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Steven Pinker's new book, Enlightenment Now, has a pretty compelling section on wealth/income inequality. The basic position - and I think the data supports thi

by cal5k 9y ago

Steven Pinker's new book, Enlightenment Now, has a pretty compelling section on wealth/income inequality. The basic position - and I think the data supports this - is that it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. Furthermore, wealth isn't a static I win/you lose proposition - much of that wealth has been created in recent history. People spend less as a percentage of income on food and housing, have better access to healthcare, and more leisure time than ever before. It's a remarkable story. Over a billion people have been lifted out of poverty over the last 30 years thanks to globalization. I think that's much more important than how much money Warren Buffett or Bill Gates have. Income/wealth inequality has been the state of humanity for all of recorded history, and it seems unlikely to go away any time soon - it's trivially easy to show how wealth accumulation occurs using game theory even if trade is relatively fair. The only events that seem to reliably reset the balance are global wars, huge famines, or natural disasters. I think it's a natural human inclination to fixate on the rich and to demonize them, and perhaps some are deserving of such demonization, but it doesn't seem to be a terribly useful way to think about improving the human condition. It just spurs on class resentment which is, if history is any guide, just about the worst way to go about things possible.

psyc 9y ago
It couldn't possibly not matter, because wealth is not only standard of living, but also power. At the highest level, the wealthy are not simply comfortable. They have the power to shape and organize aspects of the economy, supply chain, and the laws. That has to matter in some way beyond having one's material needs met or not.
- tibbetts 9y ago
  It matters, and it might be ok if the wealthy were being nice about it. Unfortunately a very active subset seems to be bringing back feudalism. In the 20s-70s rich people were conveniently afraid of communist revolution and thus inclined to distributed gains. Without another credible threat of global revolution I don’t know how this gets fixed. Of course, communism did have downsides for the people who actually lived under it.
  - psyc 9y ago
    I basically agree with your first sentence. Specifically, I don't believe capitalism itself is the root problem, but rather something like a deficit in social cohesion. No sense that we're fellow humans collectively struggling towards a better society. That sense doesn't necessarily imply a communist implementation. It could mean something as simple as an ethos in which those who are better off try to help others up. I couldn't begin to address how that might come about, and I'm as wary as anyone about trying to use a State to do it. Because the State never actually turns out to be the People, except in the naive or fanciful abstract.
    - charlesdm 9y ago
      Capitalism works fine, the only 'flaw' I think it has is that excessive capital can compound way too fast. If you have $10m, and you invest that really really really well, you might be making 10 to 30% on that capital. Maybe more if you're an entrepreneur investing strategically. That's fine. But let's say you're worth $1bn, and you compound at 10% per year.. you're making money hand over fist. Add smart use of debt to that, and that's probably too much rent seeking to be healthy. Basically, once you pass a few 100 million, I think it gets really unfair. Below.. it doesn't really matter. No one will live in poverty because someone owns $100m -- it's meaningless in the grand scheme of things. But wealth is a snowball that doesn't grow fast enough on the low end, and too fast on the high end. The only way to fix that would probably be a global wealth tax, but I don't see that happening anytime soon.
  - sparkzilla 9y ago
    "downsides"
    - ericd 9y ago
      Largest understatement I've seen in a while.
      - cal5k 9y ago
        Between Mao and Stalin alone you're probably talking 50-100MM deaths. That's one hell of a downside.
- defertoreptar 9y ago
  That's a good argument, and to many it's an argument for wealth redistribution. I prefer to look at it instead as an argument for limiting the powers of government in order to limit its susceptibility to corruption.
  - cal5k 9y ago
    The main thrust is that this seems to simply be a consequence of differing ability/circumstance, and there is no counter-example in recorded history - even our views on the "noble savage" are probably skewed by the fact that large hunter-gatherer societies with enough wealth to allow accumulation have been stamped out. The follow-on question is: what do we do about it? Attempts to artificially "correct" inequality for the sake of correction are universally disastrous. Progressive taxation and redistribution are, I think, reasonable, as is universal basic income, and sound government has a huge role to play. But the goal should be to provide basic services and create opportunity for the bottom 50%, not wrest control of wealth from the top 1%. The goal of actually stamping out inequality is a fool's errand.
    - wiz21c 9y ago
      Fortunately, thanks to your solution, the basic services for the bottom 50% will make them no less free than slaves... (admittedly, history happens like that but it's been continually fought)
  - tdmule 9y ago
    Does limiting government limit the powers of the wealthy? It would limit one channel for them to exercise their power, but other channels like corporate control would exist.
    - psyc 9y ago
      I believe we are going to find it increasingly essential to view corporations as a second government that has a particular relationship with the nominal one.
- whb07 9y ago
  It’s not a static group. Those in the 1% are not the same group over the following years. This has been well established. For another simple example, look at the Fortune 500 of today vs 20 years ago. Very few companies remain, it’s still very much fluid.
  - psyc 9y ago
    I think it's more relevant that the vast majority will never be in the group, than that the group's roster changes.
    - zip1234 9y ago
      By definition, only 1% of people can be in the 1%...
      - yazaddaruvala 9y ago
        *At any given time You could have a contrived round robin system where 100% of people eventually end up with 100% of the wealth.
  - sp0rk 9y ago
    > For another simple example, look at the Fortune 500 of today vs 20 years ago. Very few companies remain, it’s still very much fluid. To my eyes, your statement seems to be completely false. http://archive.fortune.com/magazines/fortune/fortune500_archive/full/1998/ http://archive.fortune.com/magazines/fortune/fortune500_arch...
    - whb07 9y ago
      Ooh nitpicking! Okay, I’ll bite, so let’s just go through the top 10 from 1998 and 2017 to see if there is any dynamism or if it’s a static body like you’re suggesting. 1998, 2017: 1) GM, Walmart 2) Ford, Berkshire Hathaway 3) Exxon, Apple 4) Walmart, Exxon 5) GE, McKesson 6) IBM, United health 7) Chrysler, CVS 8) Mobil, GM 9) Altria, ATT 10) ATT, Ford Wow, outstanding ! As you can see there are a number of companies that are new, dropped lower ranking, moved up in ranking, and completely disappeared. We could keep going even further back a decade and the changes will be more visible. There’s a few companies who are entirely gone from the top 10, and I can guarantee that none of them wanted that outcome. So to you, I say, got any more nitpickings?
cryptoz 9y ago
I am super interested in reading Enlightenment Now - I will do so especially after your comment. I'll have to do this because I so vehemently disagree with your summary or assessment of the situation. Specifically, > The basic position - and I think the data supports this - is that it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. This is whataboutism and justifying means to ends and it makes no sense to me. How could this be? Many of the top 1% in our world are murderers and killers and so greedy they are set out to hurt the poor as much as possible. This matters. It does matter who they are. Their character matters. Their actions matter. Their words matter. Due in part to their wealth, the world listens to them for better or worse, and they hold a responsibility that the current 1% batch (and perhaps none in history, I don't know) are not holding up. Yes, overall the poor are seeing vastly improved living conditions. This does not mean that it should not be better. It is offensive to a population to tell them that they have it better than before and to basically not worry about it or complain that the inequality is so intense, because their parents or even ancestors had it worse. No, the attitude should be that it is still really bad for a lot of people, and that state of affairs should be unacceptable. That much human suffering is unnecessary. It should not be happening in a world of surplus like today's. The top 1% matter immensely - who they are, what they do, how they act.
