5 ms·

>I'd like to see a dialectic about why income inequality increasing is bad, in of itself. One main issue is that income inequality decreases socioeconomic mobi

by HillRat 10y ago

>I'd like to see a dialectic about why income inequality increasing is bad, in of itself. One main issue is that income inequality decreases socioeconomic mobility by inflating the cost of scarce goods that improve earnings capabilities. So 4K TVs are cheaper but college tuition becomes unaffordable, because good universities and grad programs are valuable, scarce goods that the wealthy can outbid everyone else on. Policies that aggressively expand capacity and defray costs, such as post-WW2 expansions of universities and the GI bill, can ameliorate this by shifting monies down the socioeconomic ladder via taxation, but high levels of inequality also lead to a powerful political interest group that generally seeks to reduce tax rates that affect them. There's also the more general economic argument that high levels of inequality are economically inefficient since they result in a lower average marginal propensity to consume, but that's not so much "bad" as "could be better and provide greater macro stability."

morgante 10y ago
> So 4K TVs are cheaper but college tuition becomes unaffordable, because good universities and grad programs are valuable, scarce goods that the wealthy can outbid everyone else on. Except that such goods are increasingly not priced via the market. If you're smart enough to get into an elite university, you don't have to worry about the cost. Full stop. That being said, I do think we have a societal responsibility to set things up so that this applies across the board. Personally, I think income inequality is fine and maybe even good if we can also have: 1) Basic income, so that even if your parents aren't wealthy you still have all the necessities. 2) Well-funded and high quality public education (from pre-K up through college) Personally, I actually think income inequality can make these things easier to achieve for 2 reasons: 1. Each individual dollar matters a lot less to billionaires, so they're a lot more willing to give away a huge percentage of their wealth. This trend is very evident with tech billionaires. If Warren Buffet had his wealth spread amongst millions of families, would each one be willing to give up 90% of that wealth? 2. The winnowing of the middle makes redistribution more palatable. A large part of current politics is moderately well-off people feeling morally superior to slightly less well-off people. If society becomes more bimodal, it's a lot more possible to pass aggressive redistribution policies.
- civilian 10y ago
  It's one thing when a billionaire gives away their money and are able to direct it at the charities they want. It's another thing when it's taxed and coordinated by the government. The United States government has the bias just as you showed-- to help the american people. But most of these tech billionaires recognize that it's imperative that we help all people, regardless of where they were born. It's why I'd rather give to GiveWell than to my local shelter.
  - morgante 10y ago
    Yes, I personally would prefer to redistribute internationally (and hence that's where all my personal donations go) but from conversations I've recognized that it's politically unpalatable to the vast majority of Americans. The vast majority of people somehow think that their fellow Americans are more deserving than the international poor (and will quite strenuously argue that things like having toys for local kids is more important than literally saving lives). The nice thing about our tax system is that you can write off donations. So even if we did adopt stronger tax measures, billionaires could still choose to support more effective causes than the government.
    - brianwawok 10y ago
      Except say you can donate to a nonprofit, write it off, and that non profit can pay your kid an inflated salary to sit on the board. Happening right now to a presidential candidate.
- vidarh 10y ago
  > If you're smart enough to get into an elite university, you don't have to worry about the cost. Full stop. This presupposes that you are already in a social position that allows your intelligence to be recognised and that puts you in a position to even apply, or know that applying is an option.
  - 150latefees 10y ago
    I cannot emphasize enough how true this is. Growing up as rural poor, it was an alien concept to me that there were tiers of colleges with different academic specializations. College was just a single monolithic concept to my people. If you were learned real good, and pass that big test, you could be admitted to college just like all those kids who lived closer to town. There was no difference in our minds between the community college 20 minutes away and the public university an hour and a half way. And once you get to the community college and shake off that fog, realize that college is a granular thing, then it is just all you can do to drag yourself up to that state university. Your family has no understanding at all why you would want to move to the state university. Its much further away, harder for you to help out, much more expensive. It just doesn't make any sense within their understanding of the world. Forget about an elite university, its been two years, and you are only now discovering calculus, formal logic, the scientific method. How will you ever compete with the hoards of whites who have been saturated in this world from the beginning?
