6 ms·

It seems like the 1% will need to spend money to keep society stable one way or another. What's the most cost effective way of doing so? (The implication is th

It seems like the 1% will need to spend money to keep society stable one way or another. What's the most cost effective way of doing so? (The implication is that war and violence has a very high cost and so alternativas should be considered)

atemerev 9y ago
The problem is that 1% don't have that much money to afford it. They might be rich, but they are, well, 1%. The real money were in the middle class — numerous enough to pick many bills. Now there is not much of a middle class remaining. Many bills are due, and this is the end of the line — both for the 1% and everybody else.
- mistermann 9y ago
  The US is still a manufacturing powerhouse, and productivity is multiples of what it was decades ago. The wealth & capability certainly exists, but where it is disappearing to is another question.
  - atemerev 9y ago
    Demand for manufactured goods is increasingly saturating (China is next in line). Buying things is less in vogue these days, compared to immaterial pursuits like travel and education.
    - mistermann 9y ago
      Then we can direct the newly available labor and existing now underutilized raw materials to building homes that people can afford, yet that is somehow not possible. The math does not add up.
      - emodendroket 9y ago
        I'd suggest the 1943 essay Political Aspects of Full Employment would help square the gap. http://www.bradford-delong.com/1943/07/michal-kalecki-political-aspects-of-full-employment-policy-political-quarterly-1943.html http://www.bradford-delong.com/1943/07/michal-kalecki-politi...
        mistermann 9y ago
        My point isn't that it's not possible, the inputs are readily available, it's that the elite ultimately want 80% of everything produced, that's where it doesn't work.
        emodendroket 9y ago
        The essay's point is that ultimately employers do not favor a policy that eliminates unemployment or makes it comfortable because it would eliminate the fear of being fired, their best tool for worker coercion.
- emodendroket 9y ago
  Not really, though.
- onion2k 9y ago
  I guess it depends on what you consider to be the middle classes, but the richest 20% of the people in the US own about 85% of the wealth (the 1% own around 1/3rd of everything), with the remaining 80% of the people owning the remaining 15% of the wealth[1]. Rich people will have to spend more or the economy will collapse eventually. You can't keep a country going if only ~15% of the money is being used. [1] https://en.wikipedia.org/wiki/Wealth_in_the_United_States#Wealth_distribution https://en.wikipedia.org/wiki/Wealth_in_the_United_States#We...
  - sogen 9y ago
    They will be fine, robots don't eat.
    - curun1r 9y ago
      This is the part that worries me. Up until now, whenever wealth accumulates to an extreme degree, things always collapse, often violently. This is because the rich have always relied on the poor to produce for them and the poor have always been too numerous to resist when it comes to a fight. Robots change all this. For the first time in history, we are nearing a system where the rich don't need the poor. Whether it's producing food and other goods or even fighting their wars, the rich will soon be able to rely solely on automation to feed, clothe and protect them. Automation could create a system that doesn't have to collapse, no matter how top heavy it becomes.
      - atemerev 9y ago
        Worries why? Finally, the problem of the poor is being solved! /s
- PeterisP 9y ago
  Bread and circuses are much more affordable than ever, and getting cheaper every day. Every first world nation can afford to unconditionally give basic food, basic shelter and basic entertainment to every one of their (not global, though) poor people without asking work or anything else in return. Implementing something like this would be a major political and organizational problem, but economics-wise there's nothing preventing it; the industries that cover those needs for everyone take up a significant but still small percentage of the total GDP.
  - atemerev 9y ago
    Food, yes. Shelter, no. Healthcare and education — oh so very no.
    - PeterisP 9y ago
      Modern shelter is very cheap as soon as you decouple the location of it from the location of jobs, which redistribution does. A home in a good location is expensive mostly because of the location; but building shelter as such (or using shelter that's built but not needed because it's in towns that have no jobs) is cheap. Education and basic healthcare is already provided by many societies (USA is a bit of an exception, as it is in most things). Those parts doesn't even need any major changes or restructuring to provide for everyone, I was quite literal when stating food, shelter and entertainment as the core needs of unemployed/unemployable that would need such a change.
      - atemerev 9y ago
        Oh. Most of the towns will have no jobs soon. Cheap homes galore!
zeckalpha 9y ago
Taxes.
- jaggederest 9y ago
  I back-of-the-enveloped recently that you could replace all federal and state revenue with a 50 basis point annual tax on total wealth.
  - qubex 9y ago
    The problem is a relative handful of super-wealthy people can quickly relocate to more moderate tax regimes and take a huge chunk out of your tax revenue. Call it the Depardieu Effect if you wish. Unfortunately one must target the less mobile elements of society disproportionately.
    - bsder 9y ago
      > The problem is a relative handful of super-wealthy people can quickly relocate to more moderate tax regimes and take a huge chunk out of your tax revenue. Fine. Then leave. But then you don't get to participate in the market. This isn't that hard a problem. If you make the money in the US, you get taxed in the US. If you leave the US, you don't get to take the money made in the US with you. The problem is the lack of political will to close those loopholes that allow otherwise to occur.
      - qubex 9y ago
        I get your reasoning and some could even be sympathetic to your point of view (up to a point), but a few brief moments of consideration will certainly serve to illustrate that what you are advocating is totally impractical. How does one define (let alone implement) the denial in participation in the domestic market? Do you mean that companies with foreign shareholders can no longer trade? Do you mean that the opinions of foreign nationals can no longer be aired and/or commented? Do you mean that foreigners cannot be employed by organisations that participate in the economy? Do you mean that foreigners can no longer purchase from or sell to national firms?

