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Forcibly redistributing income from low resource generators to high resource generators creates an incentive for people with fewer resources to have more childr

by aminok 10y ago

Forcibly redistributing income from low resource generators to high resource generators creates an incentive for people with fewer resources to have more children than they are capable of supporting. This dynamic will in the long run lead to more people that produce fewer resources. Currently government is redistributing income upward by economic prohibitions (regulatory barriers): http://cepr.net/publications/reports/working-paper-the-upward-redistribution-of-income-are-rents-the-story http://cepr.net/publications/reports/working-paper-the-upwar... and it is redistributing downward with social welfare spending, with the US massively increasing social welfare spending since 1972: http://fivethirtyeight.blogs.nytimes.com/2013/01/16/what-is-driving-growth-in-government-spending/?_r=1 http://fivethirtyeight.blogs.nytimes.com/2013/01/16/what-is-... Annual spending growth on various components of social welfare spending (1972 - 2011): >Pensions and retirement: 4.4% >Healthcare: 5.7% >Welfare: 4.1% Annual economic growth over the time frame: >2.7% The only thing it has to show for giving people more "free money" to spend is a higher trade deficit, stagnant wage growth, and, I would argue, an explosion in the amount of single parenthood: http://pinetreewatchdog.org/500-rise-in-single-parenthood-fueling-family-poverty-in-maine/ http://pinetreewatchdog.org/500-rise-in-single-parenthood-fu... But hey, since 40 years of social democracy has failed, let's keep doubling down and giving people more "free" money. The end result of this bidirectional forcible redistribution is the productive middle class being destroyed, and two classes becoming increasingly significant: a small upper class controlling a growing share of national output, and a large unproductive underclass that is dependent on the taxes that upper class pays, constituting an increasingly large portion of the population.

