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This technique maybe points a way toward answering a very important question: what is the optimum level of inequality in a society? I doubt that the answer wo

by et2o 11y ago

This technique maybe points a way toward answering a very important question: what is the optimum level of inequality in a society? I doubt that the answer would be 'one where everyone is exactly equal,' because we do have differing physical and intellectual capabilities which would mean that if everyone was exactly equal, we would be under-allocating resources to certain people. On the other hand, it's almost assuredly true that the level of inequality we have now is just too high. The difficulty is in finding the exact equation to maximize.

danharaj 11y ago
> I doubt that the answer would be 'one where everyone is exactly equal,' because we do have differing physical and intellectual capabilities which would mean that if everyone was exactly equal, we would be under-allocating resources to certain people. This is only true if one assumes private property and resource equality at the same time. If one abandons private property and tries to imagine systems of resource distribution based on democratic processes, there are far more possibilities. One possibility that obviously doesn't work out is a command economy where a centralized bureaucratic state owns everything. These systems seem to have similar dysfunctions to a megacorporation that owns everything in a country. We've never seen a decentralized, democratic system of communal property at large scale because they're always destroyed by violent means by other systems if they get too big.
- ams6110 11y ago
  Ahh, the old "communism works, it's just never been done right" argument....
  - danharaj 11y ago
    I mean, communism has a particular definition, so if that definition isn't met, then it's not communism. Communism is a classless society with worker control of the means of production. A sprawling centralized state bureaucracy is none of those things. Indeed, the whole departure of Leninism from Marxism is the idea of a vanguard party transitioning from capitalism to communism via a state apparatus. It's a fundamentally elitist doctrine that quite obviously did not work the way it was presupposed to work. It's not like people don't talk about capitalism in heavily idealized terms, either. I've never seen an exegesis of liberalism that doesn't elide the pervasive and frequent expropriation and violent enforcement required to prevent the system from falling over.
roymurdock 11y ago
There is no optimum level of equality that can be solved for using a mathematical equation. "Optimality" always rests upon the underlying qualitative assumptions of how capital/resources should be owned, operated, and distributed to achieve the maximum welfare (for who? society? a city? a community? an individual?) over some period of time (short term? medium term? long term?). Economists regularly use "Pareto Optimality" to solve for an optimal steady state or x-possibility frontier - a state/allocation where it is impossible to make any one person better off without making another worse off. Do you think this is a fair or useful way to determine the optimal allocation of resources?
- stale2002 11y ago
  Pareto optimal solutions is an extremely important concept. If your solutions isn't Pareto optimal, that means we can make someone better off for Free. Of course, just because something is Pareto optimal, doesn't mean it's the best solution. But the best solution is DEFINITELY going to be Pareto optimal.
  - roymurdock 11y ago
    Depends on your qualitative argument for what is "best" and, stepping backwards, what you identify and define as the "problem" that is being solved.
    - stale2002 11y ago
      The "problem" is how to make people better off. If you can make someone better off, without making anyone worse off, then you are pretty much by definitely not at the "best" solution. Because we just identified another solution that is strictly better than what we were at.
      - roymurdock 11y ago
        Right, I'm asking you to define "better".
- 11y ago
ams6110 11y ago
I would argue that inequality is not a problem at all. It doesn't affect me that there are others with vastly more wealth than I have, since I have enough for myself and my family. Unless I'm simply envious, the inequality is not a problem for me. Rather than inequality, the problem is really that the bottom end of the range is too low. There are too many people who are not able to find enough work to provide an adequate income. There's a litany of social and economic reasons for that, but that is the problem, not the inequality itself.
- chillwaves 11y ago
  Except inequality of wealth means inequality of power. Do you really not see the problem with someone's social "power" being 300, 3000x (or worse) that of another person? Maybe that person is Bill Gates. Maybe it is the Koch brothers. But unless you strongly believe wealth correlates to competency and good will, it seems the system will inevitably attract abuse (power corrupts).
- et2o 11y ago
  Inequality is a problem if inequality is restraining the total growth of society or limiting resources/services/goods that would potentially be available to you in a less unequal society.
  - dragonwriter 11y ago
    Inequality is a problem because inequality is itself empirically shown to be a source of disutility, independent of those other concerns you raise. It may also be a problem for those other reasons, but that's not necessary for it to be a problem. (People often mistake output and consumption measures of typical economic statistics for direct measures of experienced utilities. While they are proxies for utility, they are imperfect proxies, and one of the ways we know they are flawed is that they do not account for the disutility that directly results from inequality.)
- slv77 11y ago
  I'd argue that inequality is part of the problem itself. Assume that I am a cobbler and enter into a network where capital is distributed widely. I borrow $200 dollars from 1000 people (mediated by a bank) and buy a home. The second network capital is concentrated and I borrow $100,000 dollar from two people (mediated by a bank) and buy a home. Now I need to pay that capital back, with intererest. I can only do that by making shoes for people. Which network am I going to have a harder time doing that in? The one with 1000 people who have $200 saved in the bank? Or the one that has 2 people who have $100,000 in the bank? Assume all people in the example have two feet.

