5 ms·

I'm surprised at how primitive the response to pg's essay has been. None of it seems to respond to the central point of the essay (which is that economic inequa

by tkiley 11y ago

I'm surprised at how primitive the response to pg's essay has been. None of it seems to respond to the central point of the essay (which is that economic inequality has many causes, and we should specifically attack the bad causes, not inequality itself). In spite of all the noise, I do disagree with the central point. Economic inequality may be caused by good things, but it is still bad. Wealth is opportunity and political influence. Therefore economic inequality is inequality of opportunity and political influence. Persistent intergenerational economic inequality is pretty much bad by definition. Inequality - a bad thing - can be caused as a byproduct of good activity. It's still bad. It's a negative externality, like environmental pollution. In fact, there's some striking parallels - a buildup of inequality, like a buildup of pollution, can trigger the collapse of the ecosystem. We need to agree that inequality is categorically bad so we can have a real discussion of how to keep it under control. It would be crazy to argue that farming is good so farm-related pollution does not need to be controlled. Likewise with startups and inequality.

apsec112 11y ago
"Wealth is opportunity and political influence." Larry Page, net worth $29 billion, and Sergey Brin, net worth $34 billion, have so little political influence that they can't get a small city's government to approve a new bridge over a creek: http://www.mv-voice.com/news/2013/12/12/council-deadlocks-on-google-bridge-idea http://www.mv-voice.com/news/2013/12/12/council-deadlocks-on...
- lftl 11y ago
  Ironically I think smaller local issues are often harder for the wealthy to influence than bigger national issues. As a concerned resident I can probably actually talk face to face with my city representative, and share my concerns about a project like this. I have pretty much no chance of meeting face to face with my state representative without cash or some other means of influence. The councilor probably also has significantly less need for campaign donations from rich benefactors than a national representative. And finally, local representative are most likely making decisions that affect them pretty directly as a resident, whereas national representatives may often be making decisions that have widely dispersed or no direct personal impact. These are all reasons regularly brought forth by Libertarians and Republicans who prefer that centralized government entities defer to local entities as much as possible.
  - barrkel 11y ago
    The same things that make centralized government problematic - making decisions with widely dispersed impact with few personal consequences - are similar for very large organizations. In so far as large companies are permitted to exist by the people for the benefit of stakeholders rather than shareholders (i.e. employees and their communities, suppliers, customers, as well as actual shareholders and bondholders), the executive leadership of a corporation is much like a government, and in a large company, it's a distant one, subject to autocratic rule and upward redistribution of the value created by the whole.
emmelaich 11y ago
"Economic inequality may be caused by good things, but it is still bad" I think you're still making the same error as those primitive responses, because you're making that statement without qualification. I suspect you don't realise how extreme your statement is percieved with the lack of qualification. If one farmer works harder than the guy next door and becomes richer as a result, how is that bad? If someone earning more than the median gets a payrise, they're contributing to poverty as defined in some countries. See also https://en.wikipedia.org/wiki/Harrison_Bergeron https://en.wikipedia.org/wiki/Harrison_Bergeron
- peteretep 11y ago
  Two questions: -) Sergey Brin is worth $35,000,000,000. Has he worked 35,000 times harder or smarter than the 40-year-old Doctor who earns well and has scrimped and saved to $1m in net worth? -) Let's say you'd told Sergey - just as he was starting Google - in 20 years' time you'll have $10m in the bank from this. Do you think that would have encouraged or discouraged him?
  - travisp 11y ago
    Brin has arguably created significantly more value than the 40-year-old Doctor. A doctor who likely uses Google to research medical information on a daily basis (as well as uses it for looking up personal information), possibly using a Google device, who gets from place to place using Google Maps, and searches for information for his next published paper on Google Scholar. (and so on, even putting aside the recent expansion of Google into Medical technology).
    - peteretep 11y ago
      Sure he has. Do you still think he'd have created it if he'd known final pay-out was a fraction of what it was? I suspect so...
      - pj_mukh 11y ago
        I see your point, but it wouldn't have been possibly for him to build Google had it not been for people with MUCH more than $10M in their bank account to bankroll his growth.
moultano 11y ago
>Wealth is opportunity and political influence. While the political influence of wealth is obviously bad, I think it is a small factor in comparison with economic influence. The amount of industry attempting to satiate your desires is proportional to the amount of money you have. Hence the huge disparity between the number of BMW ads on primetime TV and the number of people watching primetime TV that could ever conceivably afford a BMW. The GDP of many countries could be repurposed entirely to serving the desires of the wealthiest few and still not exhaust their purchasing power. In theory, Bill Gates could purchase the entire output of any country smaller than Oman for a year. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi... This is a factor that globalization proponents don't deal with successfully I think. When a country is isolated, it is only the disparities of wealth within the country that distort the production of the country. Once a country enters global trade it is exposed to many orders of magnitude more of difference in purchasing power. All of the optimality results in economics assume that the current distribution of wealth is optimal (or at least exogenous), hence pareto optima and not any other type. This factor deserves more thought and discussion.
philwelch 11y ago
