9 ms·

Serious question: if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not?

by acchow 9y ago

ageek123 9y ago
Some people will claim you can get both innovation and equality if you just throw in enough redistribution, but this is completely delusional.
- deleted 9y ago
  [deleted]
- JamesBarney 9y ago
  Yeah only pinko hippies like the IMF believe that :) https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf
  - richardknop 9y ago
    You know IMF is not infallible? For example they were one of the architects of the Greek debt crisis. Even after the initial outbreak of Greek debt problem when it was clear to everybody Greece cannot ever repay their debt and it will have to be restructured, they recommended further and further bailouts in order to protect German / French banks, effectively bailing out big banks with EU taxpayer money. Take a look at Greece today and see how IMF policies are working out. Actually you can take a look at the entire Southern Europe which is the end result of policies of IMF/ECB/Council, the so called Troika.
    - ue_ 9y ago
      Perhaps the solution then is not redistribution of money, but common control over the means of production, the way by which people sustain themselves.
      - richardknop 9y ago
        Communism is not a solution. It was tried in my home country with horrible results. It's been 25 years since end of communism and we are still recovering from the damage it has done to us.
        ue_ 9y ago
        For that reason I think we should support modern day Marxists (and non-Marxian Communists), anarchists and Communalists in their research and investigation into advancing their hypothesis. A good read on this is Badiou's The Communist Hypothesis.
jack9 9y ago
Increase in wealth inequality is not the only outcome. There's also the small issues of better resource management, like food per square acre, mpg, medical technology, etc. It's a complex subject insofar as it requires multi-discipline analysis. Is it reasonable that there be a stochastic "good/bad"? It's a good outcome for humanity, but has been tough to survive for the lowest IQ, least motivated, and least wealthy (relative to any given social locality) and tough to thrive/grow from the middle class. If you have a million dollars today, or had the equivalent in 1980, you could have lived off the interest and would have made money all the while till today. Wealth inequality is often the basis for social revolution, so you have to be careful not to let it get too out of control for too long. In relation to dead cultures who went through this process, we've only just begun the initial stages of intolerance toward it. Occupy, bernie 2017, etc have largely been unsuccessful in motivating political or even social change. This was one outcome that was considered in the formation of the Union (an eventual defacto oligarchy) that was meant to be managed by the US political process. The conflict has already been escalated by flawed judgement in the judicial (citizens united).
abyssin 9y ago
It could be bad if you find out that at some point, equality matters more than raw material wealth to the well-being of everyone.
coldtea 9y ago
Serious question: who says it "makes everyone better off"? Fancy new technology is not of much comfort to people who back in the day could buy a house and send their kids to college with a single blue collar income-earner and now can hardly find a job (and can't even dream of sending their kids to college with their puny earnings). >if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not? Also, humans are not animals to just need food and shelter. For humans it's not just what you have, it's also what you have relative to others. That's why nobody in the US considers a "trailer park" person fortunate just because they don't live in a third world slum or in a cave like people did in 10.000 B.C. -- we consider their position relative to a current baseline. If that gets too out of balance, people have issues.
- jstanley 9y ago
  If you can't keep up, that's not other people's fault for being better than you.
  - Sholmesy 9y ago
    This is such an ignorant statement, it makes my blood boil. People shouldn't be left to die, because they weren't naturally blessed with an adaptability that allows them to be retrained into software engineers. There are a huge number of reasons why someone might not be able to "keep up" in todays world. To write that off as 'being better' is disgusting.
  - oblio 9y ago
    Ok, let's say you're right. 1. Are you willing to leave behind, say, 40-50% of the population? Especially since that group could include people such as your parents or your partner or your kids. 2. If you're willing to leave them behind, what are you going to do with them?
    - jstanley 9y ago
      If it's your parent, partner, or kids, (or even if it's not -- it could be anyone) you're welcome to provide for them yourself. You're also welcome to donate to (or even work for!) charities that provide for them. But it's not OK to force everyone else to provide for them.
paulajohnson 9y ago
To answer that you need a way of equating money with "utility" (i.e. the use and/or pleasure that people get from their money). I believe that utility is logarithmic with rate of expenditure. Hence doubling your spending rate gets you a constant increment in utility. This is why we measure pay rises in percent rather than absolute value. Another $100/week would make a huge difference to someone on the breadline, but is lost in the noise for a millionaire. This means that money transferred from a rich person to a poor person will increase utility, because the decrement in the rich person's utility is more than outweighed by the incremenent in the poor person's utility. This difference can also accomodate the transaction costs (i.e. running the IRS) and the "deadweight cost" of decreasing the rich person's incentive to earn more. This would seem to suggest that money should be redistributed so that everyone has the same amount, as that would maximise utility if the total amount of money is constant. But of course that condition isn't true: in a world with zero economic incentives there would be no economic activity. In reality of course such a world would go horribly wrong in any number of ways. So there would seem to be an optimum amount of inequality in a society. Too little, and you destroy incentives to create new stuff, thereby making everyone poorer than they would have been. Too much and you are wasting valuable resources on gold plated baths that would be better spent giving poor people a tolerable standard of living, education, health care etc.
