6 ms·

Wealth inequality is soaring – here are the Why it’s happening

46 points by Ours90 9y ago

montrose 9y ago
Of the ten causes of inequality he lists, zero of them explain why Jeff Bezos or Larry Page or Mark Zuckerberg are so much richer than the rest of us. So here's another cause of inequality: that computers and the internet have made it easier to start a company that gets really big. You might think someone proposing x as a cause of inequality would check it against lists of rich people to see if it explained why they were rich. But few people who write about inequality ever seem to do this. I'm not sure why. Is it because they're far removed from the world of startups and don't understand how it works? Is it because they have pet theories they don't want to risk falsifying? In most cases I would guess a bit of both. Most people who write about increasing inequality seem to assume as an axiom that it's due to changes in policy, rather than changes in the world. But if you work your way down the Forbes 400, changes in the world are clearly a big factor. You could tax away 90% of Zuck's wealth, and he'd still be a billionaire.
- Mimino123 9y ago
  > here's another cause of inequality: that computers and the internet have made it easier to start a company that gets really big. I don't see how it is a problem. It is just another opportunity for talanted people to start their own business. Not everyone can run a company and not everybody's as creative or smart as someone who earns millions of dollars a year. So here's a question: why should someone, who doesn't have any abilities to run business, who isn't creative or smart have the same income per year? I don't really understand what's equal about this.
  - montrose 9y ago
    I agree with you: I don't think it's a problem either. But people who start from the axiom that inequality is bad have the choice of either claiming it's bad that people can start companies that grow fast, or not seeing this source of inequality. Most seem to choose the latter.
    - pron 9y ago
      The claim isn't that inequality is bad; it's that a certain level of inequality is bad, and the call isn't for full equality, but for more equality. The reason it's bad, really bad, is this: https://news.ycombinator.com/item?id=16592641 https://news.ycombinator.com/item?id=16592641
    - contravariant 9y ago
      You seem to be implicitly assuming that it's inevitable for fast growing companies to lead to more inequality.
  - salawat 9y ago
    Because money is a finite resource, is only useful when it moves, and when only a few people hold the majority of the purse strings, they gain an inordinate say in what problems get enough funding thrown at them to be solved either through active favoritism or passive inaction? Please, we all know someone is going to make the argument you just did. It is the lowest effort, most intellectually shallow argument you can start with. In fact, it's a thinly veiled ad hominem if you think it through long enough as it boils down to "Poor people are poor because they suck." In the United States, we hold it to be self-evident that all men are created equal. Period. When inequality of some form becomes so ingrained in our society so as to become everyday and even praised, it is only natural for a culture that holds equality amongst people as a core characteristic to wonder if something may be a bit off about the system. To answer your question... Why should someone who acts as an executive be worth so much more than the carpenter or operator in the eyes of their fellow men? Businesses are social structures, nominally intended to benefit society (often redefined as shareholders for the hard core capitalists out there) as a whole. Yet... We see that executives and C levels get an exaggerated share of the value produced by the structure. "But they have business savvy!" I imagine someone would retort. Doesn't justify the compensation disparity. They just got an MBA and learned about how to structure a business while the carpenter was learning to woodwork. A business for business sake without professionals capable of understanding and executing the craft or service at hand is meaningless. "No one would accept the responsibility without that level of compensation! It's too straining!" Another may retort. That sounds a bit disingenuous to me. Is it mentally straining? Of course. Not so much so that orders of magnitude difference should justifiably exist between the average worker and the top of the pyramid. Nominally, everyone should have an equal chance to start a successful business. Realistically, the later you come to the game, the more the cards are stacked against you, and in favor of everyone who is already there. I would like to see society move in a direction where there wasn't so much incentive to "get money at all costs", but rather to solve pressing issues that are having a clear and present deleterious effect on society. The inability of many mundane laborers to be able to keep up with the market is one sych issue.
  - bryanlarsen 9y ago
    There are lots of factors that are just as important to success as creativity and intelligence like the ability to take risks (you can't be an entrepreneur if the business failing means your children starve), access to capital (a modern internet business doesn't need much, but it does need some. Can you rent a server on AWS without a credit card?) and probably most importantly, plain old luck.
- azinman2 9y ago
