9 ms·

Challenging the myth that the rich are specially-talented wealth creators

141 points by sjclemmy 10y ago

ghufran_syed 10y ago
Does "unjust and dysfunctional" = "u r a fag" [DH0]? http://paulgraham.com/disagree.html http://paulgraham.com/disagree.html Let me try and do a little better: I would argue that this kind of rhetoric is not significantly different from social movements in various countries of the 20th century, the end results were not quite as benign as its supporters anticipated: 'During the land reform, a significant numbers of landlords and well-to-do peasants were beaten to death at mass meetings organised by the Communist Party as land was taken from them and given to poorer peasants.[169] The Campaign to Suppress Counter-revolutionaries,[170] involved public executions that targeted mainly former Kuomintang officials, businessmen accused of "disturbing" the market, former employees of Western companies and intellectuals whose loyalty was suspect.[171] In 1976, the U.S. State department estimated as many as a million were killed in the land reform, and 800,000 killed in the counter-revolutionary campaign.[172] Mao himself claimed that a total of 700,000 people were killed in attacks on "counter-revolutionaries" during the years 1950–52.[173] However, because there was a policy to select "at least one landlord, and usually several, in virtually every village for public execution",[174] the number of deaths range between 2 million[174][175] and 5 million.[176][177] In addition, at least 1.5 million people,[178] perhaps as many as 4 to 6 million,[179] were sent to "reform through labour" camps where many perished.[179] Mao played a personal role in organizing the mass repressions and established a system of execution quotas,[180] which were often exceeded.[170] He defended these killings as necessary for the securing of power.[181]' [typo edited] https://en.m.wikipedia.org/wiki/Mao_Zedong https://en.m.wikipedia.org/wiki/Mao_Zedong
- anewhnaccount 10y ago
  Erm, how is "u r a red" any different?
- asuffield 10y ago
  Yes, it is precisely that. It's very easy to take shots at extremely rich people, because they won't bother to show up and defend themselves and nobody else will either. The main problem I have with this is that it's not very interesting and doesn't solve anything.
  - brador 10y ago
    Should extremely rich exist as a thing? What benefit does it bring humanity over the alternative?
    - ommunist 10y ago
      There is no 'humanity' when we talk about power and wealth. There are those who can do everything for power and there are those who cannot. 'Humanity' is abstract. Wealth and power are always attributed to certain individuals and are very often drectly inherited.
    - asuffield 10y ago
      That depends primarily on what alternative you are proposing. If you aren't discussing a specific alternative, then it's just the kind of unproductive sniping that I object to.
    - zanny 10y ago
      This is the primary problem with the discourse. People can agree pretty universally a tyrant, dictator, or emperor is a bad thing. You do not want heredity to determine power, and you do not want one individual to have violent dominance over anyone else, because you will often be the "anyone else" if you are not the aggressor. But that is about the only difference between how the modern gears of power operate versus how they did millennia ago. Rather than just kill your brothers and claim the throne and execute the dissidents and having your firstborn son inherit the crown from you, your children inherit ludicrous wealth that translates into the same power to buy the violent arm of the state for your own ends. Except now the peasantry cannot just storm the castle, behead the king, and replace him with another. There are kings from across the globe that control your society through its economy, and the present incumbents of radically concentrated power will argue everyone is king when they own wealth in the global capitalistic system. That, in practice, is pure deception[1], but you will have people by thousands at the bottom congregating to defend those off the chart, despite the ones at the top constantly using their power to harm all those below them. If we did have what the rich claim we do - democratized distributed power - we would need dramatically less wealth inequality, because that wealth, and the distribution of it, represents who has authority in the global capitalist economy. That is not an argument for socialism, communism, fascism, anything political. It is a reflection of tautological truths about having a global capitalistic market system that determines who is powerful by way of capital and fiat ownership, and that if you want to have a more democratic humanity you must first deal with the fact that money is power, and when power is aggregated into the hands of very few, you don't have democracy. We are not at the point to argue practicalities, or dogma, or anything else beyond understanding. What we need is just for near universal acknowledgement that this paradigm exists, is how the world operates today, and that you probably would want to do something about it because we can already universally agree we don't like tyrants, and that we should not like tyrants in any form they take, even the ones that are not immediately and obviously apparent to most. https://www.youtube.com/watch?v=QPKKQnijnsM https://www.youtube.com/watch?v=QPKKQnijnsM
- mac01021 10y ago
  > Does "unjust and dysfunctional" = "u r a fag"? I would say referring to a person or set of people as unjust is a little bit of a category error, like saying "gravity is purple". The correct thing is probably to chalk this up to lazy writing (it's not the only grammatical error in the piece) and interpret the author as actually meaning "A society or legal framework that allows rent seeking behavior is unjust and dysfunctional." If we can agree approximately on criteria for "justice" and "dysfunctionality" (probably involving fairness and sustainability in one way or another) then this is a claim that's amenable to rational discussion and debate, and maybe even a little bit testable empirically.
_yosefk 10y ago
TTIP is pushed by corporations, not individual rich people. A corporation will want that even if every one of its stockholders has a below-median wealth. More generally, organizations and people working for them will pursue their goals and these goals will be misaligned with the interests of the population at large even if nobody is involved whose net worth is particularly remarkable. If corporations are eliminated and most work is done by government agencies, then these new organizations simply become more shielded from all sorts of punishment from the population compared to corporations. The rising nominal wealth of the richest people since 2008 is largely a result of asset price inflation resulting from low interest rates; the wealthy person is not more wealthy, however, holding a more expensive stock if the dividends and the profits are about the same as they used to be when interest rates were higher and stocks were cheaper, in fact the wealthy person is largely worse off since risk-free income is gone. As to "unjust and dysfunctional"... aren't we all. At least a rich person can lose money in a variety of scenarios and can be intimidated by this possibility. A tenured academic pays no price whatever he does, so he's more scary that way. edit: I'm not saying people aren't responsible, just that many of those responsible aren't that rich, and even if you mandate a ceiling on wealth and income, guess what, people will still want to get things done (because you will have a mechanism making them want to, otherwise nothing gets done - of course you can very much choose that, too), and guess what, people will get "their" things done at your expense. In fact it's people who blame the rich who claim that people aren't responsible (their money/assets - the thing making them rich people on top of just "people" - is responsible.) I'm absolutely saying that people are responsible, and taking money from people will not solve very much. This is not to say that nothing can be done; jailing wealthy criminals is a good start. A great economist whom nobody will blame for excessive concern for the welfare of the wealthy who'll be glad to show you his list of things to do, but who's nonetheless not "Pikettian", is Dean Baker.
- eganist 10y ago
  > A tenured academic pays no price whatever he does, so he's more scary that way. ...well, with the exception of reputational damage, which has significant meaning to a lot of people in academic pursuits. There's also the low risk with any especially egregious matter that the tenured professor might lose that status. Some people value their money. Some people value their brand. Some people value their time. Some people value success. Anyone can be "intimidated by the possibility" of losing what they value, and all of those, among many others, are neither infinitely accessible nor perfectly sustainable.
