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I appreciate this suggestion. When reading this I thought "Why do I care if the 1% are working or rentiers?" The outcome, being a growing class of marginalized

I appreciate this suggestion. When reading this I thought "Why do I care if the 1% are working or rentiers?" The outcome, being a growing class of marginalized people who lack equality of income, opportunity, and meaning is the same whether these people are rentiers or not. I'm reminded of this excerpt from a recent article on Dollar General stores that was posted to HN. "Essentially what the dollar stores are betting on in a large way is that we are going to have a permanent underclass in America. It’s based on the concept that the jobs went away, and the jobs are never coming back, and that things aren’t going to get better in any of these places." https://www.bloomberg.com/news/features/2017-10-11/dollar-general-hits-a-gold-mine-in-rural-america https://www.bloomberg.com/news/features/2017-10-11/dollar-ge...

ameister14 9y ago
I care because landlords are a type of business that can be passed on whole to children and allows for the creation of hereditary wealth and hereditary wealth maintenance without risk. If the profitability of a business is mostly because of a single person working there who takes most of the profit, when that person dies their children will not be able to easily maintain that income and so are more likely not to be hereditary members of an upper class.
- gbacon 9y ago
  What data do you have to support your concern about creation of hereditary wealth? Why do you believe that property management is somehow special as compared with other businesses whose profitability is tied to a single person?
  - ameister14 9y ago
    >What data do you have to support your concern about creation of hereditary wealth? The history of Ireland, France, and the UK to start. >Why do you believe that property management is somehow special as compared with other businesses whose profitability is tied to a single person? It's quite simple. If you own land and other people manage it, you just collect a paycheck from the land without any impact on its profitability. You can die and pass it to your kids and the profit stays the same and goes to the same place. If you own a company that is completely dependent on you for profit, when you die the company stops being profitable. If you pass it to your kids and they are incompetent, they eventually lose the business.
    - kodablah 9y ago
      > It's quite simple. If you own land and other people manage it, you just collect a paycheck from the land without any impact on its profitability. In many places in the US, due to property taxes and other things, land is a burden that you will spend your paycheck on, not collect it from (until you sell). Granted if you are using the land for something profitable you might collect on it, but rarely is that use passive (often only if you have mineral rights, even e.g. landlords in the multifamily industry have to work to maintain livability conditions). Using others to manage the land rarely maintains an inherent value to keep you wealthy, at least in the US.
      - EADGBE 9y ago
        > Using others to manage the land rarely maintains an inherent value to keep you wealthy, at least in the US. Property maintenance contracts aren't nearly as expensive as you might think they are. Even with a mortgage, property taxes, maintenance cost and equipment upgrades, one can still come out on top with a profit margin. *This experience is based off of single-family units, though I may have misunderstood your "land".
        kodablah 9y ago
        > one can still come out on top with a profit margin Agreed, but that's rarely extreme wealth. The GP seems to point towards a more feudal situation which, at least on this side of the pond, doesn't seem to exist. And while land may be a primary inheritance mechanism, most significant gains are realized only after sale.
        ameister14 9y ago