cookiecaper 10y ago
>One main issue is that income inequality decreases socioeconomic mobility by inflating the cost of scarce goods that improve earnings capabilities. So 4K TVs are cheaper but college tuition becomes unaffordable, because good universities and grad programs are valuable, scarce goods that the wealthy can outbid everyone else on. Tuition rates didn't go through the roof until the government started guaranteeing/sponsoring tuition loans. When that happened, the colleges and banks knew they could charge whatever they wanted and still get paid, so tuition cost became detached from ability-to-pay, and there was no incentive to keep prices affordable anymore. The victim in this is the student, who gets saddled with decades of debt, or alternately, an eviscerated credit profile with an albatross that can't be discharged even in bankruptcy. That, however, is obviously not something that disturbs the educational system. Things go screwy fast when you decouple the classic economic checks and balances. While a small number of wealthy people would be both willing and able to afford outrageous rates for tuition, most of them would want a good value, and there's not enough fantastically-rich Americans to support something the size of the education system without drawing from the middle class for pupils.
- digi_owl 10y ago
  The sad part is that as with housing, the government is applying a demand side "solution" to a supply side problem. Education is expensive, because there is a limited capacity (teachers, facilities, etc). But rather than put money into expanding the capacity, they start offering stipends and loans. But this just inflate the prices. I wonder how much of the choice is because it is easier and quicker to show a results, thus it can be implemented within a single election term, and how much of it is straight graft.
dsacco 10y ago
In response to your main issue regarding socioeconomic mobility - why is this, in turn, a problem? If you can demonstrate that reduced social mobility is an issue, and that this is increased by progressively greater income inequality (the latter of which I probably agree with on cursory inspection), then it seems income inequality is a net loss. However, from a utilitarian perspective, I don't see a reason to care about social mobility if quality of life increases for everyone, not just the upper classes. Keep in mind that I am working on two axioms: 1. Income inequality is a mathematical certainty in a functional society with more than n participants, where n is the maximum number of people who can be personally and honestly cooperative with each other, and 2. Income inequality refers to differences in an individual's absolute resources available for consumption, not their quality of life (exceptions granted for luxury consumption goods, not basic utilities that are available across all social classes). As a very simplistic example that I'd enjoy having holes poked in, Apple has generated wondrous income inequality for many of its engineers and management. However, it has also leveraged economies of scale and competitive forces to manufacture a mass market product that is, statistically, enjoyed by even the poorest households in America and which affords its users with the most powerful innovation since the printing press in their pockets. EDIT: This comment has had a rapid change in up and down votes. It's fine to disagree with me, but I don't think it's unreasonable to question whether or not a lack of social mobility is actually a bad thing, as a Socratic baseline.
- phamilton 10y ago
  > In response to your main issue regarding socioeconomic mobility - why is this, in turn, a problem? It depends on the end goal. If the end goal is scientific advancement, for example, mobility into the educated and academic class is important to provide intellectual diversity. If we bifurcate society into the educated and uneducated, it would likely restrict the flow of new ideas and discovery.
- hx87 10y ago
  Low socioeconomic mobility is a problem because the potential for any individual to contribute to the good of society is at best loosely correlated with their previous socioeconomic status. If people who could have been top-notch scientists, engineers, civil servants and entrepreneurs were prevented from doing so because they couldn't move up the ladder (and inversely, rich rent-seekers couldn't move down), society is deprived of their contributions and is worse off. P.S.: The rapid change in up and down votes is probably caused more by your confusion of socioeconomic mobility and equality (you seem to be using the two interchangeably) than anything else.