11thEarlOfMar 10y ago
How does the title: "We need to challenge the myth that the rich are specially-talented wealth creators" Become: "The very rich are unjust and dysfunctional" ?
- sjclemmy 10y ago
  HN only allows less than 80 chars for the title. The LSE blog Twitter account gave it this title.
  - dang 10y ago
    Not a good title, though, because it's a cherry-picked quote selected for baitiness. Such things have a pronounced (and in this case dismal) effect on resulting discussion. Much better to shorten the original a bit, which we've done above. If it's necessary not to use the original (because it's misleading, linkbait, or impossible to shorten), the next best thing is to find an accurate, neutral phrase from the article. If you want to say what you think is important about an article, please do so in a comment rather than using the title to express that. Then your view is on a level playing field with everyone else's.
- dempseye 10y ago
  It's a quote directly out of the byline. It is also, according to the author, the main thesis of his new book. Is there some rule on here that the title of the submission must correspond exactly to the title of the linked article?
  - pohl 10y ago
    Yes, from the "Guidelines" link at the bottom of HN: Otherwise please use the original title, unless it is misleading or linkbait. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
xyzzy4 10y ago
Nearly all people, rich and poor, make decisions for personal gain.
- JoeAltmaier 10y ago
  Agreed. At some point, its important for the powerful to change their tactics. They often fail to adapt to their new power (that wealth brings). This is the reason for anti-trust laws, regulations on banks (which have been largely dismantled) etc. Because so few people rethink their motivations when their power to affect people goes from one-at-a-time (like most of us) to thousands and then millions of people. If they stay capricious and selfish then every whim, tantrum and greedy indulgence hurts society in ways they have failed to consider. Some few have made the transition, often at the urging of family.
- kingkawn 10y ago
  Yes but the basis of determining what is gain vs loss is not fixed into specific action sets and can be changed for the betterment of all.
- ommunist 10y ago
  Like Czarina Ekaterina said, oh I do not understand what is wrong if you have no bread, you can always eat some cookies.
nathan_f77 10y ago
What's the solution? I hear rants all the time, but no-one ever offers any concrete steps, or suggestions for new laws.
- philippnagel 10y ago
  Perhaps wealth re-distribution?
  - ommunist 10y ago
    Does not work, will create just another layer of very rich. Look at Russia after 1992.
    - physicalist 10y ago
      I don't see how russia proves anything. to me, what didn't work wasn't wealth redistribution, but planned economy. And planned economy has become mire viable since then, thanks to computers.
      - ommunist 10y ago
        Russia after 1992 made experiment in wealth redistribution within capitalist system restored. The resjlt was devastated economy and creation of oligarchs. Read 'The Iron Heel' by Jack London, this is what happened in Russia when it turned back to capitalism.
        physicalist 10y ago
        Russia made one big "mistake" after 1992: "privatizing" the public sector by "gifting" enterprises to friends of Yeltsin. You could of course call this redistribution of wealth, but that's not what anyone has in mind here.
        ommunist 10y ago
        @physicalist. Far from that. Apart from few friends of Yeltsin, there arose an entire new generation of speculators, benefited from 'voucher privatisation'. Technically it was very much literal public wealth redistribution.
swehner 10y ago
Got a 403, here's a copy, https://web.archive.org/web/20160227170731/http://blogs.lse.ac.uk/politicsandpolicy/we-need-to-challenge-the-myth-that-the-rich-are-specially-talented-wealth-creators/ https://web.archive.org/web/20160227170731/http://blogs.lse....
ommunist 10y ago
remember 1917 in Russia, and how much the SovietUnion did for the world and its nations until 1991, by just removing the rich and concentrating power with government, led by proper ideology. Stalin got the country of illiterate peasants with ploughs and left it with 100% literacy, and the nukes.
- skolos 10y ago
  I like good old propaganda. Looks like a citation from "Pravda".
  - ommunist 10y ago
    'Pravda' stands for 'The Truth'. If you have rich, there will be a lot of poor. Maintain the lifestyle when being rich is immoral, you have no poor, everyone has a job and the streets are safe. This is my impression of the USSR of the 80-ies.
    - ams6110 10y ago
      Did you live there?
      - ommunist 10y ago
        Yes, I graduated in 1988.
- sbuttgereit 10y ago
  And many millions of innocents dead.
  - ommunist 10y ago
    Hardly thousands. 240 000 people die every year in car accidents and no one prohibits cars. Millions died in WW2, but it is not the USSR to blame for it. How many Indians were killed for the US to prosper? We are speaking about fhe better system you never tried. No rich, no poor, everyone has a job.
11thEarlOfMar 10y ago
Part of the reasoning here is that rentiers are not contributing to wealth creation and therefore their earnings on the rent are parasitic, therefore 'unjust and dysfuctional': "Since it’s a payment for nothing that didn’t already exist, it’s a deadweight cost, and so not only unjust but also dysfunctional for the economy. " The practice of renting exists as an option to owning. By renting, renters can engage in an activity with less up front capital to buying. For example, a contractor building a concrete sidewalk may choose to rent the mixer rather than owning it, so that it's cost is a cost of sale for the service, rather than a fixed cost that requires maintenance, storage and transportation. In that sense, the rental is a component of a larger transaction involving actual work being performed, and not parasitic. Moreover, by offering the mixer for rent, the 'rentier' reduces the total number of mixers that need to be produced, as it is a shared resource to contractors and they each do not need to own their own. The same principle pertains to business. A fast growing startup may know they only need a space for a short time and will grow out of it. So it would make no sense to purchase the property they will inhabit for a short time. The rent they pay is an alternative to mortgage or cash, and it makes sense for their business purposes, which in theory do produce something of value. In the example of home rental, making homes available for rent enables families to live in accommodations that they would not be able to purchase. These accommodations are not without cost to the owner: Taxes, utilities, maintenance, security and administration are all associated costs that rent payments offset. What the rentier provides in most cases, is a better quality of life than the family could have if they were forced to own the property they lived in.
- JoeAltmaier 10y ago
  There is a value to time that is often discounted in naïve valuations. Why is rent justified? Because using land for a day, and using it for a year have very different values. Its not just land that's being paid for; its land use over time. This raises its ugly head in discussions worldwide. Folks must come to understand that time is truly money.
- hueving 10y ago
  Unless subsidized or losing money, the rent is more than a mortgage payment would be. If we had low enough transaction costs it would be better if everyone just owned their homes via mortgage for even short time frames.
nxzero 10y ago
Very rich are just average people; meaning there's a mix of types of people that are very rich; aka billion or more. Feel like most people have never known anyone super rich or for that matter, very poor. Lastly, while it's true that there are more super wealth individuals than likely any point in history currently - the quality of life is also better on average too.
- jonknee 10y ago
  > Very rich are just average people; meaning there's a mix of types of people that are very rich; aka billion or more. Being very rich is by definition not being average. There are ~1,800 billionaires in the world and none are average.
  - nxzero 10y ago
    I see, then what by definition is an average person?
    - ommunist 10y ago