  Or globalization that eliminated middle classes. Or compounding exponential growth from existing wealth. Or shifting of money away from labor towards owners, compensated with stock that has disproportionally grown in recent years. Or...
- bogle 9y ago
  Those are outliers, I think. Most wealth is family wealth and it is measured in the billions of assets under management. The land is owned. The companies are owned. The bonds and share certificates are in the bank.
  - montrose 9y ago
    I believe only about a third of big fortunes are inherited.
    - bogle 9y ago
      Perhaps someone else knows the actual ratio of inherited to earned wealth. I'm sure it varies but the majority of people, in fact almost all of them, are not going to win the lottery. My experience of wealth has been through working in financial services where families have billions (UKP) in assets and whole firms managing that for them for many generations. Also of living in a country that's been owned in very large chunks for hundreds of years (Scotland).
      - TangoTrotFox 9y ago
        In America at least 67% of all "high-net-worth" individuals are self made, with only 8% directly inheriting their wealth. [1] If you consider only men (as women have an easier time marrying into wealth) 76% are self made. I don't think individual wealth is any big secret. The two pathways are either work for others and live well below your means -- an individual earning $50k and living on $20k is a millionaire in 17 years if he tosses that extra in index funds. Or start a business. The problem is that most of us consume near to what we earn, even when that's not necessary and don't have the ambition to start your own business, which now a days can start as simple setting up a webpage or selling some craft online where there is enormous amounts of free support. So becoming wealthy is impossible without, as you put it, winning the lottery. I completely agree with you that dynastic wealth is a huge negative, but at least in America it's not as huge a deal as it would seem. And I think people like Bill Gates are at least going in the right direction. He will be giving each of his offspring 'only' $10 million in inheritance. That's an enormous amount of money, but it's also literally about 1/10000th of his peak wealth. If your parents were worth $1 million, it'd be like them giving you an inheritance of $100. But I'm not sure this direction should be forced. Though I used to find a death tax very reasonable, lately I've come to wonder how justified it is, from the perspective of liberty, for a government to forcibly seize some large majority of the assets of an individual in passing, just because they happened to live a very successful life. And even if we do find this reasonable, enactment is going to be dubious at best as it would simply encourage people to distribute their assets, prior to death, to the same people it would have gone to previously by right of will. [1] - https://www.fa-mag.com/news/most-millionaires-self-made--study-says-14565.html https://www.fa-mag.com/news/most-millionaires-self-made--stu...
- crdoconnor 9y ago
  >Of the ten causes of inequality he lists, zero of them explain why Jeff Bezos, Larry Page, and Mark Zuckerberg are so much richer than the rest of us. #1 is the tax code and the tax code explains a lot of how those three got so rich (e.g. Amazon's sales tax avoidance). >I'm not sure why. Is it because they're far removed from the world of startups and don't understand how it works? Out of curiosity how close are you to the field of tax avoidance?
  - ben_w 9y ago
    The problem with saying it’s the tax code is that there are so few else who also became that rich despite having the same tax code. Personally I think it’s luck, a lottery with no upper bound with ever diminishing odds of winning as the prize goes up.
    - montrose 9y ago
      Luck is a big factor in the success of startups, but it is not the only factor. E.g. Jeff Bezos is lucky, but he's not merely lucky.
      - ben_w 9y ago
        Certainly. I do not mean to imply it is only luck, merely that luck is the major difference between him and any of my successful private sector employers.
    - crdoconnor 9y ago
      >The problem with saying it’s the tax code is that there are so few else who also became that rich The whole point of the article is that there are more ultra wealthy now than there ever were before. >Personally I think it’s luck So what, some people are just luckier now?
      - ben_w 9y ago
        > So what, some people are just luckier now? Yes. Partly. Peak relative wealth — or the specific Gini coefficient — is not something I would expect to be constant, but is something I expect to be modified by social policies more than tax rates: what the money is spent on is more important than how much is raised.
- JDiculous 9y ago
  I don't see what Jeff Bezos's wealth has to do with computers and the internet (aside from the fact that it's Amazon's domain of business). Andrew Carnegie and John Rockefeller were wealthier than him. Increasing inequality is the natural trend of capitalism because it's easier to make money when you have more money. The only way to reduce this is to raise taxes (like we did with our 70% marginal tax rate on incomes over $5 million/yr in 1940 in today's dollars). Problem is we elect politicians that don't make this happen.
marcrosoft 9y ago
What does wealth equality even mean and why should we pursue it? What would happen if everyone was magically given a distribution of “wealth”? Would there be anything to give?
- Frondo 9y ago