- klodolph 9y ago
  My guess is it would be more of a logistic curve (S-shaped) rather than logarithmic. $1 does not make you much happier than 1¢, but $50k/year is a big step up from $30k/year. At the low end, at some point you can afford to have a roof over your head, and an extra $20 might mean that you're eating much better for a whole week, or you can buy new shoes, or whatever. But if you're homeless, $20 won't feed you for very long or get you out of the rain for very long. At the mid range, a salary bump from $30k to $50k might make a world of difference if you're trying to raise a family. It might mean that you're not worrying about how you're going to pay for groceries, or it might mean that your kids are always wearing reasonable, well-fitting clothing.
  - JamesBarney 9y ago
gadders 9y ago
I think as long as the lowest people have a good standard of living, I would argue it doesn't matter that the richest have a lot more.
timgrahamtech 9y ago
Consider the question in a different context. Suppose I go to a poor village in India and I give each school age kid the equivalent of 10 USD in INR (rupees) but I give one kid the equivalent of 500 USD. Let's suppose the kid who gets more isn't chosen at random. Suppose that I have some criteria for who deserves to get more but that I don't consider who deserves it the most. Everyone got something but one person got significantly more. Is that a bad outcome? Will the kids who got 10 USD feel satisfied knowing that most of the others got the same amount? Will the kid who got 500 USD start to tell the others that they would have gotten 500 USD too if only they had done XYZ? I think this question is really just asking if inequality is bad. It seems to me that inequality is an inherent part of nature in general and the human condition in particular. "Would you really want equality, or are you ok with inequality at some level?" Another way to say equal is homogeneous. To rephrase it, "Would you want everyone to be the same, or do you value diversity instead?" I would propose a different question. If some cause (technology in this case) has the effect of helping everyone but helps some substantially more, is this situation sustainable? Then consider, will everyone's fortunes continue to improve forever? Will some equilibrium in the inequality be established? Will the inequality eventually reach an extreme such that the situation will be worse for certain people or society as a whole? I don't propose answers to these questions. However, I think we can look through history to find examples of how similar scenarios played out in the past.
heisenbit 9y ago
Social mobility. If access to education and management positions are primarily a function of how much money your parents had then over time a ruling class with money but little clue will emerge. It will be all downhill for everyone from then...
myreggaereggae 9y ago
On one dimension, health, there is a body of research suggesting that increasing income inequality is associated with poorer health outcomes at a population level. Here is a recent-ish review by two researchers who have spent a lot of time on this topic: http://www.sciencedirect.com/science/article/pii/S0277953614008399 http://www.sciencedirect.com/science/article/pii/S0277953614...
ookdatnog 9y ago
The economy of a nation produces a certain amount of wealth, and that wealth needs to be distributed in a way that is as efficient and fair as possible (for some notion of fair). Capitalism attempts to distribute the wealth produced by the nation according to the value each individual (and that individual's property) contributes to the economy. There are false positives and false negatives there (people who make more money than their contribution is worth and vice versa), but that's the theory. A fundamental assumption of that system is that almost everyone (apart from the sick or handicapped) can produce enough value to sustain themselves. Even if someone has no capital or no education, we assume that they can trade unskilled labor and that the value of that labor suffices to buy them, at least, the things they need to satisfy their most basic needs. That assumption might become untrue in the future. If that happens, the problem won't be that we don't produce enough value to support these people, but that the current system for distributing that wealth will no longer work.
- DarkKomunalec 9y ago
  > Capitalism attempts to distribute the wealth produced by the nation according to the value each individual (and that individual's property) contributes to the economy. Where are you getting this from? I am aware of no such attempt. I thought that, in idealized capitalism, everyone gets as much as they are able to convince or legally force others to pay them, and 'value' produced is irrelevant.
jrochkind1 9y ago
How do you know if it's making "everyone" better off or not? What does 'better off' mean, and how do you measure it? If you could demonstrate it made 'everyone' better off, I think it'd be an interesting question to consider. But I suspect many of those at the bottom ends of our actually existing inequality are not so "better off".