      Joe the Schmoe, 15-75K USD per year in the 1st world. Barak the Schmack, 10-100 usd per month in the 3rd world. Surprisingly there is no more the 2nd world. since the USSR is no more and Ivan the Plan had no salary comparable to its monetary value, but a hell lot of social services he and his family used for free. Like free education for example.
      - nxzero 10y ago
        I see, the super rich have more money than the super poor; how obvious, no idea why I missed that. Any idea if there other differences, or are the super rich and very poor on average the same? If not how so? Also, might be worth noting if this is based on meeting people in the real world?
        ommunist 10y ago
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ageofwant 10y ago
Being separated from other people causes brain damage. This truth works on many levels. https://www.reddit.com/r/AskReddit/comments/4lianf/whats_a_dead_giveaway_that_someone_has_come_from/ https://www.reddit.com/r/AskReddit/comments/4lianf/whats_a_d... Read through that reddit thread, can you relate ? Empathy certainly is a function of social distance. The very rich are very distant, have very little empathy, and are therefore mentally ill.
- ommunist 10y ago
  No, they are OK. They just have other problems, not another scale like 'I do not have 100K to close my mortgage and that guy has no extra 2BN to buy that robotics facility in Korea'. They live in another dimension. It is called power, when they decide about values of your currencies for example - remember what Soros did to the sterling pound.
adwhit 10y ago
HN tends to be extremely reactionary to posts like this. Perhaps because the tech/startup scene is all about getting rich quick, or perhaps because HN has come to partially reflect the personal views of PG. There will be a reckoning. The world is 'unsustainably unequal' at the moment. There are huge problems on the horizon - superbugs, climate change, resource depletion, environmental degradation, overpopulation. These problems can only be solved when governments act in the interests of all of humankind. This will not happen when the 1% hold all the money and all the power (which is the same thing). I hope we can reign in the rentiering, tax-avoiding, propaganda-publishing rich and reclaim democracy before Something Bad happens. Otherwise, when the SHTF, the 1% will deservedly shoulder all the blame. And that will be the reckoning.
- mbfg 10y ago
  i understand your sentiment here, and in the view of history this is true. The problem is that now, or very soon, we are/will be in a state where the 1% can easily put down the 99% politically, socially, financially and yes militarily. So there may be a reckoning at some point. But it will and badly for the 99%. This was mostly true throughout history as well, it's just become a more certainty now.
  - praptak 10y ago
    "I can hire one half of the working class to kill the other half."
    - futureiswithus 10y ago
      We can boycott the rich. And when we cant, we can just choose to buy from the least rich
      - ommunist 10y ago
        Try. Boycot banks by giving them no money, maintain social lending in your local area, see what happen then.
      - 10y ago
oconnor663 10y ago
> If you buy some shares in M&S or BP on the stock market, the money you pay goes to the previous owner, not the company. You are what Keynes called a ‘functionless investor.’ When such so-called ‘investments’ pay off they extract wealth from the economy without creating anything in return. This doesn't seem very coherent. How could a company ever sell stock to raise capital, if the people who bought that stock didn't have a functioning market to resell it on? Obligatory link to Hans Rosling's economic play-by-play of the last 50 years: https://youtu.be/hVimVzgtD6w?t=4m12s https://youtu.be/hVimVzgtD6w?t=4m12s
- EliRivers 10y ago
  How could a company ever sell stock to raise capital, if the people who bought that stock didn't have a functioning market to resell it on? It could be a lifetime or time-limited right to a dividend, with voting rights attached. This would prioritise sustainable profit generation with a long-term view, and eliminate the current malaise of seeking short-term spikes in share price.
  - jonknee 10y ago
    ... And it would further concentrate global wealth into the hands of a few (after you're no longer getting the dividends where do you think they'll go?).
    - EliRivers 10y ago
      Given that there are no owners, to the employees seems reasonable. With shares eliminated like this, we can have a such a system. Perhaps through some kind of all employee profit sharing system that all the employees agree on. Alternatively, if there has to be ownership, ownership of the company can be split between all employees, and the profits shared amongst them accordingly. I should divulge that by HN standards I am a screaming commie. I think unions are a good idea, and I think inheritance tax should be pretty much 100%. I'm not necessarily in favour of this employee-owners profit redistribution system, but it's an answer to the question of where profits should go if there are no rentier shareholders.
lumberjack 10y ago
Honestly, I do not even care about how "fair" the wealth distribution is. They have their billions. All I want is some job security. I think most average people feel the same way.
- vlunkr 10y ago
  My feelings exactly. Just because they have an outrageous amount of money doesn't mean there isn't enough for me.
known 10y ago
http://www.monbiot.com/2011/11/07/the-self-attribution-fallacy http://www.monbiot.com/2011/11/07/the-self-attribution-falla...
mtrn 10y ago
From a developer perspective many aspects of the current system (with respect to resource usage and allocation) look like technical debt. Governments may try to make ends meet with limited budgets and come up with sometimes nonsensical or just not really thought out solutions to problems. Meanwhile the world learns about the Panama papers and related things, getting the impression, that not everybody is happy with contributing back to the community at large. The simple minded software developers solution would be to radically cut out the cruft (complex laws and tax systems) and implement a simplified version, that would be harder to game and easier to debug.
- physicalist 10y ago
  ...but in the world of software, everyone wants programs that work better. The very rich have no short term interest in a system that's hard to game. Therefore they're going to use their considerable influence to prevent just that.
  - picklesman 10y ago
    Well, I've seen some cases of developers keeping things complex for their own self-interest, e.g. "Job Security". You could make a similar analogy here...
  - ommunist 10y ago
    You probably are talking about some alternative Universe. In this world programs are made to make certain shareholders rich by exploiting certain markets. Including creation of encapsulated artificial markets with maintaining artificial needs, Facebook being the good example.
tokenadult 10y ago
The important point to notice here (I have seen comments previously posted that talk about the "1 percent") is that a middle-class American and people in other countries with similar levels of prosperity is very close to the world 1 percent level of income and of wealth. The simple fact of the matter is that today's "average" people in developed countries are staggeringly rich compared to most of human experience for most of history. https://www.gapminder.org/videos/dont-panic-end-poverty/ https://www.gapminder.org/videos/dont-panic-end-poverty/
api 10y ago
So they're just like everyone else?
hahagavkdr 10y ago
"I know more about how you should spend your money than you do"
nickpsecurity 10y ago
My theory is it's a cartel of cartels. It was always a possibility given all the markets naturally seem to develop oligopolies and shift to cartel-like behavior. Buying off politicians to protect profit or market share was also common. So, what happened is that they started acting collectively for whatever interests them. They still compete or argue for other things but certain laws and trends are valuable for all rich capitalists. Project Censored published a great report that surveys many of the organizations, their boards, and so on. First report whose theory is very similar to my own research. http://projectcensored.org/the-global-1-exposing-the-transnational-ruling-class/ http://projectcensored.org/the-global-1-exposing-the-transna... As you can see, the boards have considerable overlap where people who appear to be competing in one sector are working together in another. There's also a clear incentive, per doctrine of maximizing selfish gain, for board members and CEO's to all give each other ridiculously high compensation while driving it down for laborers. The reason: they can. Why else? So, it's a combination of corrupt politicians, elites at CEO/board level, and media whose boards work similarly. The worst part is that the media is critical to changing the situation but has financial incentive to avoid that ever happening. That's why they so deviously self-censor on these issues to the point Americans can't get mad enough about the specific problem to do something with specific solutions. Media never presents either. Instead, works on side issues or total distractions (esp shootings or celebs) that prevent threats to stability of plutocracy. EDIT: Given not everyone likes this source, I'd be interested in any similar data and analysis from academics published in a peer-reviewed journal. No paywalls, though. Can't fight elitism with more elitism. ;)