- tibbetts 9y ago
  This is true. The feeling of entitlement, that their wealth was earned, and the lack of obligation to give back to the greater good, is the biggest problem with wealth growth since the 1980s. The 19th century British aristocracy might have been horrible, but at least they thought they were supposed to be building a better world, not just feathering their own nest. _How Much is Enough_ is a very conservative British book about this, and the idea that modern Capitalism has forgotten what the point of life might be.
torpfactory 9y ago
I don’t think it’s sufficient that conditions for the bottom 50% are just improving. In my opinion, humanity has the technology to provide for everyone to have access to clean food and water, modern medical care, and primary education. These should be provided without regard to the ability of the recipients to pay. Wealth inequality definitely gets in the way of this goal, as wealth that might help achieve these goals instead ends up in he hands of a few. In the US we effectively deny modern medical care to poor folks - you are required to go essentially bankrupt before Medicaid kicks in. Many people forego care so they don’t go bankrupt. The fact that more sane policies have not been implemented is a direct result of the influence of a wealthy political donor class which does not want to help pay for such a system. Inequality is inevitable, but we at least ought to move the safety net up a bit (and globally too).
- cal5k 9y ago
  I don't disagree at all. I just don't see how railing against the notion of inequality does anything to address this - the US collects enough in tax revenue to solve these problems already. What it needs is better policy. I should also mention that I live in Canada which, though flawed in many ways, seems to have struck a better balance.
  - Turing_Machine 9y ago
    Canada (and most of Europe, for that matter) don't bear the costs of their own defense. That helps a lot. You may be wondering who would want to attack Canada. Well, you have an awful lot of wheat and oil, and China has an awful lot of hungry people and factories.
    - cal5k 9y ago
      China spends less than half what America spends on defense, and yet nobody is crazy enough to want to attack China. I'd also argue that a de-escalation in defence spending is entirely possible without sacrificing national security. Would China invade Canada if the world's defence budgets dropped precipitously? Probably not - it has far more to gain through trade than by attempted colonization. In fact, last time I checked nobody in Canada or Western Europe was asked to vote on the US defense budget. I'd gladly vote to cut it in half and devote more to shoring up your healthcare system, but it's a sovereign issue and it's up to Americans to solve it for themselves.
Analemma_ 9y ago
> is that it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. Which they are not: real wages for the bottom four quintiles have been stagnant since the seventies and the 1% have captured essentially all income gains from productivity growth since then. That is the source of the discontent. > Over a billion people have been lifted out of poverty over the last 30 years thanks to globalization You're trying to pull a fast one here. The statistic about "a billion people have been lifted out of poverty" has been greatly overblown: it's technically true, but it turns out most of those people are in China— if you exclude China, the number looks much less impressive. And yes, China's development is impressive, but it's a non sequitur to go from "Dirt-poor Communist country becomes richer when switching to free-market capitalism" to saying that contemporary ultra-laissez-faire economics are a good thing for developed nations. > It just spurs on class resentment which is, if history is any guide, just about the worst way to go about things possible. "It's only class warfare when we fight back". If, as the evidence strongly hints, the rich are leveraging their capital into political power to get more and more opportunities to stack the deck and create an unfair playing field (in a positive feedback loop), then not noticing this and subsequently demonizing them is deliberately blinding oneself to the problem and the most plausible avenues of solution.
- cal5k 9y ago
  > Which they are not: real wages for the bottom four quintiles have been stagnant since the seventies and the 1% have captured essentially all income gains from productivity growth since then. That is the source of the discontent. I'm talking globally. The American middle class has done uniquely poorly during this period. (I'm not American) Still - if you can tell me with a straight face that you'd rather be poor in the 70s vs today, I would label you crazy. It's almost impossible to account for the changing quality and abundance of goods - huge advances in medicine, computation, a plethora of high quality goods and services. Life today is qualitatively different than it was 40-50 years ago. >You're trying to pull a fast one here. The statistic about "a billion people have been lifted out of poverty" has been greatly overblown: it's technically true, but it turns out most of those people are in China How is that a fast one? A billion people is a billion people. If the fact that they're primarily Chinese bothers you we'll need to have a different discussion. > "It's only class warfare when we fight back". Who are we fighting? This is an entirely unhelpful rhetoric.
sykh 9y ago
I haven't read Pinker's book and he is certainly more knowledgeable than I am on the topic. What does he say about attitudes like "keeping up with the Joneses", jealousy, and similar emotions? It seems to me that most people tend toward jealousy and compare themselves to those who are better off rather than those who are worse off. I've been under the impression that disparity, inequality in and of itself is a problem due to human nature. Does Pinker's research show otherwise?
- cal5k 9y ago
  I think the picture is perhaps more muddy than it's made out to be re: "keeping up with the joneses". I can't really speak confidently to the research from memory, but Pinker does address this specifically.
- tonyedgecombe 9y ago
  I think it's disingenuous to label someone who is struggling to fund housing and healthcare as just jealous.
  - cal5k 9y ago
    I think it's disingenuous to argue against words the above commenter did not actually write.
    - tonyedgecombe 9y ago
      It seems to me that most people tend toward jealousy
      - sykh 9y ago
        You added a phrase that I did not write. as just jealous I did not write this or imply this. People who struggle with food or housing are not merely jealous. They have real concerns and need. The discussion I referred was not about such people or conditions. I was responding to the notion that inequality does not matter as much now because conditions for the those at the bottom have improved. Clearly the implication is that we are not talking about people struggling with food and housing. The idea is that if everyone has their basics needs met does inequality still matter? I suggested it would still matter due to the tendency toward jealousy and comparing oneself to those who are better off.
angarg12 9y ago
> People spend less as a percentage of income on food and housing I've lived in several places in the last few years and this couldn't be further away from truth. I spend the same or more % of my income in housing than my parents did, and I get much less for it. They were able to buy a 4 bedroom flat in town working blue collar jobs, and me, with an engineering degree, probably could aspire to a 2 bedroom out of town at best.
- cal5k 9y ago
  I totally empathize with your situation, but globally the numbers are irrefutable. That's not to say that many people aren't still struggling - we can always do better, but I think there's reason to be optimistic.
  - Turing_Machine 9y ago
    > I totally empathize with your situation, but globally the numbers are irrefutable. Indeed they are. Here are some numbers from NPR (hardly a right-wing thinktank): https://www.npr.org/sections/thesalt/2015/03/02/389578089/your-grandparents-spent-more-of-their-money-on-food-than-you-do https://www.npr.org/sections/thesalt/2015/03/02/389578089/yo... In 1960, Americans spent about 18% of their income just for food. Now it's less than 10%. And, of course, the quality of food available to a typical American is vastly better than it was in 1960.
    - mnm1 9y ago
