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Would you be more sad if her salary went up to $15/hour (~2x), but yours went up to $210/hour (~3x, assuming you started from $70 ~= 10 x $7)? If this would not

Would you be more sad if her salary went up to $15/hour (~2x), but yours went up to $210/hour (~3x, assuming you started from $70 ~= 10 x $7)? If this would not make you sad, then inequality isn't really the problem.

anon4 11y ago
Well, of course inequality itself is not the problem. If a loaf of bread costs 0.20$ and rent is 50$/month, while keeping all salaries at their current level. However, inequality has a definite effect on economics and prices, so we can deduce that if the ratio of the two salaries were greater than it already is, while the job remains the exact same, then his mother would be in a worse position.
- yummyfajitas 11y ago
  I should have clarified that I meant those dollar figures in real terms. In the scenario I'm describing one of them can buy 2x as many things while the other can buy 3x. Inflation is a separate problem.
  - ACow_Adonis 11y ago
    Well of course inflation is a separate problem if you define figures in real terms...that's essentially a tautology, since real is defined as nominal minus inflation. Back in the real world however, the relative price/value/production of things is not a separate problem...and since I'm guessing most people's objections to inequality is not its effects in some hypothetical world where all concepts are independent, but in the real world where they all connected, I'm not sure hypotheticals of this nature are often that useful...
    - yummyfajitas 11y ago
      Hypotheticals of this nature are useful for figuring out our terminal values. If the situation I described does not make the OP more sad, then inequality is not the ultimate problem. If you want to claim that inequality somehow causes poverty (and poverty is the real problem), make that case.
  - sangnoir 11y ago
    >> However, inequality has a definite effect on economics and prices, so we can deduce that if the ratio of the two salaries were greater than it already is, while the job remains the exact same, then his mother would be in a worse position > Inflation is a separate problem It's not just inflation: supply/demand dynamics will be changed across income levels. For example bidding wars might cause rentals to go up, and the mother will be outbid (see: gentrification or recent news on San Franciso rents)
philsnow 11y ago
In terms of relative buying power, going from $7.50/h to $15/h is a much bigger jump than going from $70/h to $210/h. This is sort of a sick twist on the idea that "the house always wins" or "the market can remain illogical longer than you can remain solvent": at lower incomes, it sometimes only takes one car maintenance, one unexpected trip to the dentist, before you have to start picking and choosing what bills to pay. At the higher end, you're picking and choosing what vacations to put off for a little while. Incremental money at the lower end is worth way more. Inequality is the problem.
- yummyfajitas 11y ago
  You just agreed that a situation which increases inequality (rich person gaining 3x, poor person 2x) helps the poorer person more. How do you reconcile this with the claim that inequality is the problem?
  - SCHiM 11y ago
    That's just basic economy. And it was also adequately explained in the post you just responded to. The more you already have of something the less it's worth to you, that goes for almost everything including money in this case.
  - Nutmog 11y ago
    Isn't inequality just a polite word for jealousy? We're all peasants compared to some possible future generations 100 years in the future with all their cancer cures and Mars holidays.
    - phaer 11y ago
      No, it is not. "Jealousy" is a subjective feeling, "inequality" says something about the bigger economy.
    - phaer 11y ago
      No, it is not. "Jealousy" is a subjective feeling, "inequality" says something about the bigger economy.
w_t_payne 11y ago
We can't have the jobs that we want and make the things that we want if the market can't afford to buy them. As well as focussing our discussion on economic equality and social justice, we can also approach the problem from a perspective of enlightened self-interest. Widely distributed economic equality implies a greater ability to spend, and a greater ability to borrow, and a greater ability to create wealth in aggregate. A wider distribution of wealth, on average, yields greater wealth overall. This doesn't imply equality -- just a distribution of wealth that is closer to a Normal/Gaussian distribution, with less of it's "energy" disappearing off into the upper tail of the wealthy -- a tail which is necessarily inefficient due to its' bandwidth constraints and limited decision making capacity.
lmm 11y ago
I suspect I'd be sadder, though certainly there's some ratio at which my happiness at our gain in overall wealth would outweigh my sadness at our increased inequality. Let me suggest one of those data-driven analyses you like: for a set of equal-population regions or some such (ideally not just countries, although that might be the only way data is available), plot a happiness measure against mean wealth (income might be easier to get figures for) and Gini coefficient, and do a linear regression or similar. That should give a formula for how efficient wealth redistribution policies need to be (i.e. how much they need to lower the Gini per dollar-per-capita expended[1]) to be worthwhile in terms of increasing overall happiness. [1] Of course actually redistributed dollars aren't expended and don't change average wealth at all. But the redistribution programme would involve a certain amount of labour that could otherwise be used productively being redirected to administration, court battles, police etc. and the value of that labour is expended.
- yummyfajitas 11y ago
  Suppose I ran the same analysis, but put "% black people" on the x-axis. Suppose that this gives me a better fit than your proposed analysis. Would you then accept that as a formula for how efficient re-segregation would be? Or in this case, would you recognize that correlation isn't causation?
  - lmm 11y ago
    > Suppose I ran the same analysis, but put "% black people" on the x-axis. Suppose that this gives me a better fit than your proposed analysis. Would you then accept that as a formula for how efficient re-segregation would be? Yes, although surely segregation just moves people around and can't change the average percentage, and so the net effect would always be zero. > Or in this case, would you recognize that correlation isn't causation? Do you think the causal factors are different then? I think inequality directly causes unhappiness in and of itself. That matches my subjective experience and the rhetoric I hear from many others.