  Look man, you don't need to care. That's the nice thing about politics, you don't need to care about anything. Lots of us do, because the fact that the three richest people in America own as much as the poorest half combined tells us that the laws that govern our playing field may not be presenting a particularly fair or level playing field, despite claims that anyone can work hard and win at life. Wealth inequality is a problem for those of us who do care because we want a society that actually does work for everyone in some semblance of similar proportion, not one in which everything is peachy for a few, miserable for the rest; this one doesn't seem like it is. Again, you don't have to care.
  - defterGoose 9y ago
    Thanks for this reply. Calling someone out quickly and civilly for posting a shallow, ontological quip is one of the best things we can do to keep this type of serious conversation fact-based, on-focus, and troll-free. Too often nowadays these things can devolve into semantic wankfests with little semblance to "fact" or "truth".
  - tudelo 9y ago
    The problem I have with what you are saying is what you are referring to as the "laws that govern our playing field." What do you mean that they are not fair? How do you make them fair? Also, it's not like these people became rich overnight. Do you think Bezos spent a lot of time complaining about a lack of opportunity? And do you think that most people would want to (or even be able to) live a life like he does?
  - refurb 9y ago
    So if I'm understanding you correctly, if the "playing field was level", we wouldn't have inequity? Or as much? I'm not sure I agree with that.
commentb0t82 9y ago
My opinions regarding wealth inequality changed drastically when I realized that a stray dog has more wealth than one third of Americans. You can live in a nice house, drive a few nice cars, and send your kids to nice private schools with near zero wealth - or even with negative wealth.
bogle 9y ago
Eat the Rich. Nosh! Nosh! Nosh!
rossdavidh 9y ago
Completely nothing about globalization and free trade between countries of very different wage levels. Lots of things that indicate that we would be better off with bitcoin instead of regular money. Author is also an author of a book about bitcoin. Hmmm...
- pjc50 9y ago
  Yeah, this is a goldbug's list. "Quantitative easing", CPI, "Debt-based money", "Zero interest-rate policies", and "The decline in the purchasing power of money". Raising the interest rate would constrain investment and lead to recession. This is a key part of the conventional understanding of interest rate/inflation links, which have been managed fairly effectively in the West for decades. The only really sound thing he says is "Wages have not risen by the same amount. Those who rely on their salaries to get by have suffered an inexorable erosion of their wealth. Those who own assets have made good."
sjbase 9y ago
I find it suspicious that every one of these causes is a form of fiscal or monetary policy. Keywords that don't exist in this article: Job, Workforce, Education, Technology. None of those even get a place in the top 10?
- maxsilver 9y ago
  For the kind of equality being discussed, none of those things really matter. The best job in the world, the best education in the world, the best technology in the world, none of that really fixes this problem. A fiscal/monetary policy problem like this is potentially best served with a fiscal/monetary policy fix.
SlowBro 9y ago
Taxing the rich seems to be one of the hardest things in the world to do. They can afford the best lobbyists to influence politicians to write loopholes in whatever laws you can think of to tax them; they can hire the best accountants to shelter assets from those laws; they can hire the best lawyers to help them get off the hook if they breech those laws; and if they become too unpopular here, they can afford the high price of gaining citizenship in other nations. Better solutions are needed.
- Retric 9y ago
  Sometimes the best solution is to do something hard.
  - SlowBro 9y ago
    Has it ever worked? Any examples in the long term of sustained taxing of the wealthy?
    - virgilp 9y ago
      Perhaps the better question is "what has changed that could make it workable now?". For example, in an interconnected world like today's, some countries actually do have massive power. Take the anti-corruption laws that say a multinational corporation can face stiff penalties at home for corruption that happens abroad - AFAIK, while not perfect, they're not ineffective either. If, say, US would pass laws that allow them to tax everything that touches/ does business with a wealthy individual - that would make it very hard for said individual to avoid taxes (relocation to other countries doesn't help, and avoiding any business with US is impractical). I mean - what I present here is certainly not a "workable idea", but the gist of it should be that "because it was impossible in the past, it's not necessarily impossible in the future".
      - SlowBro 9y ago
        > If, say, US would pass laws that allow them to tax everything that touches/ does business with a wealthy individual - that would make it very hard for said individual to avoid taxes Who would pass these laws; politicians, right? The same politicians who are influenced by lobbyists, right? You might then outlaw lobbying but the wealthy would just find another way to bring influence, wouldn’t they?
baybal2 9y ago