Serious question: if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not?

by acchow 9y ago

Serious question: if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not?

ageek123 9y ago

Some people will claim you can get both innovation and equality if you just throw in enough redistribution, but this is completely delusional.

deleted 9y ago
[deleted]
JamesBarney 9y ago
Yeah only pinko hippies like the IMF believe that :) https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf
- richardknop 9y ago
  You know IMF is not infallible? For example they were one of the architects of the Greek debt crisis. Even after the initial outbreak of Greek debt problem when it was clear to everybody Greece cannot ever repay their debt and it will have to be restructured, they recommended further and further bailouts in order to protect German / French banks, effectively bailing out big banks with EU taxpayer money. Take a look at Greece today and see how IMF policies are working out. Actually you can take a look at the entire Southern Europe which is the end result of policies of IMF/ECB/Council, the so called Troika.
  - ue_ 9y ago
    Perhaps the solution then is not redistribution of money, but common control over the means of production, the way by which people sustain themselves.
    - richardknop 9y ago
      Communism is not a solution. It was tried in my home country with horrible results. It's been 25 years since end of communism and we are still recovering from the damage it has done to us.
      - ue_ 9y ago
        For that reason I think we should support modern day Marxists (and non-Marxian Communists), anarchists and Communalists in their research and investigation into advancing their hypothesis. A good read on this is Badiou's The Communist Hypothesis.

jack9 9y ago

Increase in wealth inequality is not the only outcome. There's also the small issues of better resource management, like food per square acre, mpg, medical technology, etc. It's a complex subject insofar as it requires multi-discipline analysis. Is it reasonable that there be a stochastic "good/bad"? It's a good outcome for humanity, but has been tough to survive for the lowest IQ, least motivated, and least wealthy (relative to any given social locality) and tough to thrive/grow from the middle class. If you have a million dollars today, or had the equivalent in 1980, you could have lived off the interest and would have made money all the while till today. Wealth inequality is often the basis for social revolution, so you have to be careful not to let it get too out of control for too long. In relation to dead cultures who went through this process, we've only just begun the initial stages of intolerance toward it. Occupy, bernie 2017, etc have largely been unsuccessful in motivating political or even social change. This was one outcome that was considered in the formation of the Union (an eventual defacto oligarchy) that was meant to be managed by the US political process. The conflict has already been escalated by flawed judgement in the judicial (citizens united).

abyssin 9y ago

It could be bad if you find out that at some point, equality matters more than raw material wealth to the well-being of everyone.

coldtea 9y ago

Serious question: who says it "makes everyone better off"? Fancy new technology is not of much comfort to people who back in the day could buy a house and send their kids to college with a single blue collar income-earner and now can hardly find a job (and can't even dream of sending their kids to college with their puny earnings). >if technology makes everyone better off but increases inequality, is that a bad outcome? Why or why not? Also, humans are not animals to just need food and shelter. For humans it's not just what you have, it's also what you have relative to others. That's why nobody in the US considers a "trailer park" person fortunate just because they don't live in a third world slum or in a cave like people did in 10.000 B.C. -- we consider their position relative to a current baseline. If that gets too out of balance, people have issues.

jstanley 9y ago
If you can't keep up, that's not other people's fault for being better than you.
- Sholmesy 9y ago
  This is such an ignorant statement, it makes my blood boil. People shouldn't be left to die, because they weren't naturally blessed with an adaptability that allows them to be retrained into software engineers. There are a huge number of reasons why someone might not be able to "keep up" in todays world. To write that off as 'being better' is disgusting.
- oblio 9y ago
  Ok, let's say you're right. 1. Are you willing to leave behind, say, 40-50% of the population? Especially since that group could include people such as your parents or your partner or your kids. 2. If you're willing to leave them behind, what are you going to do with them?
  - jstanley 9y ago
    If it's your parent, partner, or kids, (or even if it's not -- it could be anyone) you're welcome to provide for them yourself. You're also welcome to donate to (or even work for!) charities that provide for them. But it's not OK to force everyone else to provide for them.

paulajohnson 9y ago

To answer that you need a way of equating money with "utility" (i.e. the use and/or pleasure that people get from their money). I believe that utility is logarithmic with rate of expenditure. Hence doubling your spending rate gets you a constant increment in utility. This is why we measure pay rises in percent rather than absolute value. Another $100/week would make a huge difference to someone on the breadline, but is lost in the noise for a millionaire. This means that money transferred from a rich person to a poor person will increase utility, because the decrement in the rich person's utility is more than outweighed by the incremenent in the poor person's utility. This difference can also accomodate the transaction costs (i.e. running the IRS) and the "deadweight cost" of decreasing the rich person's incentive to earn more. This would seem to suggest that money should be redistributed so that everyone has the same amount, as that would maximise utility if the total amount of money is constant. But of course that condition isn't true: in a world with zero economic incentives there would be no economic activity. In reality of course such a world would go horribly wrong in any number of ways. So there would seem to be an optimum amount of inequality in a society. Too little, and you destroy incentives to create new stuff, thereby making everyone poorer than they would have been. Too much and you are wasting valuable resources on gold plated baths that would be better spent giving poor people a tolerable standard of living, education, health care etc.