      The quality of food is better? That's hardly believable. Do you have a source? All first person accounts I've ever read from people who lived then and now indicate otherwise.
      - maxerickson 9y ago
        My grandparents didn't have a freezer until the 1950s. They kept a beef in a commercial freezer 15 miles away in town. They grew vegetables that they sold to grocery stores, so I guess they had good access to that sort of thing. I doubt any of the stores my parents shopped at in the 1960s Midwest particularly had things like avocados.
danmaz74 9y ago
Income/wealth inequality always happens and probably always will, but it doesn't NEED to be so big and become bigger and bigger as it's doing since Reagan started the movement to tax the rich less and less.
- v_lisivka 9y ago
  Riches are not working at all, so it is not important how much taxes they will pay, because all taxes will be paid by workers.
  - ericd 9y ago
    The richest pay the vast majority of the tax in the US, regardless of whether they work. And the very richest in the US almost all got there by working, many of them by starting huge companies.
    - cal5k 9y ago
      Marxist reverence for the proletariat has been an enduring concept. The problem is that nobody has actually defined who the prols are - are they the factory workers? Entrepreneurs? Teachers? Accountants? Lawyers? Engineers? Civil servants? The US economy is crazy diverse. There really is no such thing as a unified working class struggling against "the man".
      - noobermin 9y ago
        If you're just talking about Marxian definitions, it's simple: Owns means of production: bourgeousie Works without owning means of production: proletariat
        ericd 9y ago
        Where do all the workers who have 401k plans composed of shares of all the public companies in the US fit?
me_love_rust 9y ago
> is that it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. That line of thought will lead you to run in with the ultimate wealth distribution tools the bullet, the bomb and the rifle I know this is true because I'm decently middle class and want the fuckers to burn myself right now, I can't imagine what people truly being fucked by these monsters feel
mentos 9y ago
I think the biggest mistake people make when counting this wealth is that if it is hoarded and never spent then it might as well not exist and should be viewed as anti-inflationary. What if all the billionaires in the world decided 'let me just hit delete on all of the zeroes in my bank account' what affect would that have on the rest of the world?
- maxerickson 9y ago
  The banks are using the zeros to back loans. Most wealth already isn't hoarded. It's things like amazon.com and jets and buildings and so on.
- zaroth 9y ago
  Not so much hoarded as invested. Warren Buffet primarily keeps his money in BerkHa stock, which itself puts its money to work employing nearly half a million people. If the wealthiest 1% had their assets wiped out tomorrow, most of us wouldn’t have a job the next day.
  - mpweiher 9y ago
    Define "wiped out". If the wealth were simply redistributed, for example the ownership of the companies transferred to the employees, no jobs would be lost. Not that I am an advocate of that.
    - deleted 9y ago
      [deleted]
- eeZah7Ux 9y ago
  > What if all the billionaires in the world decided 'let me just hit delete on all of the zeroes in my bank account' what affect would that have on the rest of the world? In the long term, nothing.
perchard 9y ago
> Income/wealth inequality always happens and probably always will - it's trivially easy to show how this happens using game theory even if trade is relatively fair. Do you have a reference for this? Interested to read more (game theoretic basis specifically).
mpweiher 9y ago
There's a lot to agree with, for example the things Pinker talks about and the fact that wealth is not necessarily a zero sum game. However...income inequality by itself is a problem. Hmm...I thought it was one of Hans Rosling's (amazing) TED talks, but now I just see Richard Wilkinson's talk: https://www.ted.com/talks/richard_wilkinson https://www.ted.com/talks/richard_wilkinson Anyway, the fascinating thing is that everything gets worse in a country when there is "too much" inequality. Even the rich in unequal countries are worse off by many/most measures than the rich in more equal countries, despite having more money. (And even than the not quite so rich in the more equal countries, IIRC). And that's without the whole pitchforks action that starts to happen when things get too out of hand. So yes, there is some level of inequality that we need to tolerate in order to run a basic capitalist economy, and interestingly enough most people are OK with that. But you also need to work hard to not let that inequality get out of hand, and not because of a bleeding heart, but because of pure self interest.
- cal5k 9y ago
  I think this is fundamentally the correct point of view, however my argument would be that it's best to focus on improving the lives of the bottom half than bemoaning the wealth of the top 1%. This can be accomplished through progressive taxation and the like, which as a secondary benefit does reduce inequality.
  - mpweiher 9y ago
    Agreed that that needs to be the primary focus...however (you knew there was going to be a "however"): Income and wealth inequality have reached pretty ridiculous levels, and noting that as a problem is not "bemoaning" people their (well-earned) wealth. A lot of that is not money earned by advancing society, a lot of is extractive/rent-seeking that is actually harmful (cough 2008 cough). For example: "The median American estimated that the CEO-to-worker pay-ratio was 30-to-1, and that ideally, it’d be 7-to-1. The reality? 354-to-1. " https://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think/ https://www.scientificamerican.com/article/economic-inequali... Sorry, 354:1 is absolutely ludicrous, and I know a little bit of what I am talking about. My father was a high-ranking auto-executive, had actually been planned to succeed Carl Hahn as CEO of Volkswagen, but some funky politics got in the way of that. He never made that kind of money, and didn't want to. He thought it was obscene. And it is. He also thought unions were a Good Thing™, and they are. If nothing else, they are selective pressure on companies to become better. And that's despite having that belief tested to the limit, because at VW the unions pretty much run the place. So yes, envy is not a good thing, but noting that CEO pay is ridiculous, that banker's bonuses need to be reined in lest we all suffer the consequences, again, and that inheritance tax is not the devil is not "bemoaning".
rayiner 9y ago
> think the data supports this - is that it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. But what if there are alternative models where the bottom half are improving faster than they are now? I think it's helpful to think about different economic models in terms of optimizing a figure of merit. Free-trade globalization is probably good for optimizing aggregate global GDP. In a democratic society, that's not necessarily the most relevant figure of merit. Are there a different set of economic rules that, for example, maximizes the wealth of the middle 50% (such that they have more wealth under that system than they do under the current one)?
perfunctory 9y ago
> It just spurs on class resentment which is, if history is any guide, just about the worst way to go about things possible. Indeed, the worst thing slaves could do is to resent against their masters. I am sure there must have been a better way.
- cal5k 9y ago
  This is a classic logical fallacy called an "Appeal to Extremes" (https://www.logicallyfallacious.com/tools/lp/Bo/LogicalFallacies/30/Appeal-to-Extremes https://www.logicallyfallacious.com/tools/lp/Bo/LogicalFalla...). It is about as compelling as stomping your feet and yelling at the top of your lungs.
mythrwy 9y ago
Improved living conditions are great, but not at the cost of ceding almost full control of what goes on in the world to a small handful of people. Even if many of them are benevolent for now, it may not always be that way. It's simply not a safe system. We need a level of opportunity for all to advance. And that means some level of economic equality for all. This is a matter of intrinsic justice but also more importantly a matter of practicality to avoid the hazards of slavery, corruption, dynasty and stagnation. Inequality has always been, and likely always will be. And this natural and its fine (like most things) within certain parameters. Inequality doesn't doesn't need to exist at these extremes. Its dangerous.
antisthenes 9y ago