Do you people known that medieval Europe had double digit property and land taxes? Kings and emperors back then were way more afraid of somebody becoming richer than them; the modern day political establishment not so much.
- contravariant 9y ago
  I'm confused. Are you advocating for lower taxes to prevent the political establishment from enriching themselves, or are you advocating that employees revolt and overthrow the executives to install a more democratic management?
  - baybal2 9y ago
    I'm not advocating anything here.
tabeth 9y ago
An interesting thing to consider is that even if you believe that the "rich" people deserve to have all of the assets, and consequently all of the risk, when something does happen they conveniently do not take the disproportionate amount of suffering that would be implied by their disproportionate amount of resources. You can see this all of the time: - CEOs get huge bonuses when the company is succeeding, but when the company fails there are layoffs. In the worst case they often leave with a large amount of severance compensation. In short I think the problem is a lack of alignment (in addition to many others). The other problem is that our "democracy" is highly crippled. I might even conjecture that in a functional democracy large inequality should be impossible as the large poor population would always take actions to restabilize things. ---- To elaborate on this last point. People in this thread are commenting on all of the "loop-holes". Those loopholes don't really matter. In a functional democracy the poor would simply find all of them and vote to have them removed. I don't think "the poor" care about others having more wealth than them any more than they care that some are taller than them. The issue is that the current level of inequality is, dare I say it, unnatural. Take any human property you want -- height, weight, intelligence, mile time, anything objective. You'll see that the distribution in ability for that property (or properties) is no where even close to the wealth distribution. So, maybe the natural wealth distribution should be closer to the distribution of those "natural" properties.
padobson 9y ago
Whenever I see these inequality articles, I feel the need to mention a few things: - The "1%" is ever changing, the mobility in and out of that group has only increased over time [0] - Most measures of inequality are local or national. The same markets that have enriched the 1% have also brought a billion people out of poverty globally in the last 30 years. [1] Globally, workers are doing better than ever. - The practicality of inequality changes over time. Most people in the middle 50% in developed nations live better than the .1% of a hundred years ago. Inequality may be a problem, but it's not an existential threat or even a primary concern to developed countries. [0]https://marginalrevolution.com/marginalrevolution/2014/04/mobility-in-and-out-of-the-top-one-percent.html https://marginalrevolution.com/marginalrevolution/2014/04/mo... [1]https://www.economist.com/news/international/21719790-going-will-be-much-harder-now-world-has-made-great-progress https://www.economist.com/news/international/21719790-going-...
- jazzyk 9y ago
  >Inequality may be a problem, but it's not an existential threat or even a primary concern to developed countries If a single person's net worth is more than a medium sized country's GDP, we DO have a problem. If you have $70B you can buy votes/governments (through "lobbying"). It is no longer a democracy, because a very rich person has many many votes, rather than one.
  - padobson 9y ago
    >>Inequality may be a problem, but it's not an existential threat or even a primary concern to developed countries >If a single person's net worth is more than a medium sized country's GDP, we DO have a problem. I added italics to parts of our respective posts. They seem to indicate we agree. We might disagree on the size of the problem or how to fix it, but that would be covering new ground.
- IkmoIkmo 9y ago
  I agree with a lot of points but... just want to note that you are referring to 1% income levels in your article, not wealth levels. Those are wildly different things. It's quite possible to earn a lot at some point in your life, temporarily being a top-earner in the country. Winning a lottery, cashing out capital gains on home equity or a business sale can do that. Or even having a really good year in a good job. The threshold is $390k of income in a year. But that's an entirely different notion from becoming part of the top 1% richest people in the country. Here's a graph on how wealth inequality is far worse than income inequality: http://inequality.comm.ccsu.edu/wp-content/uploads/2014/09/IncomeWealth.png http://inequality.comm.ccsu.edu/wp-content/uploads/2014/09/I... Now, income inequality tends not to matter too much beyond a certain figure. At some point, which is far below the 1% level, you get marginal returns to your income in terms of quality of life. However, wealth is different in that it affords so much power, which isn't compatible with democratic ideals where everyone's voice or vote is approximately equal. When 1% of the population holds 40% of the ownership and shareholder votes of all companies, land, factories etc, that can be problematic. And it is worsening. Again, I'm not terribly concerned and I don't see wealth inequality as inherently dangerous, but it is a problem and it isn't getting any better.
candiodari 9y ago
The thing that's worrying is that America and Europe are the only places where inequality is so small. Visit India or Africa once and take a look there.

