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> But economic inequality per se is not bad. Both essays feel like they are built on a strawman argument. Nobody serious said inequality was bad or good, not e

by HSO 11y ago

> But economic inequality per se is not bad. Both essays feel like they are built on a strawman argument. Nobody serious said inequality was bad or good, not even Piketty. The discussion is about degrees, and PG adds nothing to it by arguing categorically. That we are talking degrees of inequality is also the reason why economists argue with statistics and do not differentiate much between specific causes or mechanisms on the micro level. Sorry to burst that bubble but PG is not a "creator of inequality" on the level that is interesting. Shifting a few hundred people around means nothing given that we are talking about income and wealth distributions over millions of households in the US alone (and increasing inequality is a global phenomenon). Clearly, tax policy, financial (de)regulation, labor market policies, even the fall of the Soviet Union, etc. are more relevant than petty arguments over whether this startup or that high freq trader made a few mega- or even gigabucks in a nice or not so nice way. On a sidenote, the relative impacts of the trader vs the startupper on aggregate welfare is not as clearcut as intimated by PG at all, once you take second- and higher-order effects into account. Furthermore, creating wealth for some individuals may also decrease overall inequality; it depends on the starting and end positions of said individuals in the wealth distribution and the other ongoing processes in the economy. Lastly, economic systems have a lot of feedback mechanisms, both positive (ie destabilizing) and negative (stabilizing). We should at least consider the possibility that past a certain degree of inequality, wealth becomes self-perpetuating. This is especially pertinent for US Americans, given the degenerate nature of their "democracy".

dools 11y ago
Nobody serious said inequality was bad or good Lots of very serious people say that inequality is bad: http://digitalcommons.bard.edu/hm_archive/333/ http://digitalcommons.bard.edu/hm_archive/333/ https://www.youtube.com/watch?v=cZ7LzE3u7Bw&mid=5328 https://www.youtube.com/watch?v=cZ7LzE3u7Bw&mid=5328 http://www.economonitor.com/lrwray/2013/07/09/how-big-is-big-enough-would-the-basic-income-guarantee-satisfy-the-unemployed/ http://www.economonitor.com/lrwray/2013/07/09/how-big-is-big... http://bilbo.economicoutlook.net/blog/?p=11245 http://bilbo.economicoutlook.net/blog/?p=11245 http://moslereconomics.com/2009/09/30/inequality-nothing-to-worry-about-according-to-summers-geithner/ http://moslereconomics.com/2009/09/30/inequality-nothing-to-...
- vasilipupkin 11y ago
  The issue is not static levels of inequality per se. The issue is why inequality should increase. If the 60%th percentile incomes grew 40%, then it is not clear why the bottom 20% percentile income also shouldn't grow 40%. The fact that it didn't is suboptimal and studying this phenomenon makes sense. That doesn't mean that every knee jerk attempt to fix this problem is good. Let me try to explain it like this. It is a valid question to ask why, if one income bracket grew X% over 20 years, did a lower bracket only grow 1/2 X. It is not reasonable to simply dismiss this question as irrelevant by assumption. Because society should want income to grow in all brackets, if possible
  - dools 11y ago
    There is an acceptable level of income inequality, the same as there is an acceptable level of inflation. The determination of what that level of income inequality is, is a complex social analysis task. It's somewhat arbitrary (for example we currently view 3% as an acceptable level of inflation, but that could well be 10% if we wanted it to and we could still make society work). There isn't a single level of income inequality that is bad in all situations, but for some given set of social conditions there exists a level of income inequality that is bad (even if we can't determine precisely what it is ... )
    - vasilipupkin 11y ago
      right. But we are observing both large differences in income growth for bottom brackets vs middle and top brackets AND slow growth in bottom income. And there are economic models that show that these two phenomena are not independent. So, this is something that deserves to be researched, not dismissed and has very little to do with startups, unlike what PG is talking about
    - chrispeel 11y ago
      this. And the question is how do we get to that acceptable level. One option is a progressive income tax with a universal basic income, or (equivalently) having the progressive income turn negative at low incomes.
Tycho 11y ago
The way the phrase is thrown about is unmistakably negative IMO. For a start, 'inequality' is a phrase borrowed from far clearer grievances such as inequality in legal rights for women, minorities etc. By using it in this economic debate it already frames the question as one of harm to a group of people. A neutral phrase would be something like 'wealth concentration.'
viraptor 11y ago
> Nobody serious said inequality was bad or good, not even Piketty. From the Capital ...: > Inequality is not necessarily bad in itself: the key question is to decide whether it is justified, whether there are reasons for it.
deleted 11y ago
[deleted]
spikels 11y ago
He is not arguing "categorically". You are simply misunderstanding. No strawman. Sorry.
- HSO 11y ago
  Let me quote from http://www.paulgraham.com/ineq.html http://www.paulgraham.com/ineq.html: > when I hear people saying that economic inequality is bad and should be eliminated, I feel rather like a wild animal overhearing a conversation between hunters. Nobody is arguing "inequality is bad and should be eliminated". People are arguing that inequality has increased too much and should be dialed back. The question is how (and what is a more reasonable level). > I'm all for shutting down the crooked ways to get rich. But that won't eliminate economic inequality, Ditto > And while it would probably be a good thing for the world if people who wanted to get rich switched from playing zero-sum games to creating wealth, that would not only not eliminate economic inequality, Ditto > You can't end economic inequality without preventing people from getting rich, and you can't do that without preventing them from starting startups. The policy debate is not and never was about "ending inequality". It is to find a different level. And the precise reason people are not advocating for "eliminating inequality" is incentives. As you can see: Strawman. Strawman. Strawman. All the way. Sorry.
  - vasilipupkin 11y ago
    Yes, definitely a strawman. I am not aware of any mainstream politicians or economists proposing to eliminate inequality. Perhaps you can find an anarchist or a communist or two who are proposing that, but it's not on any agenda that has any policy relevance.