> People spend less as a percentage of income on food and housing, have better access to healthcare, and more leisure time than ever before A critical phrase uttered without any evidence. I urge you to look at the slice of people for whom housing and healthcare are increasingly out of reach, not just the globalization fairy tale you would like to focus on in your post.
drawkbox 9y ago
In game design, an imbalanced game is not fun for anyone. Games that allow both skilled/rich and less-skilled/poor players are common even in balanced games, and they are fun. The problem becomes when a few players are cheating or the game is imbalanced to the point that noone can win but the already winners and noone can have any fun. Right now we have inequality that is more like cheats in a game than a balanced, fun, fair game. Ultimately money wasn't designed to be hoarded, it was designed to be an exchange of value and services. Hoarded money that isn't put into action is taking from the game and the fun which cheats everyone.
eeZah7Ux 9y ago
> it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. No. When inequality increases more people are necessarily below the average while a tiny minority gets way above average. The total wealth on the planet is divided among people. This is a basic economic fact. As inequality increases people are rewarded more for "climbing the ladder". Competition and selfishness increase and cooperation and solidarity decreases. > I think it's a natural human inclination to fixate This is the "human nature fallacy".
coliveira 9y ago
First of all it is an illusion to say that conditions have improved because of capitalism alone. In most of the places where people had some improvement, this happened because of socialist policies of wealth redistribution lead by the state, including in the USA. If you go back to the US of the 1910-1930s, most people lived in near poverty, with the "dream" of one day becoming something else, until a socialist plan of wealth redistribution called new deal was implemented. Second, wealth inequality is a direct threat to the democratic system. In a country that has extreme levels of wealth concentration as we see here in the US and elsewhere, it is very easy to enact policies that harm society in general in benefit of the minority that holds economic power. This in fact was the downfall of capitalist society in the 1920s. In such a society, there is big turmoil among the general population, which frequently leads to revolutions and economic disasters. We are just starting to see this pattern happening the the US, with increasingly big economic calamities such as in 2008 and political turmoil such as the election of Trump. I wouldn't be surprised if the US and similar countries are heading towards a popular revolution as we saw in the 19th and early 20th centuries.
- JoeAltmaier 9y ago
  Further, even if we give 'capital' a pass (the use of imaginary points to grease the wheels of trade) and move on to the Free Market. A market works if everybody has something to trade there. For those that bring only their labor (whether ditch digging, medicine or engineering) they have a finite value over their lifetime - they will never be wealthy as the top 1% are. Now automate. We no longer need the labor of millions to run the machine (country's industry). We need only a million. Then only a hundred thousand. Then none. What happens to the 'laborers'? They are dropped out of the bottom of the machine as scrap. Its this 'means of production' that gets us into trouble - when a few folks squat on it and call it 'theirs', the rest of us are reduce to marginal participants in the machine, expendable. Automation is happening in the US at an explosive rate. Heard about a factory coming back from China? Only because now even Chinese labor is too expensive, if you can automate. There are insignificant jobs 'coming back'. And there never will be any more, again. No, the age of labor is nearly over. And what will the millions of us do then?
  - 9y ago
throw2016 9y ago
The knee jerk response of 'envy' to any discussion about inequality trivializes economic discussion. Given this is not mere conjecture but backed by hard data by the work of economists like Piketty[1] continued talk about envy betrays a camel in the sand approach. There is now consensus among leading economists like Stiglitz [2] and even bastions of neoliberalism like the University of Chicago and IMF that something has gone seriously wrong in the last 40 years. Piketty's data shows a dramatic increase in inequality since the 1980s with labour share of income shrinking with wages stagnant and essentially at the same levels as they were 40 years ago with disproportionate gains going to the top 1 percent. Grandiose claims about lifting 1 billion people out of poverty are meaningless without any data to back them up. Where, how was it achieved, how long it did take, which specific policies? Why haven't we been able achieve these results in the poorest parts of Asia, Africa and even the USA inspite of trying for the last 70 years? Contrary to the 'envians' no one cares about the rich in any serious economic discussion, but many do care about the majority in a society getting poorer, unequal outcomes, bad economic policies, lobbying and capture, exploitation, unemployment, underemployment as this can only lead to highly unstable societies.[3] [1] https://www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts https://www.newyorker.com/news/john-cassidy/pikettys-inequal... [2] https://www.theatlantic.com/business/archive/2015/11/stiglitz-heres-how-to-fix-inequality/413761/ https://www.theatlantic.com/business/archive/2015/11/stiglit... [3] http://evonomics.com/joseph-stiglitz-inequality-unearned-income/ http://evonomics.com/joseph-stiglitz-inequality-unearned-inc...
micky_25 9y ago
>... so long as the bottom half are seeing improved living conditions. What about western countries where people under 35 are dealing with high student debt, unaffordable housing, stagnate wages and "gig" economy jobs? Things look pretty glum unless you've got some form of inheritance on the horizon.
- jblow 9y ago
  The high student debt and unaffordable housing are almost entirely due to policies of the Democratic Party, a.k.a. the party that is supposedly trying to reduce income inequality. Interventions often don’t do what you wanted them to do.
  - maoistinquisitr 9y ago
    I'm not a fan of Obama but one good thing he was doing towards the end was cracking down on fraudulent "higher education" programs milking students and the taxpayer. He was deliberately choking off the loan subsidy fraud game. Unfortunately, Trump immediately resumed the Bush policy of pumping up the student debt for worthless degrees bubble.
    - jblow 9y ago
      But that’s not the real problem. The real problem is that the legitimate schools have been able to raise their prices tremendously because the students have all this easy money given to them for just that purpose.
      - maoistinquisitr 9y ago
        Well, I agree, but that's definitely a totally bipartisan scam. It's not just the loan subisidies, though. A huge amount of federal policy building over 70 years shovels tax money towards "higher ed". Most major schools are de facto defense contractors.
      - cma 9y ago
        Tongue in cheek it can't help that people take advantage of states by getting cheap state subsidized tuition and then flee to low tax states when it pays off.
elihu 9y ago
> Furthermore, wealth isn't a static I win/you lose proposition In some areas that's true, but in others it isn't. There's only so much land, and if rich people own all the best places to live (i.e. the ones within reasonable driving range of jobs), then the poor people are stuck paying rent. Other examples are that the rich have a disproportionate influence on the political process, have greater control of the media, and increasingly (thanks to Facebook, Google, etc.. and advances in machine learning) they have fine-grained knowledge of the opinions and preferences of whole populations, knowledge which is used specifically to influence the behavior of those people -- mostly through ad placement, but also to influence elections (e.g. the recent Cambridge Analytica scandal).
- mmcnl 9y ago
  Your example would create an opportunity for companies to relocate to areas where where "poor" people live (and buying a house is affordable).
  - elihu 9y ago
    It would, for awhile -- until the real-estate speculators catch on.
Tomminn 9y ago
Capitalism is an efficient mechanism for serving dollar weighted people. This is the central problem with massive inequality.
ksec 9y ago
>are doing so long as the bottom half are seeing improved living conditions I dont think much has changed for bottom half living conditions. Especially since QE. >People spend less as a percentage of income on food and housing Is that true though? If you take any housing prices and rent and compared to salary in the last 10 years.