46 points by Ours90 9y ago

Of the ten causes of inequality he lists, zero of them explain why Jeff Bezos or Larry Page or Mark Zuckerberg are so much richer than the rest of us. So here's another cause of inequality: that computers and the internet have made it easier to start a company that gets really big. You might think someone proposing x as a cause of inequality would check it against lists of rich people to see if it explained why they were rich. But few people who write about inequality ever seem to do this. I'm not sure why. Is it because they're far removed from the world of startups and don't understand how it works? Is it because they have pet theories they don't want to risk falsifying? In most cases I would guess a bit of both. Most people who write about increasing inequality seem to assume as an axiom that it's due to changes in policy, rather than changes in the world. But if you work your way down the Forbes 400, changes in the world are clearly a big factor. You could tax away 90% of Zuck's wealth, and he'd still be a billionaire.

Mimino123 9y ago
> here's another cause of inequality: that computers and the internet have made it easier to start a company that gets really big. I don't see how it is a problem. It is just another opportunity for talanted people to start their own business. Not everyone can run a company and not everybody's as creative or smart as someone who earns millions of dollars a year. So here's a question: why should someone, who doesn't have any abilities to run business, who isn't creative or smart have the same income per year? I don't really understand what's equal about this.
- montrose 9y ago
  I agree with you: I don't think it's a problem either. But people who start from the axiom that inequality is bad have the choice of either claiming it's bad that people can start companies that grow fast, or not seeing this source of inequality. Most seem to choose the latter.
  - pron 9y ago
    The claim isn't that inequality is bad; it's that a certain level of inequality is bad, and the call isn't for full equality, but for more equality. The reason it's bad, really bad, is this: https://news.ycombinator.com/item?id=16592641 https://news.ycombinator.com/item?id=16592641
  - contravariant 9y ago
    You seem to be implicitly assuming that it's inevitable for fast growing companies to lead to more inequality.
- salawat 9y ago
  Because money is a finite resource, is only useful when it moves, and when only a few people hold the majority of the purse strings, they gain an inordinate say in what problems get enough funding thrown at them to be solved either through active favoritism or passive inaction? Please, we all know someone is going to make the argument you just did. It is the lowest effort, most intellectually shallow argument you can start with. In fact, it's a thinly veiled ad hominem if you think it through long enough as it boils down to "Poor people are poor because they suck." In the United States, we hold it to be self-evident that all men are created equal. Period. When inequality of some form becomes so ingrained in our society so as to become everyday and even praised, it is only natural for a culture that holds equality amongst people as a core characteristic to wonder if something may be a bit off about the system. To answer your question... Why should someone who acts as an executive be worth so much more than the carpenter or operator in the eyes of their fellow men? Businesses are social structures, nominally intended to benefit society (often redefined as shareholders for the hard core capitalists out there) as a whole. Yet... We see that executives and C levels get an exaggerated share of the value produced by the structure. "But they have business savvy!" I imagine someone would retort. Doesn't justify the compensation disparity. They just got an MBA and learned about how to structure a business while the carpenter was learning to woodwork. A business for business sake without professionals capable of understanding and executing the craft or service at hand is meaningless. "No one would accept the responsibility without that level of compensation! It's too straining!" Another may retort. That sounds a bit disingenuous to me. Is it mentally straining? Of course. Not so much so that orders of magnitude difference should justifiably exist between the average worker and the top of the pyramid. Nominally, everyone should have an equal chance to start a successful business. Realistically, the later you come to the game, the more the cards are stacked against you, and in favor of everyone who is already there. I would like to see society move in a direction where there wasn't so much incentive to "get money at all costs", but rather to solve pressing issues that are having a clear and present deleterious effect on society. The inability of many mundane laborers to be able to keep up with the market is one sych issue.
- bryanlarsen 9y ago
  There are lots of factors that are just as important to success as creativity and intelligence like the ability to take risks (you can't be an entrepreneur if the business failing means your children starve), access to capital (a modern internet business doesn't need much, but it does need some. Can you rent a server on AWS without a credit card?) and probably most importantly, plain old luck.