by HSO 11y ago

dools 11y ago

Nobody serious said inequality was bad or good Lots of very serious people say that inequality is bad: http://digitalcommons.bard.edu/hm_archive/333/ http://digitalcommons.bard.edu/hm_archive/333/ https://www.youtube.com/watch?v=cZ7LzE3u7Bw&mid=5328 https://www.youtube.com/watch?v=cZ7LzE3u7Bw&mid=5328 http://www.economonitor.com/lrwray/2013/07/09/how-big-is-big-enough-would-the-basic-income-guarantee-satisfy-the-unemployed/ http://www.economonitor.com/lrwray/2013/07/09/how-big-is-big... http://bilbo.economicoutlook.net/blog/?p=11245 http://bilbo.economicoutlook.net/blog/?p=11245 http://moslereconomics.com/2009/09/30/inequality-nothing-to-worry-about-according-to-summers-geithner/ http://moslereconomics.com/2009/09/30/inequality-nothing-to-...

vasilipupkin 11y ago
The issue is not static levels of inequality per se. The issue is why inequality should increase. If the 60%th percentile incomes grew 40%, then it is not clear why the bottom 20% percentile income also shouldn't grow 40%. The fact that it didn't is suboptimal and studying this phenomenon makes sense. That doesn't mean that every knee jerk attempt to fix this problem is good. Let me try to explain it like this. It is a valid question to ask why, if one income bracket grew X% over 20 years, did a lower bracket only grow 1/2 X. It is not reasonable to simply dismiss this question as irrelevant by assumption. Because society should want income to grow in all brackets, if possible
- dools 11y ago
  There is an acceptable level of income inequality, the same as there is an acceptable level of inflation. The determination of what that level of income inequality is, is a complex social analysis task. It's somewhat arbitrary (for example we currently view 3% as an acceptable level of inflation, but that could well be 10% if we wanted it to and we could still make society work). There isn't a single level of income inequality that is bad in all situations, but for some given set of social conditions there exists a level of income inequality that is bad (even if we can't determine precisely what it is ... )
  - vasilipupkin 11y ago
    right. But we are observing both large differences in income growth for bottom brackets vs middle and top brackets AND slow growth in bottom income. And there are economic models that show that these two phenomena are not independent. So, this is something that deserves to be researched, not dismissed and has very little to do with startups, unlike what PG is talking about
  - chrispeel 11y ago
    this. And the question is how do we get to that acceptable level. One option is a progressive income tax with a universal basic income, or (equivalently) having the progressive income turn negative at low incomes.

Tycho 11y ago

The way the phrase is thrown about is unmistakably negative IMO. For a start, 'inequality' is a phrase borrowed from far clearer grievances such as inequality in legal rights for women, minorities etc. By using it in this economic debate it already frames the question as one of harm to a group of people. A neutral phrase would be something like 'wealth concentration.'

viraptor 11y ago

> Nobody serious said inequality was bad or good, not even Piketty. From the Capital ...: > Inequality is not necessarily bad in itself: the key question is to decide whether it is justified, whether there are reasons for it.

deleted 11y ago

[deleted]

spikels 11y ago

He is not arguing "categorically". You are simply misunderstanding. No strawman. Sorry.

HSO 11y ago
Let me quote from http://www.paulgraham.com/ineq.html http://www.paulgraham.com/ineq.html: > when I hear people saying that economic inequality is bad and should be eliminated, I feel rather like a wild animal overhearing a conversation between hunters. Nobody is arguing "inequality is bad and should be eliminated". People are arguing that inequality has increased too much and should be dialed back. The question is how (and what is a more reasonable level). > I'm all for shutting down the crooked ways to get rich. But that won't eliminate economic inequality, Ditto > And while it would probably be a good thing for the world if people who wanted to get rich switched from playing zero-sum games to creating wealth, that would not only not eliminate economic inequality, Ditto > You can't end economic inequality without preventing people from getting rich, and you can't do that without preventing them from starting startups. The policy debate is not and never was about "ending inequality". It is to find a different level. And the precise reason people are not advocating for "eliminating inequality" is incentives. As you can see: Strawman. Strawman. Strawman. All the way. Sorry.
- vasilipupkin 11y ago
  Yes, definitely a strawman. I am not aware of any mainstream politicians or economists proposing to eliminate inequality. Perhaps you can find an anarchist or a communist or two who are proposing that, but it's not on any agenda that has any policy relevance.