by cal5k 9y ago

psyc 9y ago

It couldn't possibly not matter, because wealth is not only standard of living, but also power. At the highest level, the wealthy are not simply comfortable. They have the power to shape and organize aspects of the economy, supply chain, and the laws. That has to matter in some way beyond having one's material needs met or not.

tibbetts 9y ago
It matters, and it might be ok if the wealthy were being nice about it. Unfortunately a very active subset seems to be bringing back feudalism. In the 20s-70s rich people were conveniently afraid of communist revolution and thus inclined to distributed gains. Without another credible threat of global revolution I don’t know how this gets fixed. Of course, communism did have downsides for the people who actually lived under it.
- psyc 9y ago
  I basically agree with your first sentence. Specifically, I don't believe capitalism itself is the root problem, but rather something like a deficit in social cohesion. No sense that we're fellow humans collectively struggling towards a better society. That sense doesn't necessarily imply a communist implementation. It could mean something as simple as an ethos in which those who are better off try to help others up. I couldn't begin to address how that might come about, and I'm as wary as anyone about trying to use a State to do it. Because the State never actually turns out to be the People, except in the naive or fanciful abstract.
  - charlesdm 9y ago
    Capitalism works fine, the only 'flaw' I think it has is that excessive capital can compound way too fast. If you have $10m, and you invest that really really really well, you might be making 10 to 30% on that capital. Maybe more if you're an entrepreneur investing strategically. That's fine. But let's say you're worth $1bn, and you compound at 10% per year.. you're making money hand over fist. Add smart use of debt to that, and that's probably too much rent seeking to be healthy. Basically, once you pass a few 100 million, I think it gets really unfair. Below.. it doesn't really matter. No one will live in poverty because someone owns $100m -- it's meaningless in the grand scheme of things. But wealth is a snowball that doesn't grow fast enough on the low end, and too fast on the high end. The only way to fix that would probably be a global wealth tax, but I don't see that happening anytime soon.
- sparkzilla 9y ago
  "downsides"
  - ericd 9y ago
    Largest understatement I've seen in a while.
    - cal5k 9y ago
      Between Mao and Stalin alone you're probably talking 50-100MM deaths. That's one hell of a downside.
defertoreptar 9y ago
That's a good argument, and to many it's an argument for wealth redistribution. I prefer to look at it instead as an argument for limiting the powers of government in order to limit its susceptibility to corruption.
- cal5k 9y ago
  The main thrust is that this seems to simply be a consequence of differing ability/circumstance, and there is no counter-example in recorded history - even our views on the "noble savage" are probably skewed by the fact that large hunter-gatherer societies with enough wealth to allow accumulation have been stamped out. The follow-on question is: what do we do about it? Attempts to artificially "correct" inequality for the sake of correction are universally disastrous. Progressive taxation and redistribution are, I think, reasonable, as is universal basic income, and sound government has a huge role to play. But the goal should be to provide basic services and create opportunity for the bottom 50%, not wrest control of wealth from the top 1%. The goal of actually stamping out inequality is a fool's errand.
  - wiz21c 9y ago
    Fortunately, thanks to your solution, the basic services for the bottom 50% will make them no less free than slaves... (admittedly, history happens like that but it's been continually fought)
- tdmule 9y ago
  Does limiting government limit the powers of the wealthy? It would limit one channel for them to exercise their power, but other channels like corporate control would exist.
  - psyc 9y ago
    I believe we are going to find it increasingly essential to view corporations as a second government that has a particular relationship with the nominal one.
whb07 9y ago
It’s not a static group. Those in the 1% are not the same group over the following years. This has been well established. For another simple example, look at the Fortune 500 of today vs 20 years ago. Very few companies remain, it’s still very much fluid.
- psyc 9y ago
  I think it's more relevant that the vast majority will never be in the group, than that the group's roster changes.
  - zip1234 9y ago
    By definition, only 1% of people can be in the 1%...
    - yazaddaruvala 9y ago
      *At any given time You could have a contrived round robin system where 100% of people eventually end up with 100% of the wealth.
- sp0rk 9y ago
  > For another simple example, look at the Fortune 500 of today vs 20 years ago. Very few companies remain, it’s still very much fluid. To my eyes, your statement seems to be completely false. http://archive.fortune.com/magazines/fortune/fortune500_archive/full/1998/ http://archive.fortune.com/magazines/fortune/fortune500_arch...
  - whb07 9y ago
    Ooh nitpicking! Okay, I’ll bite, so let’s just go through the top 10 from 1998 and 2017 to see if there is any dynamism or if it’s a static body like you’re suggesting. 1998, 2017: 1) GM, Walmart 2) Ford, Berkshire Hathaway 3) Exxon, Apple 4) Walmart, Exxon 5) GE, McKesson 6) IBM, United health 7) Chrysler, CVS 8) Mobil, GM 9) Altria, ATT 10) ATT, Ford Wow, outstanding ! As you can see there are a number of companies that are new, dropped lower ranking, moved up in ranking, and completely disappeared. We could keep going even further back a decade and the changes will be more visible. There’s a few companies who are entirely gone from the top 10, and I can guarantee that none of them wanted that outcome. So to you, I say, got any more nitpickings?

cryptoz 9y ago

I am super interested in reading Enlightenment Now - I will do so especially after your comment. I'll have to do this because I so vehemently disagree with your summary or assessment of the situation. Specifically, > The basic position - and I think the data supports this - is that it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. This is whataboutism and justifying means to ends and it makes no sense to me. How could this be? Many of the top 1% in our world are murderers and killers and so greedy they are set out to hurt the poor as much as possible. This matters. It does matter who they are. Their character matters. Their actions matter. Their words matter. Due in part to their wealth, the world listens to them for better or worse, and they hold a responsibility that the current 1% batch (and perhaps none in history, I don't know) are not holding up. Yes, overall the poor are seeing vastly improved living conditions. This does not mean that it should not be better. It is offensive to a population to tell them that they have it better than before and to basically not worry about it or complain that the inequality is so intense, because their parents or even ancestors had it worse. No, the attitude should be that it is still really bad for a lot of people, and that state of affairs should be unacceptable. That much human suffering is unnecessary. It should not be happening in a world of surplus like today's. The top 1% matter immensely - who they are, what they do, how they act.