- ommunist 10y ago
  I am giving you the important data point. 2010. Lady Barbara Judge in Astana. 2015 UK is building 5 new nuclear power stations, and public is generally unaware of the fact.
  - nickpsecurity 10y ago
    Her background is like a whose-who of scheming companies and groups. She was apparently pretty effective, too. Not that great an example, though, given people only care about nuclear so much. Our best example in recent times is still 2008. In this case, the elites crash the whole system, get paid off for it, and get criminal immunity. This kind of event and resulting deal should be non-existent in a democracy. Whereas, in Iceland, they overthrew the dirty politicians, jailed them, jailed the bankers involved, seized banks, and reoriented their banks and news to prevent such things in future. Healthy democracy in action. The media's role in keeping elite's schemes going is pivotal. I think the strategy has to be on them. Anyone doing a revolution should hit the media rather than just the government. Make sure each side gets a say with reporters digging into root problems and potential solutions. People can then push for what they believe will work through regular, government structures. They can't act without being informed. So, corporate media is root problem here. Note: I've observed the same thing in Russia. Their media, at least RT, is even worse as it's basically a government spokespiece. Ours still compete with each other with at least several calling out government in big ways without anyone getting shot. The times they self-censor and are pervasively corrupt are protecting capitalist class that funds them. So, huge problem, but enough media protection here to maybe accomplish something. I'm more worried for Russians given Putin's recent laws on bloggers, etc plus risk journalists face in general.
onetimeusename 10y ago
There are a few things I disagree with. 1) Income from rent is not unearned. The reason it is called unearned is because nothing new was created. However, many services are this way. For example, fees paid to lawyers, or insurance fees and so on. Income earned from rent is income that comes from providing a service which is shelter or land for other uses. 2) Investment income is not parasitic. A share is a portion of a company. If someone buys a share, they are buying into ownership at a price they think is worthwhile. The prices of the shares are largely based on the value of the company. The value of a company can continue to go up and so profits come from the company being more valuable, not parasitically. Also, many shares provide dividends which is income and the right to vote. 3) It doesn't make any sense to me that rentiers free ride on the labour of others. Do they not have to pay for the goods and services they use?
- nickpsecurity 10y ago
  " The prices of the shares are largely based on the value of the company. " The perceived value of the company you mean. This site regularly discusses companies that make almost nothing with huge valuations. Like with shares, once they're sold they generally benefit a few financially who play the game yet again. Very little is created in the process. Whereas, the instances that have capitalists investing into new businesses or expansions in old ones do typically create some value for the economy. The capitalists also stand to make money, too. World of difference.
- jsprogrammer 10y ago
  Shelter and land are not a service but a physical resource.
  - ommunist 10y ago
    Your ATF in your muscle cells is not a service but physical resource. But what if its release molecular mechanics will be patented? Shall you pay for your every muscular contraction to a patent holder? I do not stop to fascinate about the very concept of owning the land. How can you own something that preexisted the monkey your ancestors originated from? The answer to this question is the key to understand what are the super rich and why you are living in the city.
morgante 10y ago
This is a rather poor article. In particular, it seems to imply that the wealthy are inherently rentiers. By the logic of this article, virtually all investors are "functionless investors" since they are not directly investing in a business by buying shares from the business. Of course, this neglects the fact that having a market for shares is in fact necessary for anyone to buy shares in the first place. Also, it would be nice to have a definition of how exactly the wealthy are "dysfunctional." They seem to be pretty functional at accumulating wealth. But they're also pretty functional at expanding and building a wealthy society—Apple made Steve Jobs very rich, but it also made all of us a little wealthier as well. As for justice, today's rich are more meritocratic than any in the past.
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pjdemers 10y ago
About "rent seeking" and "passive income": Everybody gets old. Technology companies don't hire the old. And in technology, old is > 45. Which isn't that old given that my life expectancy is about 85. So, darn right I'm "rent seeking". And I save like mad so I can generate "passive income". I assume that I will be pushed out of the workforce very soon - and I don't want to live on welfare for 40 years. Nor do I want to be restocking the shelves at Target when I'm 80.
ommunist 10y ago
No problem with that. Its a system. Rich stays rich, poor stays poor. Exceptions only proves the validity of this general rule. http://www.spiegel.de/static/happ/_pattern/story/foundation/v2/pub/j65309.html http://www.spiegel.de/static/happ/_pattern/story/foundation/... My favourite joke about 'How you managed to become a millionaire' has a morale that power and wealth is always inherited. Gates maybe a 'self-made' multibillionaire, but his very functioning in this quality only makes "rich stays rich" principle to stand. I would be fascinated would Gates finance social revolution in Mexico, to make people there less poor. Will never happen, because once you rich, you support agenda of the rich.
- ArkyBeagle 10y ago
  But wouldn't be irresponsible hubris for Gates to meddle in Mexico? It was when William Randolph Hearst meddled in Mexico. If "social revolution in Mexico" looks like "social revolution in Egypt" then I fail to see a probable upside.
  - ommunist 10y ago
    ok, call it 'social rearrangement'. Lets make Mexico more democratic, give more power to people, protect elections, and give basic income to every Mexican. Gates's money is more than enough to provide basic income to 10 generations of mexican people. Will never happen though.
    - ArkyBeagle 10y ago
      I happen to work with someone who is still a citizen of Mexico living in the US ( there is family land in Mexico and he can't keep it and be a US citizen ) , and according to him, it's extremely complicated. The big complicating factor is probably the US War on Drugs. But he has stories - like his brother fixed up a car nicely. There's a tax on that, and the car was simply taken, and his brother was taken to jail. If you slosh money around in Mexico, chances are that somebody will take it upon themselves to collect it for themselves. All this being said, Mexico itself seems to be slowly becoming less poor over time. They are, ironically, starting to have problems with people from Central and South America, both criminals an ostensibly non-criminals.
wtbob 10y ago
> If you buy some shares in M&S or BP on the stock market, the money you pay goes to the previous owner, not the company. You are what Keynes called a ‘functionless investor.’ When such so-called ‘investments’ pay off they extract wealth from the economy without creating anything in return. Ummm, no: when you pay off the previous owner you reimburse him for the risk he took. What's this guy's solution — not allowing folks to sell their assets? That seems a bit extreme, and liable to destroy the economy utterly.

