4 ms·

At the risk of sounding too Paul Graham, how much of what you're talking about is due to poverty more than inequality?

crdoconnor 10y ago
Poverty and inequality are two sides of the same coin. Massive inequality is driven not by productivity but by compounding debt and other forms of rent-seeking. This always spirals out of control eventually leading to poverty, default or both.
- lisper 10y ago
  Absolutely right, but it's important to be aware of why it always spirals out of control: it's because part of people's decision making is based on their expectations about the future, and part of those expectations are the result of the societal rules that are in place at the time. So people get used to planning, for example, on the basis that they can expect an annualized 8% return from the market. It has been that way for decades, so why should it not continue to be that way? Well, the reason is that it cannot continue to be that way. An 8% return is not sustainable. Exponential growth is never sustainable in the long run. Even if we colonize the stars at the speed of light with 100% efficiency, that only allows quadratic growth in the long run. So when we start to hit the limits of growth, one of two things can happen. Either everyone accepts that things are slowing down and agrees to accept less than they were expecting based on the exponential projections, or some people don't accept this and use their political power to change the rules so that they can continue to live according to their expectations, which necessarily comes at the expense of everyone else at that point. To transition smoothly from a period of exponential growth back to a steady state, or even just sub-exponential growth, -- heck, even to exponential growth with a smaller exponent! -- requires a degree of cooperation that is very difficult to achieve in human societies.
  - crdoconnor 10y ago
    Rather than considering whether an 8% return is "reasonable" perhaps we should be considering whether distributing unearned income unequally is a good thing at all.
    - lisper 10y ago
      If you don't, how are you going to convince anyone to invest in anything?
      - crdoconnor 10y ago
        1) By trusting in people's self interested desire to magnify their own earnings rather than their desire to capture the value of somebody else's work. 2) Via the same community which invests in roads, schools and (in other countries) hospitals.
supremus_58 10y ago
wouldn't poverty largely be a product of inequality?
- kyleschiller 10y ago
  In the current system, yes, properly implemented, UBI would end poverty in America while still allowing for massive inequality. It sets a floor, not a ceiling.
  - thaumaturgy 10y ago
    I'm not sure that inequality is necessarily the thing to be fixed. I suspect that when most people talk about inequality, what they mean is, "a few people are doing really good and a lot of people are doing really bad". If you can lessen or remove the "doing really bad" part, whether through UBI or some other means (progressive taxation to fund other programs, whatever your ideology prefers), then statements of inequality start to mean just "a few people are doing really good" and I think there are far fewer people that are bothered by that. I also think these conversations tend to get stuck on the definition of poverty. Some people say, "well, it can't be poverty because they all have smartphones", and other people say, "well, it's poverty because they lack any opportunity". I think that if these discussions are going to get anywhere we have to start by convincing people that the definition of poverty is allowed to change and that we shouldn't in the 21st century be defining poverty in 19th-century terms.
    - coldtea 10y ago
      >I suspect that when most people talk about inequality, what they mean is, "a few people are doing really good and a lot of people are doing really bad". If you can lessen or remove the "doing really bad" part, whether through UBI or some other means (progressive taxation to fund other programs, whatever your ideology prefers), then statements of inequality start to mean just "a few people are doing really good" and I think there are far fewer people that are bothered by that. I'd say the problem with inequality is something else entirely than "some people doing really good" vs "lots of people doing really bad". It's that there are resources in the world, and some people have way more access to them. This can hold even when all people are out of poverty: of the potential and resources of the world, still some people could take the lion's share to the exclusion of others, regardless of whether everybody has a house and food on their table. And this inequality (with the true sense of the word, not mere poverty vs richness) is also related to opportunities and squandered potential (as in: yeah, we all have UBI, but this dumb mega-rich person could pay his way to Harvard, whereas some other with much larger potential -- e.g. smarts, inventiveness, etc-- had to settle for some lesser school, and didn't get as far in their career).
dv_dt 10y ago
I see poverty (and UBI) as fixing the problem of people not even having enough to live on, but inequality having a much wider range of impact. Maybe UBI could lead to fixes in other areas - but there is this other problem economically, of people making rational decisions based upon the limited resources they have to draw upon (capital, experience, network connections, family fallbacks, etc). How may good ideas are never explored because someone has an idea that is a 0.001% of success, but could benefit the world 1000x over? Then they look at their personal resources and just push that idea away? This isn't a problem just on an individual basis. For instance, I sometimes idly wonder how many fairly sharp and/or self-driven people ended up working for the illegal drug industry vs how society (and those individuals) could have benefited had other paths been available to them. Maybe we've missed out on many exceptional CEOs because they were taken up by the illegal drug industry, became drug lords then somewhere along the line locked up or killed. Or the looming Automation issue. We may take care of many basic economic activities by automation, and now many people will be out of work - we see that couched as a "jobs" problem, but looked at another way it's and extension that our economic system really doesn't know how to harness human capability. Our current economic system says only give people just enough resources - any excess is pulled away from people who lack leverage (like many who exchange labor for income). And increasingly I think the fact that allocating for leverage != allocating for potential is unbalancing our economy. Now most wealth has accumulated at the top to a very few - and, from world economic growth numbers, that group basically doesn't know how to more productively allocate it on a world-wide scale (or maybe doesn't want to to preserve the accumulated wealth, or some mix).