        That's not accurate in my experience. I know about a dozen families that have multi-generational wealth maintained in large part through physical property holding and rent/leasing. They are all in cities, though; Cincinnati, Miami, NYC and LA - perhaps that's the difference?
  - grasshopperpurp 9y ago
    >Inheritance Matters. An estimated 35 to 45 percent of wealth is inherited rather than self-made, according to Kopczuk’s review of the literature. Not addressing the property management point, but this (from 2015) addresses hereditary wealth https://www.brookings.edu/blog/social-mobility-memos/2015/01/30/wealth-inheritance-and-social-mobility/ https://www.brookings.edu/blog/social-mobility-memos/2015/01...
  - heymijo 9y ago
    Thanks for asking this gbacon. It's a question that came to mind for me as well and one that ameister's big picture response below satisfies.
- heymijo 9y ago
  Hi ameister, I've read this comment and your sub-comments. I agree with your assertions. I am ruminating on ideas your comments have sparked and questions they have raised, but as I go to type them I can't clearly communicate them yet. I will say, I hope my question that you responded to did not prevent you from taking in the rest of my comment. The question was not meant to dismiss rentiers, but to remind myself that the inequality I am aware of is a problem that goes far beyond how the 1% accumulate their wealth. <----this brings up one question of timescales
eevilspock 9y ago
> "Why do I care if the 1% are working or rentiers?" Because fairness matters. We are social beings and our well-being is connected to the nature of our relationships and the fairness of our society. Once basic needs are met, most people would choose a poorer but fairer and more loving community than a society richer through cold utilitarianism. Many if not most people who choose the opposite aren't really happy. And there are a host of other problems with such inequality. For example, democracy is undermined (money is power), and the idea of a meritocracy is likewise belied: https://news.ycombinator.com/item?id=15865876 https://news.ycombinator.com/item?id=15865876 (see my 9-point sub-answer).
- heymijo 9y ago
  Hello eevilspock. Fairness seems to be the driving point behind your comment here and your linked 9-point sub-answer about the idea of a meritocracy. I read your comment here two ways: 1. Being a rentier is more unfair than not. and/or 2. Accumulated wealth beyond that needed to meet basic needs is unfair (whether acquired via rent or not). ^This is me parsing your comment to hopefully reply to the point(s) you wanted to make. If I misinterpreted, please correct me. On the merits of, I think there is a great deal of agreement and overlap between what you wrote and this line that I wrote about there being inequality of income/opportunity/meaning between the 1% (whether rentiers or not) and the 99%.
  - eevilspock 9y ago
    Yes, I believe we are likely in agreement :) Though what I'd say about "accumulated wealth" isn't exactly as you put it. If there are two people of equal means, and one chooses to work all summer growing and storing tasty food for the winter, and the other chooses to play all summer and survive off of tubers all winter, this is fair. This is freedom of choice. But this sort of fair difference accounts for only a small fraction of the difference in income and wealth in our world today. The authors of the OP also have similar concerns, once you read past the first few paragraphs.
- chiefalchemist 9y ago
  "...Once basic needs are met, most people would choose a poorer but fairer and more loving community than a society richer through cold utilitarianism. Many if not most people who choose the opposite aren't really happy..." Original commenter here - But I don't see how this is at all true when current reality, if not history, tells us the exact opposite. For for democracy being undermined. Well, this is a language problem we keep making. That is, if it has been undermined to that extent then it is no longer a democracy. I'd add that it might not have been one in the first place. That is, something inappropriate must have allowed the undermining.