azinman2 9y ago
Or globalization that eliminated middle classes. Or compounding exponential growth from existing wealth. Or shifting of money away from labor towards owners, compensated with stock that has disproportionally grown in recent years. Or...
bogle 9y ago
Those are outliers, I think. Most wealth is family wealth and it is measured in the billions of assets under management. The land is owned. The companies are owned. The bonds and share certificates are in the bank.
- montrose 9y ago
  I believe only about a third of big fortunes are inherited.
  - bogle 9y ago
    Perhaps someone else knows the actual ratio of inherited to earned wealth. I'm sure it varies but the majority of people, in fact almost all of them, are not going to win the lottery. My experience of wealth has been through working in financial services where families have billions (UKP) in assets and whole firms managing that for them for many generations. Also of living in a country that's been owned in very large chunks for hundreds of years (Scotland).
    - TangoTrotFox 9y ago
      In America at least 67% of all "high-net-worth" individuals are self made, with only 8% directly inheriting their wealth. [1] If you consider only men (as women have an easier time marrying into wealth) 76% are self made. I don't think individual wealth is any big secret. The two pathways are either work for others and live well below your means -- an individual earning $50k and living on $20k is a millionaire in 17 years if he tosses that extra in index funds. Or start a business. The problem is that most of us consume near to what we earn, even when that's not necessary and don't have the ambition to start your own business, which now a days can start as simple setting up a webpage or selling some craft online where there is enormous amounts of free support. So becoming wealthy is impossible without, as you put it, winning the lottery. I completely agree with you that dynastic wealth is a huge negative, but at least in America it's not as huge a deal as it would seem. And I think people like Bill Gates are at least going in the right direction. He will be giving each of his offspring 'only' $10 million in inheritance. That's an enormous amount of money, but it's also literally about 1/10000th of his peak wealth. If your parents were worth $1 million, it'd be like them giving you an inheritance of $100. But I'm not sure this direction should be forced. Though I used to find a death tax very reasonable, lately I've come to wonder how justified it is, from the perspective of liberty, for a government to forcibly seize some large majority of the assets of an individual in passing, just because they happened to live a very successful life. And even if we do find this reasonable, enactment is going to be dubious at best as it would simply encourage people to distribute their assets, prior to death, to the same people it would have gone to previously by right of will. [1] - https://www.fa-mag.com/news/most-millionaires-self-made--study-says-14565.html https://www.fa-mag.com/news/most-millionaires-self-made--stu...
crdoconnor 9y ago
>Of the ten causes of inequality he lists, zero of them explain why Jeff Bezos, Larry Page, and Mark Zuckerberg are so much richer than the rest of us. #1 is the tax code and the tax code explains a lot of how those three got so rich (e.g. Amazon's sales tax avoidance). >I'm not sure why. Is it because they're far removed from the world of startups and don't understand how it works? Out of curiosity how close are you to the field of tax avoidance?
- ben_w 9y ago
  The problem with saying it’s the tax code is that there are so few else who also became that rich despite having the same tax code. Personally I think it’s luck, a lottery with no upper bound with ever diminishing odds of winning as the prize goes up.
  - montrose 9y ago
    Luck is a big factor in the success of startups, but it is not the only factor. E.g. Jeff Bezos is lucky, but he's not merely lucky.
    - ben_w 9y ago
      Certainly. I do not mean to imply it is only luck, merely that luck is the major difference between him and any of my successful private sector employers.
  - crdoconnor 9y ago
    >The problem with saying it’s the tax code is that there are so few else who also became that rich The whole point of the article is that there are more ultra wealthy now than there ever were before. >Personally I think it’s luck So what, some people are just luckier now?
    - ben_w 9y ago
      > So what, some people are just luckier now? Yes. Partly. Peak relative wealth — or the specific Gini coefficient — is not something I would expect to be constant, but is something I expect to be modified by social policies more than tax rates: what the money is spent on is more important than how much is raised.
JDiculous 9y ago
I don't see what Jeff Bezos's wealth has to do with computers and the internet (aside from the fact that it's Amazon's domain of business). Andrew Carnegie and John Rockefeller were wealthier than him. Increasing inequality is the natural trend of capitalism because it's easier to make money when you have more money. The only way to reduce this is to raise taxes (like we did with our 70% marginal tax rate on incomes over $5 million/yr in 1940 in today's dollars). Problem is we elect politicians that don't make this happen.

