8 ms·

I'm surprised wealth distribution wasn't mentioned in the stuff about GDP comparison. I'm no Economist but I was under the impression that wealth is distributed

I'm surprised wealth distribution wasn't mentioned in the stuff about GDP comparison. I'm no Economist but I was under the impression that wealth is distributed more evenly in European countries than in the US. We have rich people here in Europe but the US seems to have lots of insanely rich people and lots of poor people to go with it...

aci 16y ago
This is not only your impression. Look for example at this Wikpedia page: http://en.wikipedia.org/wiki/List_of_countries_by_income_equality http://en.wikipedia.org/wiki/List_of_countries_by_income_equ...
gaius 16y ago
Well, it is more subtle than that, the distinction between wealth and money. For example, the Rothschilds cash fortune isn't comparable to the paper worth of someone like Gates. But arguably in any practical sense, the lifestyle they live, they're wealthier. European ideas about wealth are less about cash and more about (inherited/inheritable) tangible assets and connections to people at a similar level.
- henrikschroder 16y ago
  It's quite striking to read up on the differences in definitions of social classes between Europe and the US. In the US, class is almost entirely about income bracket, in Europe, class is mostly about your social network.
  - gaius 16y ago
    What's also interesting is that (as a culture) we don't stigmatize working class who've become rich, nor upper class who've become poor - but only efforts to cross the class boundary. Perjorative terms like "nouveau riche" and "mockney".
    - iron_ball 16y ago
      we don't stigmatize ... upper class who've become poor Of course we do. Just not any more than other poor people.
      - gaius 16y ago
        There is a world of difference between the social status of the grandchild of an aristo who gambled away the family fortune, and a chav single mother. The former has access to contacts, a peer group, a social network (call it what you will) and even people they deal with every day will treat them with more respect. This at least is nothing to do with actual spending power. But our hypothetical ex-aristo would be rejected immediately if she tried to become working-class (tho' probably she could become a chav).
  - arethuza 16y ago
    In my experience, class in the UK is primarily determined by who your parents were, not by who you know - with there being notable regional differences in the permeability of the class distinctions.
    - gaius 16y ago
      It's certainly a factor, but where you went to school is probably more significant. Or more accurately, where you picked up your accent.
arethuza 16y ago
Norway is an interesting example - one of the highest per capita GDP figures but unusual in that the distribution of incomes is very narrow e.g. http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspondent/4223148.stm http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspon...
- gyardley 16y ago
  Norway is a very lovely country but I doubt there's a sustainable model there for the rest of the world to follow, since we all can't become the world's third-largest exporter of oil.
  - mike-cardwell 16y ago
    It depends which model you're looking at. Fair wealth distribution is a sustainable model. If Norway behaved like the US, most of the money from oil would probably go to a small handful of privileged people.
    - gyardley 16y ago
      I've always operated under the assumption that equal wealth distribution ('fair' is a loaded word) has an economic cost, since inequalities in wealth (+ economic freedom) encourage economy-expanding activities like entrepreneurship. Therefore I've assumed that relatively equal wealth distribution is only sustainable when there's a whole lot of wealth to go around. I could be wrong, though. Can anyone come up with an example of voluntary equal wealth distribution in a country relatively lacking in resources? (I say 'voluntary' because in poorer countries this sort of scheme has usually been enforced by dictatorships.)
      - leot 16y ago
        My version: I've always operated under the assumption that unequal wealth distribution ('fair' is a loaded word) has an economic cost, since equalities in wealth (+ economic freedom) encourage economy-expanding activities like entrepreneurship. [removed the last point as it is fair one on its own, but is not entailed from the previous statements.] I could be wrong, though. Can anyone come up with an example of voluntary equal wealth distribution in a country relatively lacking in resources? There is a game-theoretic problem with voluntary wealth distribution. I'm happy to give up my income if all my peers do, but I'm really not inclined to do this if my peers don't. Anyhow, the Anglo idea-sphere seems to have a glut of free-market-is-the-best notions, and a vacuum where the counter-arguments lie. Here's one, for you, then: if there is more equal wealth distribution, then more people have more money (by definition), which almost always means that more people are better educated and have more economic opportunity. This means more people are free to invent stuff, to start businesses, and to generally innovate. It takes a particular level of education and economic opportunity to have the human capacity to support an Apple or a Google -- a level of education that is possessed by, conservatively, less than 20% of the population. Much of the American population is simply not equipped, by age 16, to have said opportunity. Imagine, then, what might happen if we doubled the size the base of people that could start/support an Apple or a Google -- wouldn't this lead to higher GDP and overall wealth? The parent's inequality=economically-good assumes that the population's entrepreneurial spirit is static, and not affected by means or opportunity (while, granted, one can succeed in spite of a lack of opportunity, it does not follow that added opportunity will not encourage entrepreneurship or innovation). My contention, thus, is: more equality ==> a greater number of empowered people ==> more and better businesses and economic activity ==> more wealth.