jjoonathan 10y ago
> Currently government is redistributing income upward by economic prohibitions (regulatory barriers) Forgive me for the double post, but part of a sibling comment of mine is especially relevant here: > I'm regularly floored by people's ability to talk about network effects, economies of scale, information asymmetries, moats, winner-takes-all games, and mergers/acquisitions with one breath -- all of which are non-regulatory market forces that suppress competition and innovation -- and then with the next breath assert that deregulation is the most straightforward way to spur innovation and competition. I agree that eliminating rents should be a (if not the) primary goal of government, but I don't agree that eliminating regulation is synonymous.
- aminok 10y ago
  All regulations, except on natural resources like land, should be eliminated in my opinion, as they are forceful interventions against people exercising their legitimate right to freely contract and utilise their own private property. In industries where network effects emerge, the government should fund open-source protocols that can compete with privately owned options. For example, applications built on a distributed consensus public blockchain (e.g. Ethereum) could be competitive with many existing centralized services.
  - eli_gottlieb 10y ago
    >All regulations, except on natural resources like land, should be eliminated in my opinion, as they are forceful interventions against people exercising their legitimate right to freely contract and utilise their own private property. That's a sickening utopian vision, but luckily we live in the real world.
  - a_t48 10y ago
    Should I have the right to force someone into slavery\indentured servitude if they inadvertently sign their rights away?
    - none_for_me_thx 10y ago
      A valid contract requires consideration. It also requires an understanding, by both parties, of the terms of the contract so, no you couldn't _force_ someone into _slavery_ if they _inadvertently_ blah blah blah. I'd say none of those words make sense in context of a valid contract.
- baddox 10y ago
  Why is that contradictory? It only seems contradictory if you expect government regulations to reliably (i.e. on net) decrease market inefficiencies. That is certain a plausible argument, but it needs to be made rather than just assumed.
neffy 10y ago
That argument (Malthusian) goes back to the beginning of the industrial revolution. But since pretty much every technologist, scientist and engineer currently working can trace their lineage in less than 4 generations back to the working class, I think I'll go with greater and better distributed wealth and education solving more problems than it creates. The fundamental issue addressed by positive incomes is simply that money serves two processes in economies that are at complete odds with each other, 1) a store of value and 2) the fluid that drives economic activity. The more money that is held in the fewer hands, the less well it is able to fulfil the second and far more important purpose. In the limit, all the money is held by very few people, and shortly after that, those people find themselves at the hands of a very angry mob. Which just never ends well.
- aminok 10y ago
  The Malthusian argument has never been tested for an extended period in a situation where resource usage has been decoupled from resource generation. From the brief experiment we've had with massive forcible income redistribution (social democracy), we've seen the following: * slow down in wage growth and improvements in life expectancy * slow down in productivity growth * explosion in the rate of single parenthood (perfectly in line with economic theory on how availability of resources affects child rearing choices) But hey since 40 years of social democracy has failed so utterly, clearly we should keep blaming the free market and doubling down on social democracy.
  - FullMtlAlcoholc 10y ago
    > * explosion in the rate of single parenthood (perfectly in line with economic theory on how availability of resources affects child rearing choices) This has more to do with the evolution of freedom to life, liberty, and the pursuit of happiness. Any economic theory rooted in rational decision making is incomplete at best. We could lower this rate by going back in time when marriage was treated like a contract with the intent of producing viable offspring. > * slow down in improvements in life expectancy You mention that you're against any regulation. Cigarette smoking causes more than 480,000 deaths each year in the United States, making it by far the leading cause of death from cancer and on its own the second leading cause of death. This is nearly one in five deaths. I shouldn't have to bring up the behavior of the major tobacco companies in the past and how life expectancy would be now without government regulation. Also, if you're going to blame this on social democracies and not that we may be reaching what the limits of human lifespan are in the anthropocene era, I don't know what to say. What I can say is that we will likely see an uptick in human lifespan due to CRISPR related technologies (discovered at a public, government funded university with research grants provided by public and private sources). Free market ideologues make the same fatal mistake that economists did when creating decision theory. They eschew psychology and replace it with the mythical rational, utility maximizing individual. Also, humans are horrible at pricing things and rarely take externalities into account. For example, is the cost of submerging pacific islands and displacing the inhabitants taken into account when doing things that release greenhouse gases? It's like a cult or religion that thinks they uniquely have the solution for all the world's ills. > But hey since 40 years of social democracy has failed so utterly, There is more to life than simply money. I'm not the biggest fan of social democracies, but I am thankful that I have things like the right to vote after Jim Crow was shut down. I am thankful my cousin was finally able to come out of the closet and marry the person he loves. But I guess since I can't put a value on that, social progress is irrelevant =P
vacri 10y ago
> But hey, since 40 years of social democracy has failed, let's keep doubling down and giving people more "free" money. ... you mean the countries with the highest quality-of-life measures? The Scandanavian nations, Canada, Australia, NZ, all of which have vibrant economies, high average wages, and strong middle classes? The US with their pathological fear of their own government is not what I'd use as a particularly characteristic example of social democracy.
- aminok 10y ago
  They don't have "vibrant economies". They have strong economies, that long ago stopped being "vibrant" (by vibrant, I mean fast-developing). Europe and Canada have seen stagnant wage and economic growth since adopting social democracy. What are you basing your claim that these policies are working on? I strongly advise you to stop assuming that what you're told by the media and echo chambers on the internet is correct, and actually do research on these issues, by looking at statistics. Social democracy has not worked in Scandinavia. The author of Scandinavian Unexceptionalism explains how it has harmed Sweden: "From 1870 until 1970, Sweden was a free market success story. Sweden had the highest growth rate in the industrialized world. .. [After taxes were raised in the late 60s and 70s] Sweden stagnated": https://youtu.be/D0hnA341AWE?t=5m23s https://youtu.be/D0hnA341AWE?t=5m23s Sweden was the 3rd wealthiest country in the world in 1968. After it created a massive welfare state in the 1970s and 80s, its growth stagnated, and by 1991, it was 17th highest income country in the world. Other important facts: http://iea.org.uk/sites/default/files/publications/files/Sanandajinima-interactive.pdf http://iea.org.uk/sites/default/files/publications/files/San... • Scandinavia is often cited as having high life expectancy and good health outcomes in areas such as infant mortality. Again, this predates the expansion of the welfare state. In 1960, Norway had the highest life expectancy in the OECD, followed by Sweden, Iceland and Denmark in third, fourth and fifth positions. By 2005, the gap in life expectancy between Scandinavian countries and both the UK and the US had shrunk considerably. Iceland, with a moderately sized welfare sector, has over time outpaced the four major Scandinavian countries in terms of life expectancy and infant mortality. • Scandinavia’s more equal societies also developed well before the welfare states expanded. Income inequality reduced dramatically during the last three decades of the 19th century and during the first half of the 20th century. Indeed, most of the shift towards greater equality happened before the introduction of a large public sector and high taxes. If you want a more equal society, you need a more free market. It is regulatory prohibitions (anti-free-market policy) on economic activity that are contributing to growing income disparity: "Make elites compete: Why the 1% earn so much and what to do about it": http://www.brookings.edu/blogs/social-mobility-memos/posts/2016/03/25-make-elites-compete-why-one-percent-earn-so-much-rothwell http://www.brookings.edu/blogs/social-mobility-memos/posts/2... >The US with their pathological fear of their own government is not what I'd use as a particularly characteristic example of social democracy. By every broad-based objective measure, the scale of forcible income redistribution has massively increased in relative and absolute terms in the US. The raw statistics show that the US has by every objective measure moved drastically in the direction of social democracy over the last 40 years. The same applies to every other major Western economy.
dang 10y ago
We detached this subthread from https://news.ycombinator.com/item?id=13594599 https://news.ycombinator.com/item?id=13594599 and marked it off-topic. We've also banned this account for seriously abusing HN, which you can read about here: https://news.ycombinator.com/item?id=13600908 https://news.ycombinator.com/item?id=13600908.