tibbetts 9y ago
This is true. The feeling of entitlement, that their wealth was earned, and the lack of obligation to give back to the greater good, is the biggest problem with wealth growth since the 1980s. The 19th century British aristocracy might have been horrible, but at least they thought they were supposed to be building a better world, not just feathering their own nest. _How Much is Enough_ is a very conservative British book about this, and the idea that modern Capitalism has forgotten what the point of life might be.

torpfactory 9y ago

I don’t think it’s sufficient that conditions for the bottom 50% are just improving. In my opinion, humanity has the technology to provide for everyone to have access to clean food and water, modern medical care, and primary education. These should be provided without regard to the ability of the recipients to pay. Wealth inequality definitely gets in the way of this goal, as wealth that might help achieve these goals instead ends up in he hands of a few. In the US we effectively deny modern medical care to poor folks - you are required to go essentially bankrupt before Medicaid kicks in. Many people forego care so they don’t go bankrupt. The fact that more sane policies have not been implemented is a direct result of the influence of a wealthy political donor class which does not want to help pay for such a system. Inequality is inevitable, but we at least ought to move the safety net up a bit (and globally too).

cal5k 9y ago
I don't disagree at all. I just don't see how railing against the notion of inequality does anything to address this - the US collects enough in tax revenue to solve these problems already. What it needs is better policy. I should also mention that I live in Canada which, though flawed in many ways, seems to have struck a better balance.
- Turing_Machine 9y ago
  Canada (and most of Europe, for that matter) don't bear the costs of their own defense. That helps a lot. You may be wondering who would want to attack Canada. Well, you have an awful lot of wheat and oil, and China has an awful lot of hungry people and factories.
  - cal5k 9y ago
    China spends less than half what America spends on defense, and yet nobody is crazy enough to want to attack China. I'd also argue that a de-escalation in defence spending is entirely possible without sacrificing national security. Would China invade Canada if the world's defence budgets dropped precipitously? Probably not - it has far more to gain through trade than by attempted colonization. In fact, last time I checked nobody in Canada or Western Europe was asked to vote on the US defense budget. I'd gladly vote to cut it in half and devote more to shoring up your healthcare system, but it's a sovereign issue and it's up to Americans to solve it for themselves.

Analemma_ 9y ago

> is that it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. Which they are not: real wages for the bottom four quintiles have been stagnant since the seventies and the 1% have captured essentially all income gains from productivity growth since then. That is the source of the discontent. > Over a billion people have been lifted out of poverty over the last 30 years thanks to globalization You're trying to pull a fast one here. The statistic about "a billion people have been lifted out of poverty" has been greatly overblown: it's technically true, but it turns out most of those people are in China— if you exclude China, the number looks much less impressive. And yes, China's development is impressive, but it's a non sequitur to go from "Dirt-poor Communist country becomes richer when switching to free-market capitalism" to saying that contemporary ultra-laissez-faire economics are a good thing for developed nations. > It just spurs on class resentment which is, if history is any guide, just about the worst way to go about things possible. "It's only class warfare when we fight back". If, as the evidence strongly hints, the rich are leveraging their capital into political power to get more and more opportunities to stack the deck and create an unfair playing field (in a positive feedback loop), then not noticing this and subsequently demonizing them is deliberately blinding oneself to the problem and the most plausible avenues of solution.

cal5k 9y ago
> Which they are not: real wages for the bottom four quintiles have been stagnant since the seventies and the 1% have captured essentially all income gains from productivity growth since then. That is the source of the discontent. I'm talking globally. The American middle class has done uniquely poorly during this period. (I'm not American) Still - if you can tell me with a straight face that you'd rather be poor in the 70s vs today, I would label you crazy. It's almost impossible to account for the changing quality and abundance of goods - huge advances in medicine, computation, a plethora of high quality goods and services. Life today is qualitatively different than it was 40-50 years ago. >You're trying to pull a fast one here. The statistic about "a billion people have been lifted out of poverty" has been greatly overblown: it's technically true, but it turns out most of those people are in China How is that a fast one? A billion people is a billion people. If the fact that they're primarily Chinese bothers you we'll need to have a different discussion. > "It's only class warfare when we fight back". Who are we fighting? This is an entirely unhelpful rhetoric.

sykh 9y ago

I haven't read Pinker's book and he is certainly more knowledgeable than I am on the topic. What does he say about attitudes like "keeping up with the Joneses", jealousy, and similar emotions? It seems to me that most people tend toward jealousy and compare themselves to those who are better off rather than those who are worse off. I've been under the impression that disparity, inequality in and of itself is a problem due to human nature. Does Pinker's research show otherwise?

cal5k 9y ago
I think the picture is perhaps more muddy than it's made out to be re: "keeping up with the joneses". I can't really speak confidently to the research from memory, but Pinker does address this specifically.
tonyedgecombe 9y ago
I think it's disingenuous to label someone who is struggling to fund housing and healthcare as just jealous.
- cal5k 9y ago
  I think it's disingenuous to argue against words the above commenter did not actually write.
  - tonyedgecombe 9y ago
    It seems to me that most people tend toward jealousy
    - sykh 9y ago
      You added a phrase that I did not write. as just jealous I did not write this or imply this. People who struggle with food or housing are not merely jealous. They have real concerns and need. The discussion I referred was not about such people or conditions. I was responding to the notion that inequality does not matter as much now because conditions for the those at the bottom have improved. Clearly the implication is that we are not talking about people struggling with food and housing. The idea is that if everyone has their basics needs met does inequality still matter? I suggested it would still matter due to the tendency toward jealousy and comparing oneself to those who are better off.

angarg12 9y ago

> People spend less as a percentage of income on food and housing I've lived in several places in the last few years and this couldn't be further away from truth. I spend the same or more % of my income in housing than my parents did, and I get much less for it. They were able to buy a 4 bedroom flat in town working blue collar jobs, and me, with an engineering degree, probably could aspire to a 2 bedroom out of town at best.

cal5k 9y ago
I totally empathize with your situation, but globally the numbers are irrefutable. That's not to say that many people aren't still struggling - we can always do better, but I think there's reason to be optimistic.
- Turing_Machine 9y ago
  > I totally empathize with your situation, but globally the numbers are irrefutable. Indeed they are. Here are some numbers from NPR (hardly a right-wing thinktank): https://www.npr.org/sections/thesalt/2015/03/02/389578089/your-grandparents-spent-more-of-their-money-on-food-than-you-do https://www.npr.org/sections/thesalt/2015/03/02/389578089/yo... In 1960, Americans spent about 18% of their income just for food. Now it's less than 10%. And, of course, the quality of food available to a typical American is vastly better than it was in 1960.
  - mnm1 9y ago
    The quality of food is better? That's hardly believable. Do you have a source? All first person accounts I've ever read from people who lived then and now indicate otherwise.
    - maxerickson 9y ago
      My grandparents didn't have a freezer until the 1950s. They kept a beef in a commercial freezer 15 miles away in town. They grew vegetables that they sold to grocery stores, so I guess they had good access to that sort of thing. I doubt any of the stores my parents shopped at in the 1960s Midwest particularly had things like avocados.