Poverty and inequality are two sides of the same coin. Massive inequality is driven not by productivity but by compounding debt and other forms of rent-seeking. This always spirals out of control eventually leading to poverty, default or both.

lisper 10y ago
Absolutely right, but it's important to be aware of why it always spirals out of control: it's because part of people's decision making is based on their expectations about the future, and part of those expectations are the result of the societal rules that are in place at the time. So people get used to planning, for example, on the basis that they can expect an annualized 8% return from the market. It has been that way for decades, so why should it not continue to be that way? Well, the reason is that it cannot continue to be that way. An 8% return is not sustainable. Exponential growth is never sustainable in the long run. Even if we colonize the stars at the speed of light with 100% efficiency, that only allows quadratic growth in the long run. So when we start to hit the limits of growth, one of two things can happen. Either everyone accepts that things are slowing down and agrees to accept less than they were expecting based on the exponential projections, or some people don't accept this and use their political power to change the rules so that they can continue to live according to their expectations, which necessarily comes at the expense of everyone else at that point. To transition smoothly from a period of exponential growth back to a steady state, or even just sub-exponential growth, -- heck, even to exponential growth with a smaller exponent! -- requires a degree of cooperation that is very difficult to achieve in human societies.
- crdoconnor 10y ago
  Rather than considering whether an 8% return is "reasonable" perhaps we should be considering whether distributing unearned income unequally is a good thing at all.
  - lisper 10y ago
    If you don't, how are you going to convince anyone to invest in anything?
    - crdoconnor 10y ago
      1) By trusting in people's self interested desire to magnify their own earnings rather than their desire to capture the value of somebody else's work. 2) Via the same community which invests in roads, schools and (in other countries) hospitals.

supremus_58 10y ago

wouldn't poverty largely be a product of inequality?

kyleschiller 10y ago
In the current system, yes, properly implemented, UBI would end poverty in America while still allowing for massive inequality. It sets a floor, not a ceiling.
- thaumaturgy 10y ago
  I'm not sure that inequality is necessarily the thing to be fixed. I suspect that when most people talk about inequality, what they mean is, "a few people are doing really good and a lot of people are doing really bad". If you can lessen or remove the "doing really bad" part, whether through UBI or some other means (progressive taxation to fund other programs, whatever your ideology prefers), then statements of inequality start to mean just "a few people are doing really good" and I think there are far fewer people that are bothered by that. I also think these conversations tend to get stuck on the definition of poverty. Some people say, "well, it can't be poverty because they all have smartphones", and other people say, "well, it's poverty because they lack any opportunity". I think that if these discussions are going to get anywhere we have to start by convincing people that the definition of poverty is allowed to change and that we shouldn't in the 21st century be defining poverty in 19th-century terms.
  - coldtea 10y ago
    >I suspect that when most people talk about inequality, what they mean is, "a few people are doing really good and a lot of people are doing really bad". If you can lessen or remove the "doing really bad" part, whether through UBI or some other means (progressive taxation to fund other programs, whatever your ideology prefers), then statements of inequality start to mean just "a few people are doing really good" and I think there are far fewer people that are bothered by that. I'd say the problem with inequality is something else entirely than "some people doing really good" vs "lots of people doing really bad". It's that there are resources in the world, and some people have way more access to them. This can hold even when all people are out of poverty: of the potential and resources of the world, still some people could take the lion's share to the exclusion of others, regardless of whether everybody has a house and food on their table. And this inequality (with the true sense of the word, not mere poverty vs richness) is also related to opportunities and squandered potential (as in: yeah, we all have UBI, but this dumb mega-rich person could pay his way to Harvard, whereas some other with much larger potential -- e.g. smarts, inventiveness, etc-- had to settle for some lesser school, and didn't get as far in their career).

dv_dt 10y ago

I see poverty (and UBI) as fixing the problem of people not even having enough to live on, but inequality having a much wider range of impact. Maybe UBI could lead to fixes in other areas - but there is this other problem economically, of people making rational decisions based upon the limited resources they have to draw upon (capital, experience, network connections, family fallbacks, etc). How may good ideas are never explored because someone has an idea that is a 0.001% of success, but could benefit the world 1000x over? Then they look at their personal resources and just push that idea away? This isn't a problem just on an individual basis. For instance, I sometimes idly wonder how many fairly sharp and/or self-driven people ended up working for the illegal drug industry vs how society (and those individuals) could have benefited had other paths been available to them. Maybe we've missed out on many exceptional CEOs because they were taken up by the illegal drug industry, became drug lords then somewhere along the line locked up or killed. Or the looming Automation issue. We may take care of many basic economic activities by automation, and now many people will be out of work - we see that couched as a "jobs" problem, but looked at another way it's and extension that our economic system really doesn't know how to harness human capability. Our current economic system says only give people just enough resources - any excess is pulled away from people who lack leverage (like many who exchange labor for income). And increasingly I think the fact that allocating for leverage != allocating for potential is unbalancing our economy. Now most wealth has accumulated at the top to a very few - and, from world economic growth numbers, that group basically doesn't know how to more productively allocate it on a world-wide scale (or maybe doesn't want to to preserve the accumulated wealth, or some mix).