141 points by sjclemmy 10y ago

Does "unjust and dysfunctional" = "u r a fag" [DH0]? http://paulgraham.com/disagree.html http://paulgraham.com/disagree.html Let me try and do a little better: I would argue that this kind of rhetoric is not significantly different from social movements in various countries of the 20th century, the end results were not quite as benign as its supporters anticipated: 'During the land reform, a significant numbers of landlords and well-to-do peasants were beaten to death at mass meetings organised by the Communist Party as land was taken from them and given to poorer peasants.[169] The Campaign to Suppress Counter-revolutionaries,[170] involved public executions that targeted mainly former Kuomintang officials, businessmen accused of "disturbing" the market, former employees of Western companies and intellectuals whose loyalty was suspect.[171] In 1976, the U.S. State department estimated as many as a million were killed in the land reform, and 800,000 killed in the counter-revolutionary campaign.[172] Mao himself claimed that a total of 700,000 people were killed in attacks on "counter-revolutionaries" during the years 1950–52.[173] However, because there was a policy to select "at least one landlord, and usually several, in virtually every village for public execution",[174] the number of deaths range between 2 million[174][175] and 5 million.[176][177] In addition, at least 1.5 million people,[178] perhaps as many as 4 to 6 million,[179] were sent to "reform through labour" camps where many perished.[179] Mao played a personal role in organizing the mass repressions and established a system of execution quotas,[180] which were often exceeded.[170] He defended these killings as necessary for the securing of power.[181]' [typo edited] https://en.m.wikipedia.org/wiki/Mao_Zedong https://en.m.wikipedia.org/wiki/Mao_Zedong

anewhnaccount 10y ago
Erm, how is "u r a red" any different?
asuffield 10y ago
Yes, it is precisely that. It's very easy to take shots at extremely rich people, because they won't bother to show up and defend themselves and nobody else will either. The main problem I have with this is that it's not very interesting and doesn't solve anything.
- brador 10y ago
  Should extremely rich exist as a thing? What benefit does it bring humanity over the alternative?
  - ommunist 10y ago
    There is no 'humanity' when we talk about power and wealth. There are those who can do everything for power and there are those who cannot. 'Humanity' is abstract. Wealth and power are always attributed to certain individuals and are very often drectly inherited.
  - asuffield 10y ago
    That depends primarily on what alternative you are proposing. If you aren't discussing a specific alternative, then it's just the kind of unproductive sniping that I object to.
  - zanny 10y ago
    This is the primary problem with the discourse. People can agree pretty universally a tyrant, dictator, or emperor is a bad thing. You do not want heredity to determine power, and you do not want one individual to have violent dominance over anyone else, because you will often be the "anyone else" if you are not the aggressor. But that is about the only difference between how the modern gears of power operate versus how they did millennia ago. Rather than just kill your brothers and claim the throne and execute the dissidents and having your firstborn son inherit the crown from you, your children inherit ludicrous wealth that translates into the same power to buy the violent arm of the state for your own ends. Except now the peasantry cannot just storm the castle, behead the king, and replace him with another. There are kings from across the globe that control your society through its economy, and the present incumbents of radically concentrated power will argue everyone is king when they own wealth in the global capitalistic system. That, in practice, is pure deception[1], but you will have people by thousands at the bottom congregating to defend those off the chart, despite the ones at the top constantly using their power to harm all those below them. If we did have what the rich claim we do - democratized distributed power - we would need dramatically less wealth inequality, because that wealth, and the distribution of it, represents who has authority in the global capitalist economy. That is not an argument for socialism, communism, fascism, anything political. It is a reflection of tautological truths about having a global capitalistic market system that determines who is powerful by way of capital and fiat ownership, and that if you want to have a more democratic humanity you must first deal with the fact that money is power, and when power is aggregated into the hands of very few, you don't have democracy. We are not at the point to argue practicalities, or dogma, or anything else beyond understanding. What we need is just for near universal acknowledgement that this paradigm exists, is how the world operates today, and that you probably would want to do something about it because we can already universally agree we don't like tyrants, and that we should not like tyrants in any form they take, even the ones that are not immediately and obviously apparent to most. https://www.youtube.com/watch?v=QPKKQnijnsM https://www.youtube.com/watch?v=QPKKQnijnsM
mac01021 10y ago
> Does "unjust and dysfunctional" = "u r a fag"? I would say referring to a person or set of people as unjust is a little bit of a category error, like saying "gravity is purple". The correct thing is probably to chalk this up to lazy writing (it's not the only grammatical error in the piece) and interpret the author as actually meaning "A society or legal framework that allows rent seeking behavior is unjust and dysfunctional." If we can agree approximately on criteria for "justice" and "dysfunctionality" (probably involving fairness and sustainability in one way or another) then this is a claim that's amenable to rational discussion and debate, and maybe even a little bit testable empirically.

_yosefk 10y ago

TTIP is pushed by corporations, not individual rich people. A corporation will want that even if every one of its stockholders has a below-median wealth. More generally, organizations and people working for them will pursue their goals and these goals will be misaligned with the interests of the population at large even if nobody is involved whose net worth is particularly remarkable. If corporations are eliminated and most work is done by government agencies, then these new organizations simply become more shielded from all sorts of punishment from the population compared to corporations. The rising nominal wealth of the richest people since 2008 is largely a result of asset price inflation resulting from low interest rates; the wealthy person is not more wealthy, however, holding a more expensive stock if the dividends and the profits are about the same as they used to be when interest rates were higher and stocks were cheaper, in fact the wealthy person is largely worse off since risk-free income is gone. As to "unjust and dysfunctional"... aren't we all. At least a rich person can lose money in a variety of scenarios and can be intimidated by this possibility. A tenured academic pays no price whatever he does, so he's more scary that way. edit: I'm not saying people aren't responsible, just that many of those responsible aren't that rich, and even if you mandate a ceiling on wealth and income, guess what, people will still want to get things done (because you will have a mechanism making them want to, otherwise nothing gets done - of course you can very much choose that, too), and guess what, people will get "their" things done at your expense. In fact it's people who blame the rich who claim that people aren't responsible (their money/assets - the thing making them rich people on top of just "people" - is responsible.) I'm absolutely saying that people are responsible, and taking money from people will not solve very much. This is not to say that nothing can be done; jailing wealthy criminals is a good start. A great economist whom nobody will blame for excessive concern for the welfare of the wealthy who'll be glad to show you his list of things to do, but who's nonetheless not "Pikettian", is Dean Baker.

eganist 10y ago
> A tenured academic pays no price whatever he does, so he's more scary that way. ...well, with the exception of reputational damage, which has significant meaning to a lot of people in academic pursuits. There's also the low risk with any especially egregious matter that the tenured professor might lose that status. Some people value their money. Some people value their brand. Some people value their time. Some people value success. Anyone can be "intimidated by the possibility" of losing what they value, and all of those, among many others, are neither infinitely accessible nor perfectly sustainable.