danmaz74 9y ago

Income/wealth inequality always happens and probably always will, but it doesn't NEED to be so big and become bigger and bigger as it's doing since Reagan started the movement to tax the rich less and less.

v_lisivka 9y ago
Riches are not working at all, so it is not important how much taxes they will pay, because all taxes will be paid by workers.
- ericd 9y ago
  The richest pay the vast majority of the tax in the US, regardless of whether they work. And the very richest in the US almost all got there by working, many of them by starting huge companies.
  - cal5k 9y ago
    Marxist reverence for the proletariat has been an enduring concept. The problem is that nobody has actually defined who the prols are - are they the factory workers? Entrepreneurs? Teachers? Accountants? Lawyers? Engineers? Civil servants? The US economy is crazy diverse. There really is no such thing as a unified working class struggling against "the man".
    - noobermin 9y ago
      If you're just talking about Marxian definitions, it's simple: Owns means of production: bourgeousie Works without owning means of production: proletariat
      - ericd 9y ago
        Where do all the workers who have 401k plans composed of shares of all the public companies in the US fit?

me_love_rust 9y ago

> is that it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. That line of thought will lead you to run in with the ultimate wealth distribution tools the bullet, the bomb and the rifle I know this is true because I'm decently middle class and want the fuckers to burn myself right now, I can't imagine what people truly being fucked by these monsters feel

mentos 9y ago

I think the biggest mistake people make when counting this wealth is that if it is hoarded and never spent then it might as well not exist and should be viewed as anti-inflationary. What if all the billionaires in the world decided 'let me just hit delete on all of the zeroes in my bank account' what affect would that have on the rest of the world?

maxerickson 9y ago
The banks are using the zeros to back loans. Most wealth already isn't hoarded. It's things like amazon.com and jets and buildings and so on.
zaroth 9y ago
Not so much hoarded as invested. Warren Buffet primarily keeps his money in BerkHa stock, which itself puts its money to work employing nearly half a million people. If the wealthiest 1% had their assets wiped out tomorrow, most of us wouldn’t have a job the next day.
- mpweiher 9y ago
  Define "wiped out". If the wealth were simply redistributed, for example the ownership of the companies transferred to the employees, no jobs would be lost. Not that I am an advocate of that.
  - deleted 9y ago
    [deleted]
eeZah7Ux 9y ago
> What if all the billionaires in the world decided 'let me just hit delete on all of the zeroes in my bank account' what affect would that have on the rest of the world? In the long term, nothing.

perchard 9y ago

> Income/wealth inequality always happens and probably always will - it's trivially easy to show how this happens using game theory even if trade is relatively fair. Do you have a reference for this? Interested to read more (game theoretic basis specifically).

mpweiher 9y ago

There's a lot to agree with, for example the things Pinker talks about and the fact that wealth is not necessarily a zero sum game. However...income inequality by itself is a problem. Hmm...I thought it was one of Hans Rosling's (amazing) TED talks, but now I just see Richard Wilkinson's talk: https://www.ted.com/talks/richard_wilkinson https://www.ted.com/talks/richard_wilkinson Anyway, the fascinating thing is that everything gets worse in a country when there is "too much" inequality. Even the rich in unequal countries are worse off by many/most measures than the rich in more equal countries, despite having more money. (And even than the not quite so rich in the more equal countries, IIRC). And that's without the whole pitchforks action that starts to happen when things get too out of hand. So yes, there is some level of inequality that we need to tolerate in order to run a basic capitalist economy, and interestingly enough most people are OK with that. But you also need to work hard to not let that inequality get out of hand, and not because of a bleeding heart, but because of pure self interest.

cal5k 9y ago
I think this is fundamentally the correct point of view, however my argument would be that it's best to focus on improving the lives of the bottom half than bemoaning the wealth of the top 1%. This can be accomplished through progressive taxation and the like, which as a secondary benefit does reduce inequality.
- mpweiher 9y ago
  Agreed that that needs to be the primary focus...however (you knew there was going to be a "however"): Income and wealth inequality have reached pretty ridiculous levels, and noting that as a problem is not "bemoaning" people their (well-earned) wealth. A lot of that is not money earned by advancing society, a lot of is extractive/rent-seeking that is actually harmful (cough 2008 cough). For example: "The median American estimated that the CEO-to-worker pay-ratio was 30-to-1, and that ideally, it’d be 7-to-1. The reality? 354-to-1. " https://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think/ https://www.scientificamerican.com/article/economic-inequali... Sorry, 354:1 is absolutely ludicrous, and I know a little bit of what I am talking about. My father was a high-ranking auto-executive, had actually been planned to succeed Carl Hahn as CEO of Volkswagen, but some funky politics got in the way of that. He never made that kind of money, and didn't want to. He thought it was obscene. And it is. He also thought unions were a Good Thing™, and they are. If nothing else, they are selective pressure on companies to become better. And that's despite having that belief tested to the limit, because at VW the unions pretty much run the place. So yes, envy is not a good thing, but noting that CEO pay is ridiculous, that banker's bonuses need to be reined in lest we all suffer the consequences, again, and that inheritance tax is not the devil is not "bemoaning".

rayiner 9y ago

> think the data supports this - is that it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. But what if there are alternative models where the bottom half are improving faster than they are now? I think it's helpful to think about different economic models in terms of optimizing a figure of merit. Free-trade globalization is probably good for optimizing aggregate global GDP. In a democratic society, that's not necessarily the most relevant figure of merit. Are there a different set of economic rules that, for example, maximizes the wealth of the middle 50% (such that they have more wealth under that system than they do under the current one)?

perfunctory 9y ago

> It just spurs on class resentment which is, if history is any guide, just about the worst way to go about things possible. Indeed, the worst thing slaves could do is to resent against their masters. I am sure there must have been a better way.

cal5k 9y ago
This is a classic logical fallacy called an "Appeal to Extremes" (https://www.logicallyfallacious.com/tools/lp/Bo/LogicalFallacies/30/Appeal-to-Extremes https://www.logicallyfallacious.com/tools/lp/Bo/LogicalFalla...). It is about as compelling as stomping your feet and yelling at the top of your lungs.

mythrwy 9y ago

Improved living conditions are great, but not at the cost of ceding almost full control of what goes on in the world to a small handful of people. Even if many of them are benevolent for now, it may not always be that way. It's simply not a safe system. We need a level of opportunity for all to advance. And that means some level of economic equality for all. This is a matter of intrinsic justice but also more importantly a matter of practicality to avoid the hazards of slavery, corruption, dynasty and stagnation. Inequality has always been, and likely always will be. And this natural and its fine (like most things) within certain parameters. Inequality doesn't doesn't need to exist at these extremes. Its dangerous.

antisthenes 9y ago

> People spend less as a percentage of income on food and housing, have better access to healthcare, and more leisure time than ever before A critical phrase uttered without any evidence. I urge you to look at the slice of people for whom housing and healthcare are increasingly out of reach, not just the globalization fairy tale you would like to focus on in your post.