klodolph 9y ago
My guess is it would be more of a logistic curve (S-shaped) rather than logarithmic. $1 does not make you much happier than 1¢, but $50k/year is a big step up from $30k/year. At the low end, at some point you can afford to have a roof over your head, and an extra $20 might mean that you're eating much better for a whole week, or you can buy new shoes, or whatever. But if you're homeless, $20 won't feed you for very long or get you out of the rain for very long. At the mid range, a salary bump from $30k to $50k might make a world of difference if you're trying to raise a family. It might mean that you're not worrying about how you're going to pay for groceries, or it might mean that your kids are always wearing reasonable, well-fitting clothing.
- JamesBarney 9y ago

gadders 9y ago

I think as long as the lowest people have a good standard of living, I would argue it doesn't matter that the richest have a lot more.

timgrahamtech 9y ago

Consider the question in a different context. Suppose I go to a poor village in India and I give each school age kid the equivalent of 10 USD in INR (rupees) but I give one kid the equivalent of 500 USD. Let's suppose the kid who gets more isn't chosen at random. Suppose that I have some criteria for who deserves to get more but that I don't consider who deserves it the most. Everyone got something but one person got significantly more. Is that a bad outcome? Will the kids who got 10 USD feel satisfied knowing that most of the others got the same amount? Will the kid who got 500 USD start to tell the others that they would have gotten 500 USD too if only they had done XYZ? I think this question is really just asking if inequality is bad. It seems to me that inequality is an inherent part of nature in general and the human condition in particular. "Would you really want equality, or are you ok with inequality at some level?" Another way to say equal is homogeneous. To rephrase it, "Would you want everyone to be the same, or do you value diversity instead?" I would propose a different question. If some cause (technology in this case) has the effect of helping everyone but helps some substantially more, is this situation sustainable? Then consider, will everyone's fortunes continue to improve forever? Will some equilibrium in the inequality be established? Will the inequality eventually reach an extreme such that the situation will be worse for certain people or society as a whole? I don't propose answers to these questions. However, I think we can look through history to find examples of how similar scenarios played out in the past.

heisenbit 9y ago

Social mobility. If access to education and management positions are primarily a function of how much money your parents had then over time a ruling class with money but little clue will emerge. It will be all downhill for everyone from then...

myreggaereggae 9y ago

On one dimension, health, there is a body of research suggesting that increasing income inequality is associated with poorer health outcomes at a population level. Here is a recent-ish review by two researchers who have spent a lot of time on this topic: http://www.sciencedirect.com/science/article/pii/S0277953614008399 http://www.sciencedirect.com/science/article/pii/S0277953614...

ookdatnog 9y ago

The economy of a nation produces a certain amount of wealth, and that wealth needs to be distributed in a way that is as efficient and fair as possible (for some notion of fair). Capitalism attempts to distribute the wealth produced by the nation according to the value each individual (and that individual's property) contributes to the economy. There are false positives and false negatives there (people who make more money than their contribution is worth and vice versa), but that's the theory. A fundamental assumption of that system is that almost everyone (apart from the sick or handicapped) can produce enough value to sustain themselves. Even if someone has no capital or no education, we assume that they can trade unskilled labor and that the value of that labor suffices to buy them, at least, the things they need to satisfy their most basic needs. That assumption might become untrue in the future. If that happens, the problem won't be that we don't produce enough value to support these people, but that the current system for distributing that wealth will no longer work.

DarkKomunalec 9y ago
> Capitalism attempts to distribute the wealth produced by the nation according to the value each individual (and that individual's property) contributes to the economy. Where are you getting this from? I am aware of no such attempt. I thought that, in idealized capitalism, everyone gets as much as they are able to convince or legally force others to pay them, and 'value' produced is irrelevant.

jrochkind1 9y ago

How do you know if it's making "everyone" better off or not? What does 'better off' mean, and how do you measure it? If you could demonstrate it made 'everyone' better off, I think it'd be an interesting question to consider. But I suspect many of those at the bottom ends of our actually existing inequality are not so "better off".