ameister14 9y ago

I care because landlords are a type of business that can be passed on whole to children and allows for the creation of hereditary wealth and hereditary wealth maintenance without risk. If the profitability of a business is mostly because of a single person working there who takes most of the profit, when that person dies their children will not be able to easily maintain that income and so are more likely not to be hereditary members of an upper class.

gbacon 9y ago
What data do you have to support your concern about creation of hereditary wealth? Why do you believe that property management is somehow special as compared with other businesses whose profitability is tied to a single person?
- ameister14 9y ago
  >What data do you have to support your concern about creation of hereditary wealth? The history of Ireland, France, and the UK to start. >Why do you believe that property management is somehow special as compared with other businesses whose profitability is tied to a single person? It's quite simple. If you own land and other people manage it, you just collect a paycheck from the land without any impact on its profitability. You can die and pass it to your kids and the profit stays the same and goes to the same place. If you own a company that is completely dependent on you for profit, when you die the company stops being profitable. If you pass it to your kids and they are incompetent, they eventually lose the business.
  - kodablah 9y ago
    > It's quite simple. If you own land and other people manage it, you just collect a paycheck from the land without any impact on its profitability. In many places in the US, due to property taxes and other things, land is a burden that you will spend your paycheck on, not collect it from (until you sell). Granted if you are using the land for something profitable you might collect on it, but rarely is that use passive (often only if you have mineral rights, even e.g. landlords in the multifamily industry have to work to maintain livability conditions). Using others to manage the land rarely maintains an inherent value to keep you wealthy, at least in the US.
    - EADGBE 9y ago
      > Using others to manage the land rarely maintains an inherent value to keep you wealthy, at least in the US. Property maintenance contracts aren't nearly as expensive as you might think they are. Even with a mortgage, property taxes, maintenance cost and equipment upgrades, one can still come out on top with a profit margin. *This experience is based off of single-family units, though I may have misunderstood your "land".
      - kodablah 9y ago
        > one can still come out on top with a profit margin Agreed, but that's rarely extreme wealth. The GP seems to point towards a more feudal situation which, at least on this side of the pond, doesn't seem to exist. And while land may be a primary inheritance mechanism, most significant gains are realized only after sale.
        ameister14 9y ago
        That's not accurate in my experience. I know about a dozen families that have multi-generational wealth maintained in large part through physical property holding and rent/leasing. They are all in cities, though; Cincinnati, Miami, NYC and LA - perhaps that's the difference?
- grasshopperpurp 9y ago
  >Inheritance Matters. An estimated 35 to 45 percent of wealth is inherited rather than self-made, according to Kopczuk’s review of the literature. Not addressing the property management point, but this (from 2015) addresses hereditary wealth https://www.brookings.edu/blog/social-mobility-memos/2015/01/30/wealth-inheritance-and-social-mobility/ https://www.brookings.edu/blog/social-mobility-memos/2015/01...
- heymijo 9y ago
  Thanks for asking this gbacon. It's a question that came to mind for me as well and one that ameister's big picture response below satisfies.
heymijo 9y ago
Hi ameister, I've read this comment and your sub-comments. I agree with your assertions. I am ruminating on ideas your comments have sparked and questions they have raised, but as I go to type them I can't clearly communicate them yet. I will say, I hope my question that you responded to did not prevent you from taking in the rest of my comment. The question was not meant to dismiss rentiers, but to remind myself that the inequality I am aware of is a problem that goes far beyond how the 1% accumulate their wealth. <----this brings up one question of timescales

eevilspock 9y ago

> "Why do I care if the 1% are working or rentiers?" Because fairness matters. We are social beings and our well-being is connected to the nature of our relationships and the fairness of our society. Once basic needs are met, most people would choose a poorer but fairer and more loving community than a society richer through cold utilitarianism. Many if not most people who choose the opposite aren't really happy. And there are a host of other problems with such inequality. For example, democracy is undermined (money is power), and the idea of a meritocracy is likewise belied: https://news.ycombinator.com/item?id=15865876 https://news.ycombinator.com/item?id=15865876 (see my 9-point sub-answer).

heymijo 9y ago
Hello eevilspock. Fairness seems to be the driving point behind your comment here and your linked 9-point sub-answer about the idea of a meritocracy. I read your comment here two ways: 1. Being a rentier is more unfair than not. and/or 2. Accumulated wealth beyond that needed to meet basic needs is unfair (whether acquired via rent or not). ^This is me parsing your comment to hopefully reply to the point(s) you wanted to make. If I misinterpreted, please correct me. On the merits of, I think there is a great deal of agreement and overlap between what you wrote and this line that I wrote about there being inequality of income/opportunity/meaning between the 1% (whether rentiers or not) and the 99%.
- eevilspock 9y ago
  Yes, I believe we are likely in agreement :) Though what I'd say about "accumulated wealth" isn't exactly as you put it. If there are two people of equal means, and one chooses to work all summer growing and storing tasty food for the winter, and the other chooses to play all summer and survive off of tubers all winter, this is fair. This is freedom of choice. But this sort of fair difference accounts for only a small fraction of the difference in income and wealth in our world today. The authors of the OP also have similar concerns, once you read past the first few paragraphs.
chiefalchemist 9y ago
"...Once basic needs are met, most people would choose a poorer but fairer and more loving community than a society richer through cold utilitarianism. Many if not most people who choose the opposite aren't really happy..." Original commenter here - But I don't see how this is at all true when current reality, if not history, tells us the exact opposite. For for democracy being undermined. Well, this is a language problem we keep making. That is, if it has been undermined to that extent then it is no longer a democracy. I'd add that it might not have been one in the first place. That is, something inappropriate must have allowed the undermining.