5 ms·

inequality is rising because some people are simply more skilled than others.

_delirium 9y ago
More data supports the hypothesis that inequality is rising because some people have more money than others, and currently it's easier to earn significant returns from capital than from labor. Of course, not everyone agrees, but Piketty et al have some evidence for the hypothesis. Is there anyone with data-driven support for the claim that changes in overall inequality are primarily driven by divergence in high-skill vs. low-skill labor incomes? To be clear, I obviously know there is a difference in high-skill vs. low-skill labor incomes, but it's not clear its magnitude is enough to account for the changes seen in macro-scale indicators like the Gini index.
- adynatos 9y ago
  and that money, where did it come from? look at fortune 500, what percentage inherited it? what percentage inherited it from someone further down the ancestral line than their parents? rich people without skill will squander their fortunes.
- edanm 9y ago
  Interesting question. I'm not sure, but there have been a lot of economists who disagree with Piketty and written about where he goes wrong. I assume that this implicitly proves the other direction, that capital growth isn't larger than wage growth, or whatever, so it might be a good idea to look there.
ghostcluster 9y ago
or the gains for being lucky and fortuitous are more and more extreme, and the cost of being left out is more bleak. The Economist just ran a profile on Chris Hughes, Mark Zuckerberg’s second-year roommate, who, by virtue of being his roommate, lucked into a huge net worth from the early stage creation of Facebook. https://www.economist.com/news/books-and-arts/21737016-and-decides-life-unfair-titan-facebook-considers-his-good-fortune https://www.economist.com/news/books-and-arts/21737016-and-d...
crc32 9y ago
OK - would you agree that this presents us with an ethical problem? How about a societal/practical problem? Is an unequal society sustainable? What actions can be taken to mitigate the ethical and practical problems presented by inequality?
- adynatos 9y ago
  unequal society was sustainable exactly until now. there is no evidence whatsoever that it won't still be.
  - pbhjpbhj 9y ago
    If you consider the unnecessary death and suffering of other people, and major environment impacts, to be "sustainable" then yes, unequal society has been entirely sustainable. In practice the inequality has lead to massive unrest (eg civil war), disease, and famine time and again. You can't honestly look back at history and consider that inequality has been anything other than a cause of immeasurable misery.
    - adynatos 9y ago
      from my point of view all those deaths and massive unrests resulted from various groups trying to do away with inequality, usually by taking what's not theirs.
      - AnimalMuppet 9y ago
        True, but... Lenin (for example) didn't walk into a prosperous, free, egalitarian country, and persuade everyone to rise up against the existing system. The inequality, poverty, and misery gave rise to people willing to listen to Lenin, and to try what he was selling. I'm not excusing Lenin. I'm not apologizing for him. But without the existing inequality, he would have gotten no traction.
        adynatos 9y ago
chopin 9y ago
That could only be said with some certainty if we had equal opportunity. Most western societies are far off the mark in that regard.
- adynatos 9y ago
  i agree. free market capitalism should replace current corporatism. but that's currently impossible - there will always be lobbying and special treatments while the goverment is able to interfere with the market.
mdemare 9y ago
"Some people are more skilled than others, therefore inequality exists" - sure. But why would that predict _rising_ inequality?
- adynatos 9y ago
  because people continue to live. those skilled in making money make more money, those not - lose more money.
- AnimalMuppet 9y ago
  Paul Graham says that technology is an amplifier. And technology has been giving increasing leverage over time.
ska 9y ago
what research can you cite supporting this hypothesis?
- adynatos 9y ago
  Rothbard, Hayek, Hoppe, et al.
  - deleted 9y ago
    [deleted]

More data supports the hypothesis that inequality is rising because some people have more money than others, and currently it's easier to earn significant returns from capital than from labor. Of course, not everyone agrees, but Piketty et al have some evidence for the hypothesis. Is there anyone with data-driven support for the claim that changes in overall inequality are primarily driven by divergence in high-skill vs. low-skill labor incomes? To be clear, I obviously know there is a difference in high-skill vs. low-skill labor incomes, but it's not clear its magnitude is enough to account for the changes seen in macro-scale indicators like the Gini index.

adynatos 9y ago
and that money, where did it come from? look at fortune 500, what percentage inherited it? what percentage inherited it from someone further down the ancestral line than their parents? rich people without skill will squander their fortunes.
edanm 9y ago
Interesting question. I'm not sure, but there have been a lot of economists who disagree with Piketty and written about where he goes wrong. I assume that this implicitly proves the other direction, that capital growth isn't larger than wage growth, or whatever, so it might be a good idea to look there.

ghostcluster 9y ago

or the gains for being lucky and fortuitous are more and more extreme, and the cost of being left out is more bleak. The Economist just ran a profile on Chris Hughes, Mark Zuckerberg’s second-year roommate, who, by virtue of being his roommate, lucked into a huge net worth from the early stage creation of Facebook. https://www.economist.com/news/books-and-arts/21737016-and-decides-life-unfair-titan-facebook-considers-his-good-fortune https://www.economist.com/news/books-and-arts/21737016-and-d...

crc32 9y ago

OK - would you agree that this presents us with an ethical problem? How about a societal/practical problem? Is an unequal society sustainable? What actions can be taken to mitigate the ethical and practical problems presented by inequality?

adynatos 9y ago
unequal society was sustainable exactly until now. there is no evidence whatsoever that it won't still be.
- pbhjpbhj 9y ago
  If you consider the unnecessary death and suffering of other people, and major environment impacts, to be "sustainable" then yes, unequal society has been entirely sustainable. In practice the inequality has lead to massive unrest (eg civil war), disease, and famine time and again. You can't honestly look back at history and consider that inequality has been anything other than a cause of immeasurable misery.
  - adynatos 9y ago
    from my point of view all those deaths and massive unrests resulted from various groups trying to do away with inequality, usually by taking what's not theirs.
    - AnimalMuppet 9y ago
      True, but... Lenin (for example) didn't walk into a prosperous, free, egalitarian country, and persuade everyone to rise up against the existing system. The inequality, poverty, and misery gave rise to people willing to listen to Lenin, and to try what he was selling. I'm not excusing Lenin. I'm not apologizing for him. But without the existing inequality, he would have gotten no traction.
      - adynatos 9y ago

chopin 9y ago

That could only be said with some certainty if we had equal opportunity. Most western societies are far off the mark in that regard.

adynatos 9y ago
i agree. free market capitalism should replace current corporatism. but that's currently impossible - there will always be lobbying and special treatments while the goverment is able to interfere with the market.

mdemare 9y ago

"Some people are more skilled than others, therefore inequality exists" - sure. But why would that predict _rising_ inequality?

adynatos 9y ago
because people continue to live. those skilled in making money make more money, those not - lose more money.
AnimalMuppet 9y ago
Paul Graham says that technology is an amplifier. And technology has been giving increasing leverage over time.

ska 9y ago

what research can you cite supporting this hypothesis?

adynatos 9y ago
Rothbard, Hayek, Hoppe, et al.
- deleted 9y ago
  [deleted]