the quote from the grandparent post better?
  - quadrangle 11y ago
    Probably that would have been good. FWIW, I think it's preferable to never need financing ever, and it really ought to be only used for things that are investments (real estate, education, expenses that relate to accessing or building new work/business) and never for pure consumption. So, I get your overall point. The other thing to recognize is that being poor is MORE EXPENSIVE than being rich. This fundamental fact is often missed by richer (or just middle-class) folks who think that poor people could do better by saving and being frugal etc. Well, if you have no liquid cash at all, you can't even take advantage of quantity discounts or other opportunities, but you still need to eat and have clothes. A decent amount of wealthier people in our system get wealthy via taking advantage of the desperation of poor people, and until that changes, some amount of criticizing the personal financial decisions of poor folks is just victim-blaming.
    - caf 11y ago
      I think financing - provided you can obtain it at a good rate, which of course you can't if you're poor - makes sense whenever the benefits of a purchase are expected to be spread out over time.
      - quadrangle 11y ago
        That's only ever true if you have other potentially-higher return investing your resources in other ways or if you're getting into talking about risk issues and bankruptcy law. If you have enough cash to buy a car and enough left to be an emergency buffer and cover other needs and don't have something to do with that cash which promises a higher investment return than the interest on a car loan, then it does not make sense to get the financing. It doesn't matter that the value of the car to you is spread out over time. Buying the car outright is better unless you needed the money for something else or didn't have it or had some investment that would outpace the interest on the loan.
deleted 11y ago
[deleted]
irishcoffee 11y ago
Allow me to introduce you to the 2008ish housing bubble.

yummyfajitas 11y ago

The middle class has shrunk because more people have become rich. So it seems that today there are greater opportunities to sell expensive hardware, particularly since even the lower classes are (in absolute terms) richer than the middle class of the Apple II era. http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/ http://www.pewsocialtrends.org/2015/12/09/the-american-middl... As for 5k products, like fancy drones, 3d printers or high end bicycles, was the apple II non-niche?

mcguire 11y ago
Source for that first sentence?
- yummyfajitas 11y ago
  The link provided. Look at the charts, not the mood affiliation.
rdtsc 11y ago
> So it seems that today there are greater opportunities to sell expensive hardware, particularly since even the lower classes are (in absolute terms) richer than the middle class of the Apple II era. What has happened is instead technology allowed some luxury products to be commodized and available to everyone. I doubt multi-billionairs build their own OS-es, cell phone towers, hardware, batteries, support from scratch. They buy an iPhone. Someone on food stamps could concievable save money and still get an iPhone. They both have a luxury product so to speak. But this is a cool anomaly. It doesn't happen with cars, housing, job opportunities, healthcare, clothes, safety, free time, food, etc. So I think looking what kind of tech products are avaiable to everyone doesn't work as an argument regarding inequality. What about inflation adjusted salary, isn't that a better metric to look at? Or say the cost of healthcare or housing as percentage of wages... defintely not the type of computer and printers people can get.
- yummyfajitas 11y ago
  75% of poor Americans own at least 1 car, and 45% own their own home. Most poor people have copious amounts of free time; only a fraction work. http://www.census.gov/prod/2008pubs/h150-07.pdf http://www.census.gov/prod/2008pubs/h150-07.pdf Of course, this is tangential to curun1r's claim, which is that somehow an inability for consumers to purchase new technologies would hinder innovation.

TheOtherHobbes 11y ago

>He mentioned the example of Apple and IBM, And on that, as on so much else, he's more than a little wrong. Apple and Microsoft simply couldn't have happened without the mega-corps - not least HP, but also IBM, and Fairchild and its spin-offs - which only existed because of post-war military and civilian "socialist" state support for technology. By the mid-70s that support had been influencing economic policy for more than forty years. Apple was a product of that system, not a cause of it. Companies like Apple do not happen in a pure deregulated neoliberal market paradise because markets don't have the kind of strategic intelligence that can fund projects like Whirlwind, TX-0, and the original Arpanet - all of which are essential steps on the road to making an Apple or a Google. >Absent a healthy middle class, which was created by the era of conformity and relative income equality, would there have been enough consumers to create a market for a $5k computer? As we see income inequality rise, are we not also going to see the opportunity for wealth creation diminish as capital congregates in the hands of a class that largely conserves it? And this is why they can't happen. You can't build your economy by impoverishing your customers with hand-wavey idealism about "market rates." If you try that, at best you run out of customers, and at worst you get a violent revolution. The smart way to understand the economy isn't as a number of acquisitive centres for a vague thing called "money", but as a way of amplifying collective intelligence and distributing the gains as widely as possible. Status games for their own sake - which include most purely speculative and acquisitive activity - are the opposite of collective intelligence because they concentrate acquisition instead of distributing it. You can get localised negentropic blips in a speculative economy, but the overall trend will still decrease collective opportunity over the medium/long term rather than increasing it.

analog31 11y ago
Interesting perspective. Thanks. Companies like Apple do not happen in a pure deregulated neoliberal market paradise because markets don't have the kind of strategic intelligence that can fund projects like Whirlwind, TX-0, and the original Arpanet - all of which are essential steps on the road to making an Apple or a Google. Going even further, corporations themselves do not happen in the absence of regulation, and I think that the granddaddy of entitlements -- liability limitation -- is necessary in order to gather enough capital to form great ventures like chip manufacturing.

massysett 11y ago

I doubt the Apple ][ was a middle-class good. Its killer app was VisiCalc, which households had little use for. Back then a computer was nothing but a toy for a household. The Apple ][ was a bargain for businesses, not households. Certainly it was not a middle-class good in the same way that an iPhone is.