11thEarlOfMar 10y ago

How does the title: "We need to challenge the myth that the rich are specially-talented wealth creators" Become: "The very rich are unjust and dysfunctional" ?

sjclemmy 10y ago
HN only allows less than 80 chars for the title. The LSE blog Twitter account gave it this title.
- dang 10y ago
  Not a good title, though, because it's a cherry-picked quote selected for baitiness. Such things have a pronounced (and in this case dismal) effect on resulting discussion. Much better to shorten the original a bit, which we've done above. If it's necessary not to use the original (because it's misleading, linkbait, or impossible to shorten), the next best thing is to find an accurate, neutral phrase from the article. If you want to say what you think is important about an article, please do so in a comment rather than using the title to express that. Then your view is on a level playing field with everyone else's.
dempseye 10y ago
It's a quote directly out of the byline. It is also, according to the author, the main thesis of his new book. Is there some rule on here that the title of the submission must correspond exactly to the title of the linked article?
- pohl 10y ago
  Yes, from the "Guidelines" link at the bottom of HN: Otherwise please use the original title, unless it is misleading or linkbait. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

xyzzy4 10y ago

Nearly all people, rich and poor, make decisions for personal gain.

JoeAltmaier 10y ago
Agreed. At some point, its important for the powerful to change their tactics. They often fail to adapt to their new power (that wealth brings). This is the reason for anti-trust laws, regulations on banks (which have been largely dismantled) etc. Because so few people rethink their motivations when their power to affect people goes from one-at-a-time (like most of us) to thousands and then millions of people. If they stay capricious and selfish then every whim, tantrum and greedy indulgence hurts society in ways they have failed to consider. Some few have made the transition, often at the urging of family.
kingkawn 10y ago
Yes but the basis of determining what is gain vs loss is not fixed into specific action sets and can be changed for the betterment of all.
ommunist 10y ago
Like Czarina Ekaterina said, oh I do not understand what is wrong if you have no bread, you can always eat some cookies.

nathan_f77 10y ago

What's the solution? I hear rants all the time, but no-one ever offers any concrete steps, or suggestions for new laws.

philippnagel 10y ago
Perhaps wealth re-distribution?
- ommunist 10y ago
  Does not work, will create just another layer of very rich. Look at Russia after 1992.
  - physicalist 10y ago
    I don't see how russia proves anything. to me, what didn't work wasn't wealth redistribution, but planned economy. And planned economy has become mire viable since then, thanks to computers.
    - ommunist 10y ago
      Russia after 1992 made experiment in wealth redistribution within capitalist system restored. The resjlt was devastated economy and creation of oligarchs. Read 'The Iron Heel' by Jack London, this is what happened in Russia when it turned back to capitalism.
      - physicalist 10y ago
        Russia made one big "mistake" after 1992: "privatizing" the public sector by "gifting" enterprises to friends of Yeltsin. You could of course call this redistribution of wealth, but that's not what anyone has in mind here.
      - ommunist 10y ago
        @physicalist. Far from that. Apart from few friends of Yeltsin, there arose an entire new generation of speculators, benefited from 'voucher privatisation'. Technically it was very much literal public wealth redistribution.

swehner 10y ago

Got a 403, here's a copy, https://web.archive.org/web/20160227170731/http://blogs.lse.ac.uk/politicsandpolicy/we-need-to-challenge-the-myth-that-the-rich-are-specially-talented-wealth-creators/ https://web.archive.org/web/20160227170731/http://blogs.lse....

ommunist 10y ago

remember 1917 in Russia, and how much the SovietUnion did for the world and its nations until 1991, by just removing the rich and concentrating power with government, led by proper ideology. Stalin got the country of illiterate peasants with ploughs and left it with 100% literacy, and the nukes.

skolos 10y ago
I like good old propaganda. Looks like a citation from "Pravda".
- ommunist 10y ago
  'Pravda' stands for 'The Truth'. If you have rich, there will be a lot of poor. Maintain the lifestyle when being rich is immoral, you have no poor, everyone has a job and the streets are safe. This is my impression of the USSR of the 80-ies.
  - ams6110 10y ago
    Did you live there?
    - ommunist 10y ago
      Yes, I graduated in 1988.
sbuttgereit 10y ago
And many millions of innocents dead.
- ommunist 10y ago
  Hardly thousands. 240 000 people die every year in car accidents and no one prohibits cars. Millions died in WW2, but it is not the USSR to blame for it. How many Indians were killed for the US to prosper? We are speaking about fhe better system you never tried. No rich, no poor, everyone has a job.

11thEarlOfMar 10y ago

Part of the reasoning here is that rentiers are not contributing to wealth creation and therefore their earnings on the rent are parasitic, therefore 'unjust and dysfuctional': "Since it’s a payment for nothing that didn’t already exist, it’s a deadweight cost, and so not only unjust but also dysfunctional for the economy. " The practice of renting exists as an option to owning. By renting, renters can engage in an activity with less up front capital to buying. For example, a contractor building a concrete sidewalk may choose to rent the mixer rather than owning it, so that it's cost is a cost of sale for the service, rather than a fixed cost that requires maintenance, storage and transportation. In that sense, the rental is a component of a larger transaction involving actual work being performed, and not parasitic. Moreover, by offering the mixer for rent, the 'rentier' reduces the total number of mixers that need to be produced, as it is a shared resource to contractors and they each do not need to own their own. The same principle pertains to business. A fast growing startup may know they only need a space for a short time and will grow out of it. So it would make no sense to purchase the property they will inhabit for a short time. The rent they pay is an alternative to mortgage or cash, and it makes sense for their business purposes, which in theory do produce something of value. In the example of home rental, making homes available for rent enables families to live in accommodations that they would not be able to purchase. These accommodations are not without cost to the owner: Taxes, utilities, maintenance, security and administration are all associated costs that rent payments offset. What the rentier provides in most cases, is a better quality of life than the family could have if they were forced to own the property they lived in.