aci 16y ago

This is not only your impression. Look for example at this Wikpedia page: http://en.wikipedia.org/wiki/List_of_countries_by_income_equality http://en.wikipedia.org/wiki/List_of_countries_by_income_equ...

gaius 16y ago

Well, it is more subtle than that, the distinction between wealth and money. For example, the Rothschilds cash fortune isn't comparable to the paper worth of someone like Gates. But arguably in any practical sense, the lifestyle they live, they're wealthier. European ideas about wealth are less about cash and more about (inherited/inheritable) tangible assets and connections to people at a similar level.

henrikschroder 16y ago
It's quite striking to read up on the differences in definitions of social classes between Europe and the US. In the US, class is almost entirely about income bracket, in Europe, class is mostly about your social network.
- gaius 16y ago
  What's also interesting is that (as a culture) we don't stigmatize working class who've become rich, nor upper class who've become poor - but only efforts to cross the class boundary. Perjorative terms like "nouveau riche" and "mockney".
  - iron_ball 16y ago
    we don't stigmatize ... upper class who've become poor Of course we do. Just not any more than other poor people.
    - gaius 16y ago
      There is a world of difference between the social status of the grandchild of an aristo who gambled away the family fortune, and a chav single mother. The former has access to contacts, a peer group, a social network (call it what you will) and even people they deal with every day will treat them with more respect. This at least is nothing to do with actual spending power. But our hypothetical ex-aristo would be rejected immediately if she tried to become working-class (tho' probably she could become a chav).
- arethuza 16y ago
  In my experience, class in the UK is primarily determined by who your parents were, not by who you know - with there being notable regional differences in the permeability of the class distinctions.
  - gaius 16y ago
    It's certainly a factor, but where you went to school is probably more significant. Or more accurately, where you picked up your accent.

arethuza 16y ago

Norway is an interesting example - one of the highest per capita GDP figures but unusual in that the distribution of incomes is very narrow e.g. http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspondent/4223148.stm http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspon...

gyardley 16y ago
Norway is a very lovely country but I doubt there's a sustainable model there for the rest of the world to follow, since we all can't become the world's third-largest exporter of oil.
- mike-cardwell 16y ago
  It depends which model you're looking at. Fair wealth distribution is a sustainable model. If Norway behaved like the US, most of the money from oil would probably go to a small handful of privileged people.
  - gyardley 16y ago
    I've always operated under the assumption that equal wealth distribution ('fair' is a loaded word) has an economic cost, since inequalities in wealth (+ economic freedom) encourage economy-expanding activities like entrepreneurship. Therefore I've assumed that relatively equal wealth distribution is only sustainable when there's a whole lot of wealth to go around. I could be wrong, though. Can anyone come up with an example of voluntary equal wealth distribution in a country relatively lacking in resources? (I say 'voluntary' because in poorer countries this sort of scheme has usually been enforced by dictatorships.)
    - leot 16y ago
      My version: I've always operated under the assumption that unequal wealth distribution ('fair' is a loaded word) has an economic cost, since equalities in wealth (+ economic freedom) encourage economy-expanding activities like entrepreneurship. [removed the last point as it is fair one on its own, but is not entailed from the previous statements.] I could be wrong, though. Can anyone come up with an example of voluntary equal wealth distribution in a country relatively lacking in resources? There is a game-theoretic problem with voluntary wealth distribution. I'm happy to give up my income if all my peers do, but I'm really not inclined to do this if my peers don't. Anyhow, the Anglo idea-sphere seems to have a glut of free-market-is-the-best notions, and a vacuum where the counter-arguments lie. Here's one, for you, then: if there is more equal wealth distribution, then more people have more money (by definition), which almost always means that more people are better educated and have more economic opportunity. This means more people are free to invent stuff, to start businesses, and to generally innovate. It takes a particular level of education and economic opportunity to have the human capacity to support an Apple or a Google -- a level of education that is possessed by, conservatively, less than 20% of the population. Much of the American population is simply not equipped, by age 16, to have said opportunity. Imagine, then, what might happen if we doubled the size the base of people that could start/support an Apple or a Google -- wouldn't this lead to higher GDP and overall wealth? The parent's inequality=economically-good assumes that the population's entrepreneurial spirit is static, and not affected by means or opportunity (while, granted, one can succeed in spite of a lack of opportunity, it does not follow that added opportunity will not encourage entrepreneurship or innovation). My contention, thus, is: more equality ==> a greater number of empowered people ==> more and better businesses and economic activity ==> more wealth.