7 ms·

Is it possible for everyone’s wealth to increase? I think they might be assuming this is not possible and there if richest wealth increases by this much it had

Is it possible for everyone’s wealth to increase? I think they might be assuming this is not possible and there if richest wealth increases by this much it had to come from the rest?

kachurovskiy 9y ago
Rich people tend to have most of their worth in stock. In theory, assuming your stock got more expensive, you get richer without anyone in particular getting poorer.
- walterbell 9y ago
  Inflation = everyone in cash got poorer
  - pdkl95 9y ago
    Or. everyone with debt - which is usually a very large portion of the population - had their burden reduced. edit: Ability to pay grows with inflation, by definition. Unless you have a particularly unusual type of debt, the principle is constant and the interest is based on the remaining principle and is therefor a pre-inflation value. Wages grow in absolute terms (even though their purchasing power is otherwise constant), so the debt is easier to pay off.
    - walterbell 9y ago
      Along with their ability to repay their debt, so that's a wash.
      - deleted 9y ago
        [deleted]
  - jcmoscon 9y ago
    Not if you have bitcoins, right?
- jumsdogpetter 9y ago
  The theory is naive, dismissive, and wrong. Stock value increases are coming from optimizations within companies that reduce employee benefits and compensation. On the consumer side of things, profits also come from taking advantage of deregulation, lowering the quality and safety of consumer products and services. Executive leadership and investors are pocketing gains made from making everyone else's lives worse. Getting richer has a strong relationship with making others poorer.
  - newmanships 9y ago
    Are you saying stock value increases only come from reducing employee benefits and compensation or from lowering the quality and safety of products and services? Seems like that is simply not true across the board. If a company sells say software they could easily grow revenue and profits without changing their product or reducing employee benefits and compensation. Their earnings would be higher and their stock would go up.
  - ericd 9y ago
    How much of this opinion is coming from being involved in the management of companies vs news articles tuned to generate outrage so that they can generate clicks?
    - jumsdogpetter 9y ago
      How much of your denial comes from benefiting from the immiseration of the poor?
      - ericd 9y ago
        I'm serious. Do you have first hand knowledge of what you speak, or are you just looking for someone to be angry at? Also, looking at your comment history, you've literally only ever commented on the misery of the proletariat and related topics, which makes me suspect this is an astroturfing account.
  - AnimalMuppet 9y ago
gbacon 9y ago
The notion that wealth is a fixed-size pie is central to the long-debunked economic error known as mercantilism.
foobarian 9y ago
In real terms this could happen if productivity increased, and was able to lead to increased standard of living for everyone. This probably did happen for some large subset of the population, by some definition of "standard of living."
poke111 9y ago
The central idea of capitalism is that voluntary exchange enriches both parties. So the answer to your first question is yes.
- sametmax 9y ago
  This assumes the exchange is symmetric, and that enrichment only happens with exchanges. Neither of these are true.
  - wskinner 9y ago
    It doesn’t have to be symmetric. If there is $2 consumer and $4 producer surplus, both parties benefit. And just because enrichment, as you call it, can happen other ways than exchange, does not mean it doesn’t happen via exchange too.
    - dragonwriter 9y ago
      If it is asymmetric, the superficially apparent mutual gain may be illusory, because—while many people think for moral or aesthetic reasons that this should not be the case—there is enormous empirical evidence that the actual experience of utility related to material position is very strongly driven by relative material position, which is often far more significant than absolute material position.
      - Banthum 9y ago
        Parent is saying that it's better if everyone gets richer, even if some get more richer than others. So you're saying that it would be better if everyone was poorer individually, as long as they were more equally poor?
        grasshopperpurp 9y ago
        >So you're saying that it would be better if everyone was poorer individually, as long as they were more equally poor? Why are you creating this either/or? Are you proposing that if we don't allow people like Gates and the Kochs to hoard billions of dollars that everyone will be poorer individually?
ghostbrainalpha 9y ago
Yes it is possible for everyone's wealth to increase. In the year 1900 Global GDP was 1 Trillion. Today it is 77 Trillion. https://en.wikipedia.org/wiki/Gross_world_product https://en.wikipedia.org/wiki/Gross_world_product In Layman's the Global Pie is growing. The number of people living in extreme poverty has fallen DRASTICALLY over the last 25 years. https://twitter.com/humanprogress/status/913901718823489538 https://twitter.com/humanprogress/status/913901718823489538 So the people with the smallest piece of the pie are slowly getting a larger piece, but the people who already have the biggest piece of pie are getting even bigger pieces faster. But because the pie is growing, it doesn't mean that their larger piece is making someone else get a smaller piece. The only people who have a proportionally smaller piece than they used to are in the middle class. Which is what happens when first world work more closely with developing nations. Taking more people out of extreme poverty but putting slight downward pressure on the middle class.
- mtgx 9y ago
  Even if it did increase, most of that increase is just inflation anyway. And it's usually the wealthy that benefit from inflation (at least more than regular people do).
  - JumpCrisscross 9y ago
    > it's usually the wealthy that benefit from inflation Inflation is a regressive feature of modern currencies. It transfers wealth from lenders to borrowers and away from investors. The degree to which it does so is a function of the amount of wealth one has.
  - ghostbrainalpha 9y ago
    Compare the "regular" person of today to the "regular" person of 50 years ago. Is it easier or harder to afford basic foodstuffs? Do they eat out (luxury) more or less? If they own a home, is it larger or the same size? Who travels more? Who has better healthcare? Who spends more on entertainment? How much do they spend on the family pet? Who spent more time furthering their education? All of these are measures of wealth, and the modern "regular" person would be wealthier in every one of these categories. And that's not even factoring in advances in technology that make the quality of life of a person better even if there share of societal wealth goes down.
olalonde 9y ago
Yes, it is definitely possible and expected. Your line of reasoning is a pretty common one and is sometimes referred to as the "zero-sum fallacy" or "fixed pie fallacy"[0]. [0] http://www.aei.org/publication/the-fixed-pie-fallacy/ http://www.aei.org/publication/the-fixed-pie-fallacy/
obastani 9y ago
As many other commenters have pointed out, it is possible for net global wealth to increase (e.g., the increase in total real GDP). As far as I understand, the main reason this is possible is the development of new "technology" -- in the very general, economic sense of the word technology [0], which includes anything that increases the productivity of a single worker; this can include everything from new technology in the traditional sense to new processes (e.g., agile vs. waterfall for software development, or more optimal supply chains) and investment in infrastructure (e.g., better road networks). For example, a single farmer today can not only produce many times more crop compared to a farmer 100 years ago, but also safely and efficiently distribute this produce to consumers across the globe. In general, assuming everyone in the economy works equally hard, the total production (i.e., the global net wealth) can increase as long as technology is increasing. [0] https://en.wikipedia.org/wiki/Production_function https://en.wikipedia.org/wiki/Production_function
ericd 9y ago
If I fix your bike, and in exchange, you fix my bike, we're both richer in material terms than we were before.
eeZah7Ux 9y ago
> Is it possible for everyone’s wealth to increase? Numerically, yes. Psychologically and socially it's completely different. As inequality rises, people whose wealth increases more slowly are effectively poorer in relative terms.