marcrosoft 9y ago

What does wealth equality even mean and why should we pursue it? What would happen if everyone was magically given a distribution of “wealth”? Would there be anything to give?

Frondo 9y ago
Look man, you don't need to care. That's the nice thing about politics, you don't need to care about anything. Lots of us do, because the fact that the three richest people in America own as much as the poorest half combined tells us that the laws that govern our playing field may not be presenting a particularly fair or level playing field, despite claims that anyone can work hard and win at life. Wealth inequality is a problem for those of us who do care because we want a society that actually does work for everyone in some semblance of similar proportion, not one in which everything is peachy for a few, miserable for the rest; this one doesn't seem like it is. Again, you don't have to care.
- defterGoose 9y ago
  Thanks for this reply. Calling someone out quickly and civilly for posting a shallow, ontological quip is one of the best things we can do to keep this type of serious conversation fact-based, on-focus, and troll-free. Too often nowadays these things can devolve into semantic wankfests with little semblance to "fact" or "truth".
- tudelo 9y ago
  The problem I have with what you are saying is what you are referring to as the "laws that govern our playing field." What do you mean that they are not fair? How do you make them fair? Also, it's not like these people became rich overnight. Do you think Bezos spent a lot of time complaining about a lack of opportunity? And do you think that most people would want to (or even be able to) live a life like he does?
- refurb 9y ago
  So if I'm understanding you correctly, if the "playing field was level", we wouldn't have inequity? Or as much? I'm not sure I agree with that.