by et2o 11y ago

danharaj 11y ago

> I doubt that the answer would be 'one where everyone is exactly equal,' because we do have differing physical and intellectual capabilities which would mean that if everyone was exactly equal, we would be under-allocating resources to certain people. This is only true if one assumes private property and resource equality at the same time. If one abandons private property and tries to imagine systems of resource distribution based on democratic processes, there are far more possibilities. One possibility that obviously doesn't work out is a command economy where a centralized bureaucratic state owns everything. These systems seem to have similar dysfunctions to a megacorporation that owns everything in a country. We've never seen a decentralized, democratic system of communal property at large scale because they're always destroyed by violent means by other systems if they get too big.

ams6110 11y ago
Ahh, the old "communism works, it's just never been done right" argument....
- danharaj 11y ago
  I mean, communism has a particular definition, so if that definition isn't met, then it's not communism. Communism is a classless society with worker control of the means of production. A sprawling centralized state bureaucracy is none of those things. Indeed, the whole departure of Leninism from Marxism is the idea of a vanguard party transitioning from capitalism to communism via a state apparatus. It's a fundamentally elitist doctrine that quite obviously did not work the way it was presupposed to work. It's not like people don't talk about capitalism in heavily idealized terms, either. I've never seen an exegesis of liberalism that doesn't elide the pervasive and frequent expropriation and violent enforcement required to prevent the system from falling over.

roymurdock 11y ago

There is no optimum level of equality that can be solved for using a mathematical equation. "Optimality" always rests upon the underlying qualitative assumptions of how capital/resources should be owned, operated, and distributed to achieve the maximum welfare (for who? society? a city? a community? an individual?) over some period of time (short term? medium term? long term?). Economists regularly use "Pareto Optimality" to solve for an optimal steady state or x-possibility frontier - a state/allocation where it is impossible to make any one person better off without making another worse off. Do you think this is a fair or useful way to determine the optimal allocation of resources?

stale2002 11y ago
Pareto optimal solutions is an extremely important concept. If your solutions isn't Pareto optimal, that means we can make someone better off for Free. Of course, just because something is Pareto optimal, doesn't mean it's the best solution. But the best solution is DEFINITELY going to be Pareto optimal.
- roymurdock 11y ago
  Depends on your qualitative argument for what is "best" and, stepping backwards, what you identify and define as the "problem" that is being solved.
  - stale2002 11y ago
    The "problem" is how to make people better off. If you can make someone better off, without making anyone worse off, then you are pretty much by definitely not at the "best" solution. Because we just identified another solution that is strictly better than what we were at.
    - roymurdock 11y ago
      Right, I'm asking you to define "better".
11y ago

ams6110 11y ago

I would argue that inequality is not a problem at all. It doesn't affect me that there are others with vastly more wealth than I have, since I have enough for myself and my family. Unless I'm simply envious, the inequality is not a problem for me. Rather than inequality, the problem is really that the bottom end of the range is too low. There are too many people who are not able to find enough work to provide an adequate income. There's a litany of social and economic reasons for that, but that is the problem, not the inequality itself.

chillwaves 11y ago
Except inequality of wealth means inequality of power. Do you really not see the problem with someone's social "power" being 300, 3000x (or worse) that of another person? Maybe that person is Bill Gates. Maybe it is the Koch brothers. But unless you strongly believe wealth correlates to competency and good will, it seems the system will inevitably attract abuse (power corrupts).
et2o 11y ago
Inequality is a problem if inequality is restraining the total growth of society or limiting resources/services/goods that would potentially be available to you in a less unequal society.
- dragonwriter 11y ago
  Inequality is a problem because inequality is itself empirically shown to be a source of disutility, independent of those other concerns you raise. It may also be a problem for those other reasons, but that's not necessary for it to be a problem. (People often mistake output and consumption measures of typical economic statistics for direct measures of experienced utilities. While they are proxies for utility, they are imperfect proxies, and one of the ways we know they are flawed is that they do not account for the disutility that directly results from inequality.)
slv77 11y ago
I'd argue that inequality is part of the problem itself. Assume that I am a cobbler and enter into a network where capital is distributed widely. I borrow $200 dollars from 1000 people (mediated by a bank) and buy a home. The second network capital is concentrated and I borrow $100,000 dollar from two people (mediated by a bank) and buy a home. Now I need to pay that capital back, with intererest. I can only do that by making shoes for people. Which network am I going to have a harder time doing that in? The one with 1000 people who have $200 saved in the bank? Or the one that has 2 people who have $100,000 in the bank? Assume all people in the example have two feet.