by HillRat 10y ago

morgante 10y ago

> So 4K TVs are cheaper but college tuition becomes unaffordable, because good universities and grad programs are valuable, scarce goods that the wealthy can outbid everyone else on. Except that such goods are increasingly not priced via the market. If you're smart enough to get into an elite university, you don't have to worry about the cost. Full stop. That being said, I do think we have a societal responsibility to set things up so that this applies across the board. Personally, I think income inequality is fine and maybe even good if we can also have: 1) Basic income, so that even if your parents aren't wealthy you still have all the necessities. 2) Well-funded and high quality public education (from pre-K up through college) Personally, I actually think income inequality can make these things easier to achieve for 2 reasons: 1. Each individual dollar matters a lot less to billionaires, so they're a lot more willing to give away a huge percentage of their wealth. This trend is very evident with tech billionaires. If Warren Buffet had his wealth spread amongst millions of families, would each one be willing to give up 90% of that wealth? 2. The winnowing of the middle makes redistribution more palatable. A large part of current politics is moderately well-off people feeling morally superior to slightly less well-off people. If society becomes more bimodal, it's a lot more possible to pass aggressive redistribution policies.

civilian 10y ago
It's one thing when a billionaire gives away their money and are able to direct it at the charities they want. It's another thing when it's taxed and coordinated by the government. The United States government has the bias just as you showed-- to help the american people. But most of these tech billionaires recognize that it's imperative that we help all people, regardless of where they were born. It's why I'd rather give to GiveWell than to my local shelter.
- morgante 10y ago
  Yes, I personally would prefer to redistribute internationally (and hence that's where all my personal donations go) but from conversations I've recognized that it's politically unpalatable to the vast majority of Americans. The vast majority of people somehow think that their fellow Americans are more deserving than the international poor (and will quite strenuously argue that things like having toys for local kids is more important than literally saving lives). The nice thing about our tax system is that you can write off donations. So even if we did adopt stronger tax measures, billionaires could still choose to support more effective causes than the government.
  - brianwawok 10y ago
    Except say you can donate to a nonprofit, write it off, and that non profit can pay your kid an inflated salary to sit on the board. Happening right now to a presidential candidate.
vidarh 10y ago
> If you're smart enough to get into an elite university, you don't have to worry about the cost. Full stop. This presupposes that you are already in a social position that allows your intelligence to be recognised and that puts you in a position to even apply, or know that applying is an option.
- 150latefees 10y ago
  I cannot emphasize enough how true this is. Growing up as rural poor, it was an alien concept to me that there were tiers of colleges with different academic specializations. College was just a single monolithic concept to my people. If you were learned real good, and pass that big test, you could be admitted to college just like all those kids who lived closer to town. There was no difference in our minds between the community college 20 minutes away and the public university an hour and a half way. And once you get to the community college and shake off that fog, realize that college is a granular thing, then it is just all you can do to drag yourself up to that state university. Your family has no understanding at all why you would want to move to the state university. Its much further away, harder for you to help out, much more expensive. It just doesn't make any sense within their understanding of the world. Forget about an elite university, its been two years, and you are only now discovering calculus, formal logic, the scientific method. How will you ever compete with the hoards of whites who have been saturated in this world from the beginning?

cookiecaper 10y ago

>One main issue is that income inequality decreases socioeconomic mobility by inflating the cost of scarce goods that improve earnings capabilities. So 4K TVs are cheaper but college tuition becomes unaffordable, because good universities and grad programs are valuable, scarce goods that the wealthy can outbid everyone else on. Tuition rates didn't go through the roof until the government started guaranteeing/sponsoring tuition loans. When that happened, the colleges and banks knew they could charge whatever they wanted and still get paid, so tuition cost became detached from ability-to-pay, and there was no incentive to keep prices affordable anymore. The victim in this is the student, who gets saddled with decades of debt, or alternately, an eviscerated credit profile with an albatross that can't be discharged even in bankruptcy. That, however, is obviously not something that disturbs the educational system. Things go screwy fast when you decouple the classic economic checks and balances. While a small number of wealthy people would be both willing and able to afford outrageous rates for tuition, most of them would want a good value, and there's not enough fantastically-rich Americans to support something the size of the education system without drawing from the middle class for pupils.

digi_owl 10y ago
The sad part is that as with housing, the government is applying a demand side "solution" to a supply side problem. Education is expensive, because there is a limited capacity (teachers, facilities, etc). But rather than put money into expanding the capacity, they start offering stipends and loans. But this just inflate the prices. I wonder how much of the choice is because it is easier and quicker to show a results, thus it can be implemented within a single election term, and how much of it is straight graft.

dsacco 10y ago

In response to your main issue regarding socioeconomic mobility - why is this, in turn, a problem? If you can demonstrate that reduced social mobility is an issue, and that this is increased by progressively greater income inequality (the latter of which I probably agree with on cursory inspection), then it seems income inequality is a net loss. However, from a utilitarian perspective, I don't see a reason to care about social mobility if quality of life increases for everyone, not just the upper classes. Keep in mind that I am working on two axioms: 1. Income inequality is a mathematical certainty in a functional society with more than n participants, where n is the maximum number of people who can be personally and honestly cooperative with each other, and 2. Income inequality refers to differences in an individual's absolute resources available for consumption, not their quality of life (exceptions granted for luxury consumption goods, not basic utilities that are available across all social classes). As a very simplistic example that I'd enjoy having holes poked in, Apple has generated wondrous income inequality for many of its engineers and management. However, it has also leveraged economies of scale and competitive forces to manufacture a mass market product that is, statistically, enjoyed by even the poorest households in America and which affords its users with the most powerful innovation since the printing press in their pockets. EDIT: This comment has had a rapid change in up and down votes. It's fine to disagree with me, but I don't think it's unreasonable to question whether or not a lack of social mobility is actually a bad thing, as a Socratic baseline.

phamilton 10y ago
> In response to your main issue regarding socioeconomic mobility - why is this, in turn, a problem? It depends on the end goal. If the end goal is scientific advancement, for example, mobility into the educated and academic class is important to provide intellectual diversity. If we bifurcate society into the educated and uneducated, it would likely restrict the flow of new ideas and discovery.
hx87 10y ago
Low socioeconomic mobility is a problem because the potential for any individual to contribute to the good of society is at best loosely correlated with their previous socioeconomic status. If people who could have been top-notch scientists, engineers, civil servants and entrepreneurs were prevented from doing so because they couldn't move up the ladder (and inversely, rich rent-seekers couldn't move down), society is deprived of their contributions and is worse off. P.S.: The rapid change in up and down votes is probably caused more by your confusion of socioeconomic mobility and equality (you seem to be using the two interchangeably) than anything else.