JoeAltmaier 10y ago
There is a value to time that is often discounted in naïve valuations. Why is rent justified? Because using land for a day, and using it for a year have very different values. Its not just land that's being paid for; its land use over time. This raises its ugly head in discussions worldwide. Folks must come to understand that time is truly money.
hueving 10y ago
Unless subsidized or losing money, the rent is more than a mortgage payment would be. If we had low enough transaction costs it would be better if everyone just owned their homes via mortgage for even short time frames.

nxzero 10y ago

Very rich are just average people; meaning there's a mix of types of people that are very rich; aka billion or more. Feel like most people have never known anyone super rich or for that matter, very poor. Lastly, while it's true that there are more super wealth individuals than likely any point in history currently - the quality of life is also better on average too.

jonknee 10y ago
> Very rich are just average people; meaning there's a mix of types of people that are very rich; aka billion or more. Being very rich is by definition not being average. There are ~1,800 billionaires in the world and none are average.
- nxzero 10y ago
  I see, then what by definition is an average person?
  - ommunist 10y ago
    Joe the Schmoe, 15-75K USD per year in the 1st world. Barak the Schmack, 10-100 usd per month in the 3rd world. Surprisingly there is no more the 2nd world. since the USSR is no more and Ivan the Plan had no salary comparable to its monetary value, but a hell lot of social services he and his family used for free. Like free education for example.
    - nxzero 10y ago
      I see, the super rich have more money than the super poor; how obvious, no idea why I missed that. Any idea if there other differences, or are the super rich and very poor on average the same? If not how so? Also, might be worth noting if this is based on meeting people in the real world?
      - ommunist 10y ago

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ageofwant 10y ago

Being separated from other people causes brain damage. This truth works on many levels. https://www.reddit.com/r/AskReddit/comments/4lianf/whats_a_dead_giveaway_that_someone_has_come_from/ https://www.reddit.com/r/AskReddit/comments/4lianf/whats_a_d... Read through that reddit thread, can you relate ? Empathy certainly is a function of social distance. The very rich are very distant, have very little empathy, and are therefore mentally ill.

ommunist 10y ago
No, they are OK. They just have other problems, not another scale like 'I do not have 100K to close my mortgage and that guy has no extra 2BN to buy that robotics facility in Korea'. They live in another dimension. It is called power, when they decide about values of your currencies for example - remember what Soros did to the sterling pound.

adwhit 10y ago

HN tends to be extremely reactionary to posts like this. Perhaps because the tech/startup scene is all about getting rich quick, or perhaps because HN has come to partially reflect the personal views of PG. There will be a reckoning. The world is 'unsustainably unequal' at the moment. There are huge problems on the horizon - superbugs, climate change, resource depletion, environmental degradation, overpopulation. These problems can only be solved when governments act in the interests of all of humankind. This will not happen when the 1% hold all the money and all the power (which is the same thing). I hope we can reign in the rentiering, tax-avoiding, propaganda-publishing rich and reclaim democracy before Something Bad happens. Otherwise, when the SHTF, the 1% will deservedly shoulder all the blame. And that will be the reckoning.

mbfg 10y ago
i understand your sentiment here, and in the view of history this is true. The problem is that now, or very soon, we are/will be in a state where the 1% can easily put down the 99% politically, socially, financially and yes militarily. So there may be a reckoning at some point. But it will and badly for the 99%. This was mostly true throughout history as well, it's just become a more certainty now.
- praptak 10y ago
  "I can hire one half of the working class to kill the other half."
  - futureiswithus 10y ago
    We can boycott the rich. And when we cant, we can just choose to buy from the least rich
    - ommunist 10y ago
      Try. Boycot banks by giving them no money, maintain social lending in your local area, see what happen then.
    - 10y ago

oconnor663 10y ago

> If you buy some shares in M&S or BP on the stock market, the money you pay goes to the previous owner, not the company. You are what Keynes called a ‘functionless investor.’ When such so-called ‘investments’ pay off they extract wealth from the economy without creating anything in return. This doesn't seem very coherent. How could a company ever sell stock to raise capital, if the people who bought that stock didn't have a functioning market to resell it on? Obligatory link to Hans Rosling's economic play-by-play of the last 50 years: https://youtu.be/hVimVzgtD6w?t=4m12s https://youtu.be/hVimVzgtD6w?t=4m12s

EliRivers 10y ago
How could a company ever sell stock to raise capital, if the people who bought that stock didn't have a functioning market to resell it on? It could be a lifetime or time-limited right to a dividend, with voting rights attached. This would prioritise sustainable profit generation with a long-term view, and eliminate the current malaise of seeking short-term spikes in share price.
- jonknee 10y ago
  ... And it would further concentrate global wealth into the hands of a few (after you're no longer getting the dividends where do you think they'll go?).
  - EliRivers 10y ago
    Given that there are no owners, to the employees seems reasonable. With shares eliminated like this, we can have a such a system. Perhaps through some kind of all employee profit sharing system that all the employees agree on. Alternatively, if there has to be ownership, ownership of the company can be split between all employees, and the profits shared amongst them accordingly. I should divulge that by HN standards I am a screaming commie. I think unions are a good idea, and I think inheritance tax should be pretty much 100%. I'm not necessarily in favour of this employee-owners profit redistribution system, but it's an answer to the question of where profits should go if there are no rentier shareholders.

lumberjack 10y ago

Honestly, I do not even care about how "fair" the wealth distribution is. They have their billions. All I want is some job security. I think most average people feel the same way.

vlunkr 10y ago
My feelings exactly. Just because they have an outrageous amount of money doesn't mean there isn't enough for me.

known 10y ago

http://www.monbiot.com/2011/11/07/the-self-attribution-fallacy http://www.monbiot.com/2011/11/07/the-self-attribution-falla...

mtrn 10y ago

From a developer perspective many aspects of the current system (with respect to resource usage and allocation) look like technical debt. Governments may try to make ends meet with limited budgets and come up with sometimes nonsensical or just not really thought out solutions to problems. Meanwhile the world learns about the Panama papers and related things, getting the impression, that not everybody is happy with contributing back to the community at large. The simple minded software developers solution would be to radically cut out the cruft (complex laws and tax systems) and implement a simplified version, that would be harder to game and easier to debug.

physicalist 10y ago
...but in the world of software, everyone wants programs that work better. The very rich have no short term interest in a system that's hard to game. Therefore they're going to use their considerable influence to prevent just that.
- picklesman 10y ago
  Well, I've seen some cases of developers keeping things complex for their own self-interest, e.g. "Job Security". You could make a similar analogy here...
- ommunist 10y ago
  You probably are talking about some alternative Universe. In this world programs are made to make certain shareholders rich by exploiting certain markets. Including creation of encapsulated artificial markets with maintaining artificial needs, Facebook being the good example.

tokenadult 10y ago

The important point to notice here (I have seen comments previously posted that talk about the "1 percent") is that a middle-class American and people in other countries with similar levels of prosperity is very close to the world 1 percent level of income and of wealth. The simple fact of the matter is that today's "average" people in developed countries are staggeringly rich compared to most of human experience for most of history. https://www.gapminder.org/videos/dont-panic-end-poverty/ https://www.gapminder.org/videos/dont-panic-end-poverty/

api 10y ago

So they're just like everyone else?