Is it possible for everyone’s wealth to increase? I think they might be assuming this is not possible and there if richest wealth increases by this much it had to come from the rest?

kachurovskiy 9y ago

Rich people tend to have most of their worth in stock. In theory, assuming your stock got more expensive, you get richer without anyone in particular getting poorer.

walterbell 9y ago
Inflation = everyone in cash got poorer
- pdkl95 9y ago
  Or. everyone with debt - which is usually a very large portion of the population - had their burden reduced. edit: Ability to pay grows with inflation, by definition. Unless you have a particularly unusual type of debt, the principle is constant and the interest is based on the remaining principle and is therefor a pre-inflation value. Wages grow in absolute terms (even though their purchasing power is otherwise constant), so the debt is easier to pay off.
  - walterbell 9y ago
    Along with their ability to repay their debt, so that's a wash.
    - deleted 9y ago
      [deleted]
- jcmoscon 9y ago
  Not if you have bitcoins, right?
jumsdogpetter 9y ago
The theory is naive, dismissive, and wrong. Stock value increases are coming from optimizations within companies that reduce employee benefits and compensation. On the consumer side of things, profits also come from taking advantage of deregulation, lowering the quality and safety of consumer products and services. Executive leadership and investors are pocketing gains made from making everyone else's lives worse. Getting richer has a strong relationship with making others poorer.
- newmanships 9y ago
  Are you saying stock value increases only come from reducing employee benefits and compensation or from lowering the quality and safety of products and services? Seems like that is simply not true across the board. If a company sells say software they could easily grow revenue and profits without changing their product or reducing employee benefits and compensation. Their earnings would be higher and their stock would go up.
- ericd 9y ago
  How much of this opinion is coming from being involved in the management of companies vs news articles tuned to generate outrage so that they can generate clicks?
  - jumsdogpetter 9y ago
    How much of your denial comes from benefiting from the immiseration of the poor?
    - ericd 9y ago
      I'm serious. Do you have first hand knowledge of what you speak, or are you just looking for someone to be angry at? Also, looking at your comment history, you've literally only ever commented on the misery of the proletariat and related topics, which makes me suspect this is an astroturfing account.
- AnimalMuppet 9y ago

gbacon 9y ago

The notion that wealth is a fixed-size pie is central to the long-debunked economic error known as mercantilism.