anon4 11y ago

Well, of course inequality itself is not the problem. If a loaf of bread costs 0.20$ and rent is 50$/month, while keeping all salaries at their current level. However, inequality has a definite effect on economics and prices, so we can deduce that if the ratio of the two salaries were greater than it already is, while the job remains the exact same, then his mother would be in a worse position.

yummyfajitas 11y ago
I should have clarified that I meant those dollar figures in real terms. In the scenario I'm describing one of them can buy 2x as many things while the other can buy 3x. Inflation is a separate problem.
- ACow_Adonis 11y ago
  Well of course inflation is a separate problem if you define figures in real terms...that's essentially a tautology, since real is defined as nominal minus inflation. Back in the real world however, the relative price/value/production of things is not a separate problem...and since I'm guessing most people's objections to inequality is not its effects in some hypothetical world where all concepts are independent, but in the real world where they all connected, I'm not sure hypotheticals of this nature are often that useful...
  - yummyfajitas 11y ago
    Hypotheticals of this nature are useful for figuring out our terminal values. If the situation I described does not make the OP more sad, then inequality is not the ultimate problem. If you want to claim that inequality somehow causes poverty (and poverty is the real problem), make that case.
- sangnoir 11y ago
  >> However, inequality has a definite effect on economics and prices, so we can deduce that if the ratio of the two salaries were greater than it already is, while the job remains the exact same, then his mother would be in a worse position > Inflation is a separate problem It's not just inflation: supply/demand dynamics will be changed across income levels. For example bidding wars might cause rentals to go up, and the mother will be outbid (see: gentrification or recent news on San Franciso rents)

philsnow 11y ago

In terms of relative buying power, going from $7.50/h to $15/h is a much bigger jump than going from $70/h to $210/h. This is sort of a sick twist on the idea that "the house always wins" or "the market can remain illogical longer than you can remain solvent": at lower incomes, it sometimes only takes one car maintenance, one unexpected trip to the dentist, before you have to start picking and choosing what bills to pay. At the higher end, you're picking and choosing what vacations to put off for a little while. Incremental money at the lower end is worth way more. Inequality is the problem.

yummyfajitas 11y ago
You just agreed that a situation which increases inequality (rich person gaining 3x, poor person 2x) helps the poorer person more. How do you reconcile this with the claim that inequality is the problem?
- SCHiM 11y ago
  That's just basic economy. And it was also adequately explained in the post you just responded to. The more you already have of something the less it's worth to you, that goes for almost everything including money in this case.
- Nutmog 11y ago
  Isn't inequality just a polite word for jealousy? We're all peasants compared to some possible future generations 100 years in the future with all their cancer cures and Mars holidays.
  - phaer 11y ago
    No, it is not. "Jealousy" is a subjective feeling, "inequality" says something about the bigger economy.
  - phaer 11y ago
    No, it is not. "Jealousy" is a subjective feeling, "inequality" says something about the bigger economy.

w_t_payne 11y ago

We can't have the jobs that we want and make the things that we want if the market can't afford to buy them. As well as focussing our discussion on economic equality and social justice, we can also approach the problem from a perspective of enlightened self-interest. Widely distributed economic equality implies a greater ability to spend, and a greater ability to borrow, and a greater ability to create wealth in aggregate. A wider distribution of wealth, on average, yields greater wealth overall. This doesn't imply equality -- just a distribution of wealth that is closer to a Normal/Gaussian distribution, with less of it's "energy" disappearing off into the upper tail of the wealthy -- a tail which is necessarily inefficient due to its' bandwidth constraints and limited decision making capacity.

lmm 11y ago

I suspect I'd be sadder, though certainly there's some ratio at which my happiness at our gain in overall wealth would outweigh my sadness at our increased inequality. Let me suggest one of those data-driven analyses you like: for a set of equal-population regions or some such (ideally not just countries, although that might be the only way data is available), plot a happiness measure against mean wealth (income might be easier to get figures for) and Gini coefficient, and do a linear regression or similar. That should give a formula for how efficient wealth redistribution policies need to be (i.e. how much they need to lower the Gini per dollar-per-capita expended[1]) to be worthwhile in terms of increasing overall happiness. [1] Of course actually redistributed dollars aren't expended and don't change average wealth at all. But the redistribution programme would involve a certain amount of labour that could otherwise be used productively being redirected to administration, court battles, police etc. and the value of that labour is expended.

yummyfajitas 11y ago
Suppose I ran the same analysis, but put "% black people" on the x-axis. Suppose that this gives me a better fit than your proposed analysis. Would you then accept that as a formula for how efficient re-segregation would be? Or in this case, would you recognize that correlation isn't causation?
- lmm 11y ago
  > Suppose I ran the same analysis, but put "% black people" on the x-axis. Suppose that this gives me a better fit than your proposed analysis. Would you then accept that as a formula for how efficient re-segregation would be? Yes, although surely segregation just moves people around and can't change the average percentage, and so the net effect would always be zero. > Or in this case, would you recognize that correlation isn't causation? Do you think the causal factors are different then? I think inequality directly causes unhappiness in and of itself. That matches my subjective experience and the rhetoric I hear from many others.