"Persistent intergenerational economic inequality is pretty much bad by definition." If you qualify it that way, sure. That doesn't mean all economic inequality is bad. You don't have to begrudge Sergey Brin his billions, or say the process in which he made those billions in any way is a bad thing, in order to say that people shouldn't be able to inherit billions.
raldi 11y ago
> Economic inequality may be caused by good things, but it is still bad. Wealth is opportunity and political influence. Paul directly addressed this in his reply to Klein (http://paulgraham.com/klein.html); http://paulgraham.com/klein.html); Ctrl-F "the conversion of money into political power"; in brief, he says that if you're upset that economic inequalities leads to unequal political influence, attack that. Fight to remove the political influence that wealth currently has. If we lived in a world where everyone has the same opportunities for social mobility (i.e., universal free education from daycare to PhD, unbiased hiring processes) and the same political influence (no SuperPACs, no lobbyists, mandate that no citizen spends more than $100 / year on political donations, and perhaps give every citizen that $100 / year, as a use-it-or-lose-it source of funding for whatever political causes they wanted to support)... if we lived in such a world, would you still be upset that Mark Zuckerberg had a lot more money than you? Why?
- curun1r 11y ago
  This whole thing is about taxes and yet neither side is honest enough to acknowledge that fact. No one will begrudge PG, Zuckerberg or any of the other high earners continuing to amass considerable wealth so long as they're paying significantly more taxes than they are now. When that happens, even though there are very rich people, there's also a healthy middle class and the social support systems (safety nets, education, etc) for poor people to reach the middle class. But what we have now is rich people hiding behind capital gains tax rates to actually pay less than people who earn significantly less that they do. And PG, as someone who earns his living primarily through investing, is no doubt taking advantage of this situation. When PG says "don't address income inequality directly," it's the equivalent of saying "don't raise my taxes" since raising taxes on the wealthy is the method for addressing income inequality directly. IMHO, the reason he's gotten so much flack is that there is a very large proportion of the population that believes that we need to close the loopholes that the uber-wealthy use to avoid paying the right amount of taxes and increase the top marginal tax brackets to above 50%. And yet he wants to talk about addressing income inequality directly as if his critics want to keep people from earning that much in the first place. I can't tell if he's being deliberately disingenuous or if he actually believes that's what people are suggesting, but the net result is a back and forth conversation at two different contextual levels.
mikekchar 11y ago
I think you need to step back even farther: what is the point of money? If you don't have a good answer to that question, how can you reason about the benefits and drawbacks of different ways to distribute that money? I'm going to out on a limb and suggest that the point of money is economic growth. This may seem like a circular argument, so let me expand on that a little. Imagine you have a farmer. This farmer wants to grow food and he has plenty of land. However, he does not have enough seed to plant all of his land. He has nothing to barter with until after his food is grown, so he ends up "wasting" part of his land (letting it go unplanted) because he could not get enough seed. In this scenario, everybody is a loser. The farmer grows less plants and will not be able to barter for things he needs in the future. Society also gets less plants. So it makes sense to give the farmer more seeds so that he can plant his whole field. In fact, because he can do that, he can repay the favour in the future by giving up some of his fully grown plants. Money is a kind of token that can be used to trade for things. It is very useful for society to give people money if they will use it to trade for things that they need, which will in turn produce things that will improve the quality of living for everyone. Money that is piled up and not spent is not helpful to the economy or society. If there were a limited amount of money (and in some ways there is), then we could say that people who hoard money are a burden on society because they stop people from making use of that money to improve society. Ideally we would split up all the money in the world and give whatever amount is needed to the people who would be able to use it. In a really ideal world, each person would be motivated and able enough to spend the money in a way that would produce benefit for society. Of course this is not the case. There are many people who hoard money (bad). We can also see that there are people who would spend money improving the beer brewing industry (maybe not so bad) at the expense of investing in life saving medical research (arguably seems better than beer in some ways). In fact, quite a lot of people simply want to consume goods and distribute money around, as opposed to trying to improve things. Those people are at best neutral to the system, though better than the hoarders. From a societal point of view, it is best to distribute money in a way that maximises people's ability to use it beneficially, while minimizing people's ability to hoard it or distribute it arbitrarily (buying shiny useless toys or food/shelter that they don't need). So already we can see that depending on what people want to do with money, it is beneficial for society that there is an inequality. Having said all that, I think that the inequality that we have reached at the moment is far from ideal. Now the really interesting bit is that what I wrote so far seems to favour a fascist economic system. I suspect we can do better, though ;-)
digbyloftus 11y ago
If you think there are things people should not be able to buy (political sway) then would it not make sense to focus on those who are both selling this service they shouldn't be and also the ones that are actually buying it? There are plenty of things the average person could afford if we let them, the answer to that wasn't "no one gets any money".
danmaz74 11y ago
> Economic inequality may be caused by good things, but it is still bad Let's correct this into: "excessive economic inequality may be caused by good things, but it is still bad". Then I wholeheartedly agree, and probably PG would agree too. Or, at least, I hope he would agree, and not consider only poverty a bad thing.