hahagavkdr 10y ago

"I know more about how you should spend your money than you do"

nickpsecurity 10y ago

My theory is it's a cartel of cartels. It was always a possibility given all the markets naturally seem to develop oligopolies and shift to cartel-like behavior. Buying off politicians to protect profit or market share was also common. So, what happened is that they started acting collectively for whatever interests them. They still compete or argue for other things but certain laws and trends are valuable for all rich capitalists. Project Censored published a great report that surveys many of the organizations, their boards, and so on. First report whose theory is very similar to my own research. http://projectcensored.org/the-global-1-exposing-the-transnational-ruling-class/ http://projectcensored.org/the-global-1-exposing-the-transna... As you can see, the boards have considerable overlap where people who appear to be competing in one sector are working together in another. There's also a clear incentive, per doctrine of maximizing selfish gain, for board members and CEO's to all give each other ridiculously high compensation while driving it down for laborers. The reason: they can. Why else? So, it's a combination of corrupt politicians, elites at CEO/board level, and media whose boards work similarly. The worst part is that the media is critical to changing the situation but has financial incentive to avoid that ever happening. That's why they so deviously self-censor on these issues to the point Americans can't get mad enough about the specific problem to do something with specific solutions. Media never presents either. Instead, works on side issues or total distractions (esp shootings or celebs) that prevent threats to stability of plutocracy. EDIT: Given not everyone likes this source, I'd be interested in any similar data and analysis from academics published in a peer-reviewed journal. No paywalls, though. Can't fight elitism with more elitism. ;)

ommunist 10y ago
I am giving you the important data point. 2010. Lady Barbara Judge in Astana. 2015 UK is building 5 new nuclear power stations, and public is generally unaware of the fact.
- nickpsecurity 10y ago
  Her background is like a whose-who of scheming companies and groups. She was apparently pretty effective, too. Not that great an example, though, given people only care about nuclear so much. Our best example in recent times is still 2008. In this case, the elites crash the whole system, get paid off for it, and get criminal immunity. This kind of event and resulting deal should be non-existent in a democracy. Whereas, in Iceland, they overthrew the dirty politicians, jailed them, jailed the bankers involved, seized banks, and reoriented their banks and news to prevent such things in future. Healthy democracy in action. The media's role in keeping elite's schemes going is pivotal. I think the strategy has to be on them. Anyone doing a revolution should hit the media rather than just the government. Make sure each side gets a say with reporters digging into root problems and potential solutions. People can then push for what they believe will work through regular, government structures. They can't act without being informed. So, corporate media is root problem here. Note: I've observed the same thing in Russia. Their media, at least RT, is even worse as it's basically a government spokespiece. Ours still compete with each other with at least several calling out government in big ways without anyone getting shot. The times they self-censor and are pervasively corrupt are protecting capitalist class that funds them. So, huge problem, but enough media protection here to maybe accomplish something. I'm more worried for Russians given Putin's recent laws on bloggers, etc plus risk journalists face in general.

onetimeusename 10y ago

There are a few things I disagree with. 1) Income from rent is not unearned. The reason it is called unearned is because nothing new was created. However, many services are this way. For example, fees paid to lawyers, or insurance fees and so on. Income earned from rent is income that comes from providing a service which is shelter or land for other uses. 2) Investment income is not parasitic. A share is a portion of a company. If someone buys a share, they are buying into ownership at a price they think is worthwhile. The prices of the shares are largely based on the value of the company. The value of a company can continue to go up and so profits come from the company being more valuable, not parasitically. Also, many shares provide dividends which is income and the right to vote. 3) It doesn't make any sense to me that rentiers free ride on the labour of others. Do they not have to pay for the goods and services they use?

nickpsecurity 10y ago
" The prices of the shares are largely based on the value of the company. " The perceived value of the company you mean. This site regularly discusses companies that make almost nothing with huge valuations. Like with shares, once they're sold they generally benefit a few financially who play the game yet again. Very little is created in the process. Whereas, the instances that have capitalists investing into new businesses or expansions in old ones do typically create some value for the economy. The capitalists also stand to make money, too. World of difference.
jsprogrammer 10y ago
Shelter and land are not a service but a physical resource.
- ommunist 10y ago
  Your ATF in your muscle cells is not a service but physical resource. But what if its release molecular mechanics will be patented? Shall you pay for your every muscular contraction to a patent holder? I do not stop to fascinate about the very concept of owning the land. How can you own something that preexisted the monkey your ancestors originated from? The answer to this question is the key to understand what are the super rich and why you are living in the city.

morgante 10y ago

This is a rather poor article. In particular, it seems to imply that the wealthy are inherently rentiers. By the logic of this article, virtually all investors are "functionless investors" since they are not directly investing in a business by buying shares from the business. Of course, this neglects the fact that having a market for shares is in fact necessary for anyone to buy shares in the first place. Also, it would be nice to have a definition of how exactly the wealthy are "dysfunctional." They seem to be pretty functional at accumulating wealth. But they're also pretty functional at expanding and building a wealthy society—Apple made Steve Jobs very rich, but it also made all of us a little wealthier as well. As for justice, today's rich are more meritocratic than any in the past.

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pjdemers 10y ago

About "rent seeking" and "passive income": Everybody gets old. Technology companies don't hire the old. And in technology, old is > 45. Which isn't that old given that my life expectancy is about 85. So, darn right I'm "rent seeking". And I save like mad so I can generate "passive income". I assume that I will be pushed out of the workforce very soon - and I don't want to live on welfare for 40 years. Nor do I want to be restocking the shelves at Target when I'm 80.

ommunist 10y ago

No problem with that. Its a system. Rich stays rich, poor stays poor. Exceptions only proves the validity of this general rule. http://www.spiegel.de/static/happ/_pattern/story/foundation/v2/pub/j65309.html http://www.spiegel.de/static/happ/_pattern/story/foundation/... My favourite joke about 'How you managed to become a millionaire' has a morale that power and wealth is always inherited. Gates maybe a 'self-made' multibillionaire, but his very functioning in this quality only makes "rich stays rich" principle to stand. I would be fascinated would Gates finance social revolution in Mexico, to make people there less poor. Will never happen, because once you rich, you support agenda of the rich.

ArkyBeagle 10y ago
But wouldn't be irresponsible hubris for Gates to meddle in Mexico? It was when William Randolph Hearst meddled in Mexico. If "social revolution in Mexico" looks like "social revolution in Egypt" then I fail to see a probable upside.
- ommunist 10y ago
  ok, call it 'social rearrangement'. Lets make Mexico more democratic, give more power to people, protect elections, and give basic income to every Mexican. Gates's money is more than enough to provide basic income to 10 generations of mexican people. Will never happen though.
  - ArkyBeagle 10y ago
    I happen to work with someone who is still a citizen of Mexico living in the US ( there is family land in Mexico and he can't keep it and be a US citizen ) , and according to him, it's extremely complicated. The big complicating factor is probably the US War on Drugs. But he has stories - like his brother fixed up a car nicely. There's a tax on that, and the car was simply taken, and his brother was taken to jail. If you slosh money around in Mexico, chances are that somebody will take it upon themselves to collect it for themselves. All this being said, Mexico itself seems to be slowly becoming less poor over time. They are, ironically, starting to have problems with people from Central and South America, both criminals an ostensibly non-criminals.

wtbob 10y ago

> If you buy some shares in M&S or BP on the stock market, the money you pay goes to the previous owner, not the company. You are what Keynes called a ‘functionless investor.’ When such so-called ‘investments’ pay off they extract wealth from the economy without creating anything in return. Ummm, no: when you pay off the previous owner you reimburse him for the risk he took. What's this guy's solution — not allowing folks to sell their assets? That seems a bit extreme, and liable to destroy the economy utterly.