by aminok 10y ago

jjoonathan 10y ago

> Currently government is redistributing income upward by economic prohibitions (regulatory barriers) Forgive me for the double post, but part of a sibling comment of mine is especially relevant here: > I'm regularly floored by people's ability to talk about network effects, economies of scale, information asymmetries, moats, winner-takes-all games, and mergers/acquisitions with one breath -- all of which are non-regulatory market forces that suppress competition and innovation -- and then with the next breath assert that deregulation is the most straightforward way to spur innovation and competition. I agree that eliminating rents should be a (if not the) primary goal of government, but I don't agree that eliminating regulation is synonymous.

aminok 10y ago
All regulations, except on natural resources like land, should be eliminated in my opinion, as they are forceful interventions against people exercising their legitimate right to freely contract and utilise their own private property. In industries where network effects emerge, the government should fund open-source protocols that can compete with privately owned options. For example, applications built on a distributed consensus public blockchain (e.g. Ethereum) could be competitive with many existing centralized services.
- eli_gottlieb 10y ago
  >All regulations, except on natural resources like land, should be eliminated in my opinion, as they are forceful interventions against people exercising their legitimate right to freely contract and utilise their own private property. That's a sickening utopian vision, but luckily we live in the real world.
- a_t48 10y ago
  Should I have the right to force someone into slavery\indentured servitude if they inadvertently sign their rights away?
  - none_for_me_thx 10y ago
    A valid contract requires consideration. It also requires an understanding, by both parties, of the terms of the contract so, no you couldn't _force_ someone into _slavery_ if they _inadvertently_ blah blah blah. I'd say none of those words make sense in context of a valid contract.
baddox 10y ago
Why is that contradictory? It only seems contradictory if you expect government regulations to reliably (i.e. on net) decrease market inefficiencies. That is certain a plausible argument, but it needs to be made rather than just assumed.

neffy 10y ago

That argument (Malthusian) goes back to the beginning of the industrial revolution. But since pretty much every technologist, scientist and engineer currently working can trace their lineage in less than 4 generations back to the working class, I think I'll go with greater and better distributed wealth and education solving more problems than it creates. The fundamental issue addressed by positive incomes is simply that money serves two processes in economies that are at complete odds with each other, 1) a store of value and 2) the fluid that drives economic activity. The more money that is held in the fewer hands, the less well it is able to fulfil the second and far more important purpose. In the limit, all the money is held by very few people, and shortly after that, those people find themselves at the hands of a very angry mob. Which just never ends well.