foobarian 9y ago

In real terms this could happen if productivity increased, and was able to lead to increased standard of living for everyone. This probably did happen for some large subset of the population, by some definition of "standard of living."

poke111 9y ago

The central idea of capitalism is that voluntary exchange enriches both parties. So the answer to your first question is yes.

sametmax 9y ago
This assumes the exchange is symmetric, and that enrichment only happens with exchanges. Neither of these are true.
- wskinner 9y ago
  It doesn’t have to be symmetric. If there is $2 consumer and $4 producer surplus, both parties benefit. And just because enrichment, as you call it, can happen other ways than exchange, does not mean it doesn’t happen via exchange too.
  - dragonwriter 9y ago
    If it is asymmetric, the superficially apparent mutual gain may be illusory, because—while many people think for moral or aesthetic reasons that this should not be the case—there is enormous empirical evidence that the actual experience of utility related to material position is very strongly driven by relative material position, which is often far more significant than absolute material position.
    - Banthum 9y ago
      Parent is saying that it's better if everyone gets richer, even if some get more richer than others. So you're saying that it would be better if everyone was poorer individually, as long as they were more equally poor?
      - grasshopperpurp 9y ago
        >So you're saying that it would be better if everyone was poorer individually, as long as they were more equally poor? Why are you creating this either/or? Are you proposing that if we don't allow people like Gates and the Kochs to hoard billions of dollars that everyone will be poorer individually?

ghostbrainalpha 9y ago

Yes it is possible for everyone's wealth to increase. In the year 1900 Global GDP was 1 Trillion. Today it is 77 Trillion. https://en.wikipedia.org/wiki/Gross_world_product https://en.wikipedia.org/wiki/Gross_world_product In Layman's the Global Pie is growing. The number of people living in extreme poverty has fallen DRASTICALLY over the last 25 years. https://twitter.com/humanprogress/status/913901718823489538 https://twitter.com/humanprogress/status/913901718823489538 So the people with the smallest piece of the pie are slowly getting a larger piece, but the people who already have the biggest piece of pie are getting even bigger pieces faster. But because the pie is growing, it doesn't mean that their larger piece is making someone else get a smaller piece. The only people who have a proportionally smaller piece than they used to are in the middle class. Which is what happens when first world work more closely with developing nations. Taking more people out of extreme poverty but putting slight downward pressure on the middle class.

mtgx 9y ago
Even if it did increase, most of that increase is just inflation anyway. And it's usually the wealthy that benefit from inflation (at least more than regular people do).
- JumpCrisscross 9y ago
  > it's usually the wealthy that benefit from inflation Inflation is a regressive feature of modern currencies. It transfers wealth from lenders to borrowers and away from investors. The degree to which it does so is a function of the amount of wealth one has.
- ghostbrainalpha 9y ago
  Compare the "regular" person of today to the "regular" person of 50 years ago. Is it easier or harder to afford basic foodstuffs? Do they eat out (luxury) more or less? If they own a home, is it larger or the same size? Who travels more? Who has better healthcare? Who spends more on entertainment? How much do they spend on the family pet? Who spent more time furthering their education? All of these are measures of wealth, and the modern "regular" person would be wealthier in every one of these categories. And that's not even factoring in advances in technology that make the quality of life of a person better even if there share of societal wealth goes down.

olalonde 9y ago

Yes, it is definitely possible and expected. Your line of reasoning is a pretty common one and is sometimes referred to as the "zero-sum fallacy" or "fixed pie fallacy"[0]. [0] http://www.aei.org/publication/the-fixed-pie-fallacy/ http://www.aei.org/publication/the-fixed-pie-fallacy/

obastani 9y ago

As many other commenters have pointed out, it is possible for net global wealth to increase (e.g., the increase in total real GDP). As far as I understand, the main reason this is possible is the development of new "technology" -- in the very general, economic sense of the word technology [0], which includes anything that increases the productivity of a single worker; this can include everything from new technology in the traditional sense to new processes (e.g., agile vs. waterfall for software development, or more optimal supply chains) and investment in infrastructure (e.g., better road networks). For example, a single farmer today can not only produce many times more crop compared to a farmer 100 years ago, but also safely and efficiently distribute this produce to consumers across the globe. In general, assuming everyone in the economy works equally hard, the total production (i.e., the global net wealth) can increase as long as technology is increasing. [0] https://en.wikipedia.org/wiki/Production_function https://en.wikipedia.org/wiki/Production_function

ericd 9y ago

If I fix your bike, and in exchange, you fix my bike, we're both richer in material terms than we were before.

eeZah7Ux 9y ago

> Is it possible for everyone’s wealth to increase? Numerically, yes. Psychologically and socially it's completely different. As inequality rises, people whose wealth increases more slowly are effectively poorer in relative terms.