by tkiley 11y ago

apsec112 11y ago

"Wealth is opportunity and political influence." Larry Page, net worth $29 billion, and Sergey Brin, net worth $34 billion, have so little political influence that they can't get a small city's government to approve a new bridge over a creek: http://www.mv-voice.com/news/2013/12/12/council-deadlocks-on-google-bridge-idea http://www.mv-voice.com/news/2013/12/12/council-deadlocks-on...

lftl 11y ago
Ironically I think smaller local issues are often harder for the wealthy to influence than bigger national issues. As a concerned resident I can probably actually talk face to face with my city representative, and share my concerns about a project like this. I have pretty much no chance of meeting face to face with my state representative without cash or some other means of influence. The councilor probably also has significantly less need for campaign donations from rich benefactors than a national representative. And finally, local representative are most likely making decisions that affect them pretty directly as a resident, whereas national representatives may often be making decisions that have widely dispersed or no direct personal impact. These are all reasons regularly brought forth by Libertarians and Republicans who prefer that centralized government entities defer to local entities as much as possible.
- barrkel 11y ago
  The same things that make centralized government problematic - making decisions with widely dispersed impact with few personal consequences - are similar for very large organizations. In so far as large companies are permitted to exist by the people for the benefit of stakeholders rather than shareholders (i.e. employees and their communities, suppliers, customers, as well as actual shareholders and bondholders), the executive leadership of a corporation is much like a government, and in a large company, it's a distant one, subject to autocratic rule and upward redistribution of the value created by the whole.

emmelaich 11y ago

"Economic inequality may be caused by good things, but it is still bad" I think you're still making the same error as those primitive responses, because you're making that statement without qualification. I suspect you don't realise how extreme your statement is percieved with the lack of qualification. If one farmer works harder than the guy next door and becomes richer as a result, how is that bad? If someone earning more than the median gets a payrise, they're contributing to poverty as defined in some countries. See also https://en.wikipedia.org/wiki/Harrison_Bergeron https://en.wikipedia.org/wiki/Harrison_Bergeron

peteretep 11y ago
Two questions: -) Sergey Brin is worth $35,000,000,000. Has he worked 35,000 times harder or smarter than the 40-year-old Doctor who earns well and has scrimped and saved to $1m in net worth? -) Let's say you'd told Sergey - just as he was starting Google - in 20 years' time you'll have $10m in the bank from this. Do you think that would have encouraged or discouraged him?
- travisp 11y ago
  Brin has arguably created significantly more value than the 40-year-old Doctor. A doctor who likely uses Google to research medical information on a daily basis (as well as uses it for looking up personal information), possibly using a Google device, who gets from place to place using Google Maps, and searches for information for his next published paper on Google Scholar. (and so on, even putting aside the recent expansion of Google into Medical technology).
  - peteretep 11y ago
    Sure he has. Do you still think he'd have created it if he'd known final pay-out was a fraction of what it was? I suspect so...
    - pj_mukh 11y ago
      I see your point, but it wouldn't have been possibly for him to build Google had it not been for people with MUCH more than $10M in their bank account to bankroll his growth.

moultano 11y ago

>Wealth is opportunity and political influence. While the political influence of wealth is obviously bad, I think it is a small factor in comparison with economic influence. The amount of industry attempting to satiate your desires is proportional to the amount of money you have. Hence the huge disparity between the number of BMW ads on primetime TV and the number of people watching primetime TV that could ever conceivably afford a BMW. The GDP of many countries could be repurposed entirely to serving the desires of the wealthiest few and still not exhaust their purchasing power. In theory, Bill Gates could purchase the entire output of any country smaller than Oman for a year. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi... This is a factor that globalization proponents don't deal with successfully I think. When a country is isolated, it is only the disparities of wealth within the country that distort the production of the country. Once a country enters global trade it is exposed to many orders of magnitude more of difference in purchasing power. All of the optimality results in economics assume that the current distribution of wealth is optimal (or at least exogenous), hence pareto optima and not any other type. This factor deserves more thought and discussion.

philwelch 11y ago

"Persistent intergenerational economic inequality is pretty much bad by definition." If you qualify it that way, sure. That doesn't mean all economic inequality is bad. You don't have to begrudge Sergey Brin his billions, or say the process in which he made those billions in any way is a bad thing, in order to say that people shouldn't be able to inherit billions.