drawkbox 9y ago

In game design, an imbalanced game is not fun for anyone. Games that allow both skilled/rich and less-skilled/poor players are common even in balanced games, and they are fun. The problem becomes when a few players are cheating or the game is imbalanced to the point that noone can win but the already winners and noone can have any fun. Right now we have inequality that is more like cheats in a game than a balanced, fun, fair game. Ultimately money wasn't designed to be hoarded, it was designed to be an exchange of value and services. Hoarded money that isn't put into action is taking from the game and the fun which cheats everyone.

eeZah7Ux 9y ago

> it really doesn't matter what the top 1% are doing so long as the bottom half are seeing improved living conditions. No. When inequality increases more people are necessarily below the average while a tiny minority gets way above average. The total wealth on the planet is divided among people. This is a basic economic fact. As inequality increases people are rewarded more for "climbing the ladder". Competition and selfishness increase and cooperation and solidarity decreases. > I think it's a natural human inclination to fixate This is the "human nature fallacy".

coliveira 9y ago

First of all it is an illusion to say that conditions have improved because of capitalism alone. In most of the places where people had some improvement, this happened because of socialist policies of wealth redistribution lead by the state, including in the USA. If you go back to the US of the 1910-1930s, most people lived in near poverty, with the "dream" of one day becoming something else, until a socialist plan of wealth redistribution called new deal was implemented. Second, wealth inequality is a direct threat to the democratic system. In a country that has extreme levels of wealth concentration as we see here in the US and elsewhere, it is very easy to enact policies that harm society in general in benefit of the minority that holds economic power. This in fact was the downfall of capitalist society in the 1920s. In such a society, there is big turmoil among the general population, which frequently leads to revolutions and economic disasters. We are just starting to see this pattern happening the the US, with increasingly big economic calamities such as in 2008 and political turmoil such as the election of Trump. I wouldn't be surprised if the US and similar countries are heading towards a popular revolution as we saw in the 19th and early 20th centuries.

JoeAltmaier 9y ago
Further, even if we give 'capital' a pass (the use of imaginary points to grease the wheels of trade) and move on to the Free Market. A market works if everybody has something to trade there. For those that bring only their labor (whether ditch digging, medicine or engineering) they have a finite value over their lifetime - they will never be wealthy as the top 1% are. Now automate. We no longer need the labor of millions to run the machine (country's industry). We need only a million. Then only a hundred thousand. Then none. What happens to the 'laborers'? They are dropped out of the bottom of the machine as scrap. Its this 'means of production' that gets us into trouble - when a few folks squat on it and call it 'theirs', the rest of us are reduce to marginal participants in the machine, expendable. Automation is happening in the US at an explosive rate. Heard about a factory coming back from China? Only because now even Chinese labor is too expensive, if you can automate. There are insignificant jobs 'coming back'. And there never will be any more, again. No, the age of labor is nearly over. And what will the millions of us do then?
- 9y ago

throw2016 9y ago

The knee jerk response of 'envy' to any discussion about inequality trivializes economic discussion. Given this is not mere conjecture but backed by hard data by the work of economists like Piketty[1] continued talk about envy betrays a camel in the sand approach. There is now consensus among leading economists like Stiglitz [2] and even bastions of neoliberalism like the University of Chicago and IMF that something has gone seriously wrong in the last 40 years. Piketty's data shows a dramatic increase in inequality since the 1980s with labour share of income shrinking with wages stagnant and essentially at the same levels as they were 40 years ago with disproportionate gains going to the top 1 percent. Grandiose claims about lifting 1 billion people out of poverty are meaningless without any data to back them up. Where, how was it achieved, how long it did take, which specific policies? Why haven't we been able achieve these results in the poorest parts of Asia, Africa and even the USA inspite of trying for the last 70 years? Contrary to the 'envians' no one cares about the rich in any serious economic discussion, but many do care about the majority in a society getting poorer, unequal outcomes, bad economic policies, lobbying and capture, exploitation, unemployment, underemployment as this can only lead to highly unstable societies.[3] [1] https://www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts https://www.newyorker.com/news/john-cassidy/pikettys-inequal... [2] https://www.theatlantic.com/business/archive/2015/11/stiglitz-heres-how-to-fix-inequality/413761/ https://www.theatlantic.com/business/archive/2015/11/stiglit... [3] http://evonomics.com/joseph-stiglitz-inequality-unearned-income/ http://evonomics.com/joseph-stiglitz-inequality-unearned-inc...

micky_25 9y ago

>... so long as the bottom half are seeing improved living conditions. What about western countries where people under 35 are dealing with high student debt, unaffordable housing, stagnate wages and "gig" economy jobs? Things look pretty glum unless you've got some form of inheritance on the horizon.

jblow 9y ago
The high student debt and unaffordable housing are almost entirely due to policies of the Democratic Party, a.k.a. the party that is supposedly trying to reduce income inequality. Interventions often don’t do what you wanted them to do.
- maoistinquisitr 9y ago
  I'm not a fan of Obama but one good thing he was doing towards the end was cracking down on fraudulent "higher education" programs milking students and the taxpayer. He was deliberately choking off the loan subsidy fraud game. Unfortunately, Trump immediately resumed the Bush policy of pumping up the student debt for worthless degrees bubble.
  - jblow 9y ago
    But that’s not the real problem. The real problem is that the legitimate schools have been able to raise their prices tremendously because the students have all this easy money given to them for just that purpose.
    - maoistinquisitr 9y ago
      Well, I agree, but that's definitely a totally bipartisan scam. It's not just the loan subisidies, though. A huge amount of federal policy building over 70 years shovels tax money towards "higher ed". Most major schools are de facto defense contractors.
    - cma 9y ago
      Tongue in cheek it can't help that people take advantage of states by getting cheap state subsidized tuition and then flee to low tax states when it pays off.

elihu 9y ago

> Furthermore, wealth isn't a static I win/you lose proposition In some areas that's true, but in others it isn't. There's only so much land, and if rich people own all the best places to live (i.e. the ones within reasonable driving range of jobs), then the poor people are stuck paying rent. Other examples are that the rich have a disproportionate influence on the political process, have greater control of the media, and increasingly (thanks to Facebook, Google, etc.. and advances in machine learning) they have fine-grained knowledge of the opinions and preferences of whole populations, knowledge which is used specifically to influence the behavior of those people -- mostly through ad placement, but also to influence elections (e.g. the recent Cambridge Analytica scandal).

mmcnl 9y ago
Your example would create an opportunity for companies to relocate to areas where where "poor" people live (and buying a house is affordable).
- elihu 9y ago
  It would, for awhile -- until the real-estate speculators catch on.

Tomminn 9y ago

Capitalism is an efficient mechanism for serving dollar weighted people. This is the central problem with massive inequality.

ksec 9y ago

>are doing so long as the bottom half are seeing improved living conditions I dont think much has changed for bottom half living conditions. Especially since QE. >People spend less as a percentage of income on food and housing Is that true though? If you take any housing prices and rent and compared to salary in the last 10 years.