aminok 10y ago
The Malthusian argument has never been tested for an extended period in a situation where resource usage has been decoupled from resource generation. From the brief experiment we've had with massive forcible income redistribution (social democracy), we've seen the following: * slow down in wage growth and improvements in life expectancy * slow down in productivity growth * explosion in the rate of single parenthood (perfectly in line with economic theory on how availability of resources affects child rearing choices) But hey since 40 years of social democracy has failed so utterly, clearly we should keep blaming the free market and doubling down on social democracy.
- FullMtlAlcoholc 10y ago
  > * explosion in the rate of single parenthood (perfectly in line with economic theory on how availability of resources affects child rearing choices) This has more to do with the evolution of freedom to life, liberty, and the pursuit of happiness. Any economic theory rooted in rational decision making is incomplete at best. We could lower this rate by going back in time when marriage was treated like a contract with the intent of producing viable offspring. > * slow down in improvements in life expectancy You mention that you're against any regulation. Cigarette smoking causes more than 480,000 deaths each year in the United States, making it by far the leading cause of death from cancer and on its own the second leading cause of death. This is nearly one in five deaths. I shouldn't have to bring up the behavior of the major tobacco companies in the past and how life expectancy would be now without government regulation. Also, if you're going to blame this on social democracies and not that we may be reaching what the limits of human lifespan are in the anthropocene era, I don't know what to say. What I can say is that we will likely see an uptick in human lifespan due to CRISPR related technologies (discovered at a public, government funded university with research grants provided by public and private sources). Free market ideologues make the same fatal mistake that economists did when creating decision theory. They eschew psychology and replace it with the mythical rational, utility maximizing individual. Also, humans are horrible at pricing things and rarely take externalities into account. For example, is the cost of submerging pacific islands and displacing the inhabitants taken into account when doing things that release greenhouse gases? It's like a cult or religion that thinks they uniquely have the solution for all the world's ills. > But hey since 40 years of social democracy has failed so utterly, There is more to life than simply money. I'm not the biggest fan of social democracies, but I am thankful that I have things like the right to vote after Jim Crow was shut down. I am thankful my cousin was finally able to come out of the closet and marry the person he loves. But I guess since I can't put a value on that, social progress is irrelevant =P

vacri 10y ago

> But hey, since 40 years of social democracy has failed, let's keep doubling down and giving people more "free" money. ... you mean the countries with the highest quality-of-life measures? The Scandanavian nations, Canada, Australia, NZ, all of which have vibrant economies, high average wages, and strong middle classes? The US with their pathological fear of their own government is not what I'd use as a particularly characteristic example of social democracy.

aminok 10y ago
They don't have "vibrant economies". They have strong economies, that long ago stopped being "vibrant" (by vibrant, I mean fast-developing). Europe and Canada have seen stagnant wage and economic growth since adopting social democracy. What are you basing your claim that these policies are working on? I strongly advise you to stop assuming that what you're told by the media and echo chambers on the internet is correct, and actually do research on these issues, by looking at statistics. Social democracy has not worked in Scandinavia. The author of Scandinavian Unexceptionalism explains how it has harmed Sweden: "From 1870 until 1970, Sweden was a free market success story. Sweden had the highest growth rate in the industrialized world. .. [After taxes were raised in the late 60s and 70s] Sweden stagnated": https://youtu.be/D0hnA341AWE?t=5m23s https://youtu.be/D0hnA341AWE?t=5m23s Sweden was the 3rd wealthiest country in the world in 1968. After it created a massive welfare state in the 1970s and 80s, its growth stagnated, and by 1991, it was 17th highest income country in the world. Other important facts: http://iea.org.uk/sites/default/files/publications/files/Sanandajinima-interactive.pdf http://iea.org.uk/sites/default/files/publications/files/San... • Scandinavia is often cited as having high life expectancy and good health outcomes in areas such as infant mortality. Again, this predates the expansion of the welfare state. In 1960, Norway had the highest life expectancy in the OECD, followed by Sweden, Iceland and Denmark in third, fourth and fifth positions. By 2005, the gap in life expectancy between Scandinavian countries and both the UK and the US had shrunk considerably. Iceland, with a moderately sized welfare sector, has over time outpaced the four major Scandinavian countries in terms of life expectancy and infant mortality. • Scandinavia’s more equal societies also developed well before the welfare states expanded. Income inequality reduced dramatically during the last three decades of the 19th century and during the first half of the 20th century. Indeed, most of the shift towards greater equality happened before the introduction of a large public sector and high taxes. If you want a more equal society, you need a more free market. It is regulatory prohibitions (anti-free-market policy) on economic activity that are contributing to growing income disparity: "Make elites compete: Why the 1% earn so much and what to do about it": http://www.brookings.edu/blogs/social-mobility-memos/posts/2016/03/25-make-elites-compete-why-one-percent-earn-so-much-rothwell http://www.brookings.edu/blogs/social-mobility-memos/posts/2... >The US with their pathological fear of their own government is not what I'd use as a particularly characteristic example of social democracy. By every broad-based objective measure, the scale of forcible income redistribution has massively increased in relative and absolute terms in the US. The raw statistics show that the US has by every objective measure moved drastically in the direction of social democracy over the last 40 years. The same applies to every other major Western economy.

dang 10y ago

We detached this subthread from https://news.ycombinator.com/item?id=13594599 https://news.ycombinator.com/item?id=13594599 and marked it off-topic. We've also banned this account for seriously abusing HN, which you can read about here: https://news.ycombinator.com/item?id=13600908 https://news.ycombinator.com/item?id=13600908.