atemerev 9y ago

The problem is that 1% don't have that much money to afford it. They might be rich, but they are, well, 1%. The real money were in the middle class — numerous enough to pick many bills. Now there is not much of a middle class remaining. Many bills are due, and this is the end of the line — both for the 1% and everybody else.

mistermann 9y ago
The US is still a manufacturing powerhouse, and productivity is multiples of what it was decades ago. The wealth & capability certainly exists, but where it is disappearing to is another question.
- atemerev 9y ago
  Demand for manufactured goods is increasingly saturating (China is next in line). Buying things is less in vogue these days, compared to immaterial pursuits like travel and education.
  - mistermann 9y ago
    Then we can direct the newly available labor and existing now underutilized raw materials to building homes that people can afford, yet that is somehow not possible. The math does not add up.
    - emodendroket 9y ago
      I'd suggest the 1943 essay Political Aspects of Full Employment would help square the gap. http://www.bradford-delong.com/1943/07/michal-kalecki-political-aspects-of-full-employment-policy-political-quarterly-1943.html http://www.bradford-delong.com/1943/07/michal-kalecki-politi...
      - mistermann 9y ago
        My point isn't that it's not possible, the inputs are readily available, it's that the elite ultimately want 80% of everything produced, that's where it doesn't work.
        emodendroket 9y ago
        The essay's point is that ultimately employers do not favor a policy that eliminates unemployment or makes it comfortable because it would eliminate the fear of being fired, their best tool for worker coercion.
emodendroket 9y ago
Not really, though.
onion2k 9y ago
I guess it depends on what you consider to be the middle classes, but the richest 20% of the people in the US own about 85% of the wealth (the 1% own around 1/3rd of everything), with the remaining 80% of the people owning the remaining 15% of the wealth[1]. Rich people will have to spend more or the economy will collapse eventually. You can't keep a country going if only ~15% of the money is being used. [1] https://en.wikipedia.org/wiki/Wealth_in_the_United_States#Wealth_distribution https://en.wikipedia.org/wiki/Wealth_in_the_United_States#We...
- sogen 9y ago
  They will be fine, robots don't eat.
  - curun1r 9y ago
    This is the part that worries me. Up until now, whenever wealth accumulates to an extreme degree, things always collapse, often violently. This is because the rich have always relied on the poor to produce for them and the poor have always been too numerous to resist when it comes to a fight. Robots change all this. For the first time in history, we are nearing a system where the rich don't need the poor. Whether it's producing food and other goods or even fighting their wars, the rich will soon be able to rely solely on automation to feed, clothe and protect them. Automation could create a system that doesn't have to collapse, no matter how top heavy it becomes.
    - atemerev 9y ago
      Worries why? Finally, the problem of the poor is being solved! /s
PeterisP 9y ago
Bread and circuses are much more affordable than ever, and getting cheaper every day. Every first world nation can afford to unconditionally give basic food, basic shelter and basic entertainment to every one of their (not global, though) poor people without asking work or anything else in return. Implementing something like this would be a major political and organizational problem, but economics-wise there's nothing preventing it; the industries that cover those needs for everyone take up a significant but still small percentage of the total GDP.
- atemerev 9y ago
  Food, yes. Shelter, no. Healthcare and education — oh so very no.
  - PeterisP 9y ago
    Modern shelter is very cheap as soon as you decouple the location of it from the location of jobs, which redistribution does. A home in a good location is expensive mostly because of the location; but building shelter as such (or using shelter that's built but not needed because it's in towns that have no jobs) is cheap. Education and basic healthcare is already provided by many societies (USA is a bit of an exception, as it is in most things). Those parts doesn't even need any major changes or restructuring to provide for everyone, I was quite literal when stating food, shelter and entertainment as the core needs of unemployed/unemployable that would need such a change.
    - atemerev 9y ago
      Oh. Most of the towns will have no jobs soon. Cheap homes galore!

zeckalpha 9y ago

Taxes.

jaggederest 9y ago
I back-of-the-enveloped recently that you could replace all federal and state revenue with a 50 basis point annual tax on total wealth.
- qubex 9y ago
  The problem is a relative handful of super-wealthy people can quickly relocate to more moderate tax regimes and take a huge chunk out of your tax revenue. Call it the Depardieu Effect if you wish. Unfortunately one must target the less mobile elements of society disproportionately.
  - bsder 9y ago
    > The problem is a relative handful of super-wealthy people can quickly relocate to more moderate tax regimes and take a huge chunk out of your tax revenue. Fine. Then leave. But then you don't get to participate in the market. This isn't that hard a problem. If you make the money in the US, you get taxed in the US. If you leave the US, you don't get to take the money made in the US with you. The problem is the lack of political will to close those loopholes that allow otherwise to occur.
    - qubex 9y ago
      I get your reasoning and some could even be sympathetic to your point of view (up to a point), but a few brief moments of consideration will certainly serve to illustrate that what you are advocating is totally impractical. How does one define (let alone implement) the denial in participation in the domestic market? Do you mean that companies with foreign shareholders can no longer trade? Do you mean that the opinions of foreign nationals can no longer be aired and/or commented? Do you mean that foreigners cannot be employed by organisations that participate in the economy? Do you mean that foreigners can no longer purchase from or sell to national firms?