raldi 11y ago

> Economic inequality may be caused by good things, but it is still bad. Wealth is opportunity and political influence. Paul directly addressed this in his reply to Klein (http://paulgraham.com/klein.html); http://paulgraham.com/klein.html); Ctrl-F "the conversion of money into political power"; in brief, he says that if you're upset that economic inequalities leads to unequal political influence, attack that. Fight to remove the political influence that wealth currently has. If we lived in a world where everyone has the same opportunities for social mobility (i.e., universal free education from daycare to PhD, unbiased hiring processes) and the same political influence (no SuperPACs, no lobbyists, mandate that no citizen spends more than $100 / year on political donations, and perhaps give every citizen that $100 / year, as a use-it-or-lose-it source of funding for whatever political causes they wanted to support)... if we lived in such a world, would you still be upset that Mark Zuckerberg had a lot more money than you? Why?

curun1r 11y ago
This whole thing is about taxes and yet neither side is honest enough to acknowledge that fact. No one will begrudge PG, Zuckerberg or any of the other high earners continuing to amass considerable wealth so long as they're paying significantly more taxes than they are now. When that happens, even though there are very rich people, there's also a healthy middle class and the social support systems (safety nets, education, etc) for poor people to reach the middle class. But what we have now is rich people hiding behind capital gains tax rates to actually pay less than people who earn significantly less that they do. And PG, as someone who earns his living primarily through investing, is no doubt taking advantage of this situation. When PG says "don't address income inequality directly," it's the equivalent of saying "don't raise my taxes" since raising taxes on the wealthy is the method for addressing income inequality directly. IMHO, the reason he's gotten so much flack is that there is a very large proportion of the population that believes that we need to close the loopholes that the uber-wealthy use to avoid paying the right amount of taxes and increase the top marginal tax brackets to above 50%. And yet he wants to talk about addressing income inequality directly as if his critics want to keep people from earning that much in the first place. I can't tell if he's being deliberately disingenuous or if he actually believes that's what people are suggesting, but the net result is a back and forth conversation at two different contextual levels.

mikekchar 11y ago

I think you need to step back even farther: what is the point of money? If you don't have a good answer to that question, how can you reason about the benefits and drawbacks of different ways to distribute that money? I'm going to out on a limb and suggest that the point of money is economic growth. This may seem like a circular argument, so let me expand on that a little. Imagine you have a farmer. This farmer wants to grow food and he has plenty of land. However, he does not have enough seed to plant all of his land. He has nothing to barter with until after his food is grown, so he ends up "wasting" part of his land (letting it go unplanted) because he could not get enough seed. In this scenario, everybody is a loser. The farmer grows less plants and will not be able to barter for things he needs in the future. Society also gets less plants. So it makes sense to give the farmer more seeds so that he can plant his whole field. In fact, because he can do that, he can repay the favour in the future by giving up some of his fully grown plants. Money is a kind of token that can be used to trade for things. It is very useful for society to give people money if they will use it to trade for things that they need, which will in turn produce things that will improve the quality of living for everyone. Money that is piled up and not spent is not helpful to the economy or society. If there were a limited amount of money (and in some ways there is), then we could say that people who hoard money are a burden on society because they stop people from making use of that money to improve society. Ideally we would split up all the money in the world and give whatever amount is needed to the people who would be able to use it. In a really ideal world, each person would be motivated and able enough to spend the money in a way that would produce benefit for society. Of course this is not the case. There are many people who hoard money (bad). We can also see that there are people who would spend money improving the beer brewing industry (maybe not so bad) at the expense of investing in life saving medical research (arguably seems better than beer in some ways). In fact, quite a lot of people simply want to consume goods and distribute money around, as opposed to trying to improve things. Those people are at best neutral to the system, though better than the hoarders. From a societal point of view, it is best to distribute money in a way that maximises people's ability to use it beneficially, while minimizing people's ability to hoard it or distribute it arbitrarily (buying shiny useless toys or food/shelter that they don't need). So already we can see that depending on what people want to do with money, it is beneficial for society that there is an inequality. Having said all that, I think that the inequality that we have reached at the moment is far from ideal. Now the really interesting bit is that what I wrote so far seems to favour a fascist economic system. I suspect we can do better, though ;-)

digbyloftus 11y ago

If you think there are things people should not be able to buy (political sway) then would it not make sense to focus on those who are both selling this service they shouldn't be and also the ones that are actually buying it? There are plenty of things the average person could afford if we let them, the answer to that wasn't "no one gets any money".

danmaz74 11y ago

> Economic inequality may be caused by good things, but it is still bad Let's correct this into: "excessive economic inequality may be caused by good things, but it is still bad". Then I wholeheartedly agree, and probably PG would agree too. Or, at least, I hope he would agree, and not consider only poverty a bad thing.