commentb0t82 9y ago

My opinions regarding wealth inequality changed drastically when I realized that a stray dog has more wealth than one third of Americans. You can live in a nice house, drive a few nice cars, and send your kids to nice private schools with near zero wealth - or even with negative wealth.

bogle 9y ago

Eat the Rich. Nosh! Nosh! Nosh!

rossdavidh 9y ago

Completely nothing about globalization and free trade between countries of very different wage levels. Lots of things that indicate that we would be better off with bitcoin instead of regular money. Author is also an author of a book about bitcoin. Hmmm...

pjc50 9y ago
Yeah, this is a goldbug's list. "Quantitative easing", CPI, "Debt-based money", "Zero interest-rate policies", and "The decline in the purchasing power of money". Raising the interest rate would constrain investment and lead to recession. This is a key part of the conventional understanding of interest rate/inflation links, which have been managed fairly effectively in the West for decades. The only really sound thing he says is "Wages have not risen by the same amount. Those who rely on their salaries to get by have suffered an inexorable erosion of their wealth. Those who own assets have made good."

sjbase 9y ago

I find it suspicious that every one of these causes is a form of fiscal or monetary policy. Keywords that don't exist in this article: Job, Workforce, Education, Technology. None of those even get a place in the top 10?

maxsilver 9y ago
For the kind of equality being discussed, none of those things really matter. The best job in the world, the best education in the world, the best technology in the world, none of that really fixes this problem. A fiscal/monetary policy problem like this is potentially best served with a fiscal/monetary policy fix.

SlowBro 9y ago

Taxing the rich seems to be one of the hardest things in the world to do. They can afford the best lobbyists to influence politicians to write loopholes in whatever laws you can think of to tax them; they can hire the best accountants to shelter assets from those laws; they can hire the best lawyers to help them get off the hook if they breech those laws; and if they become too unpopular here, they can afford the high price of gaining citizenship in other nations. Better solutions are needed.

Retric 9y ago
Sometimes the best solution is to do something hard.
- SlowBro 9y ago
  Has it ever worked? Any examples in the long term of sustained taxing of the wealthy?
  - virgilp 9y ago
    Perhaps the better question is "what has changed that could make it workable now?". For example, in an interconnected world like today's, some countries actually do have massive power. Take the anti-corruption laws that say a multinational corporation can face stiff penalties at home for corruption that happens abroad - AFAIK, while not perfect, they're not ineffective either. If, say, US would pass laws that allow them to tax everything that touches/ does business with a wealthy individual - that would make it very hard for said individual to avoid taxes (relocation to other countries doesn't help, and avoiding any business with US is impractical). I mean - what I present here is certainly not a "workable idea", but the gist of it should be that "because it was impossible in the past, it's not necessarily impossible in the future".
    - SlowBro 9y ago
      > If, say, US would pass laws that allow them to tax everything that touches/ does business with a wealthy individual - that would make it very hard for said individual to avoid taxes Who would pass these laws; politicians, right? The same politicians who are influenced by lobbyists, right? You might then outlaw lobbying but the wealthy would just find another way to bring influence, wouldn’t they?

baybal2 9y ago

Do you people known that medieval Europe had double digit property and land taxes? Kings and emperors back then were way more afraid of somebody becoming richer than them; the modern day political establishment not so much.

contravariant 9y ago
I'm confused. Are you advocating for lower taxes to prevent the political establishment from enriching themselves, or are you advocating that employees revolt and overthrow the executives to install a more democratic management?
- baybal2 9y ago
  I'm not advocating anything here.

tabeth 9y ago

An interesting thing to consider is that even if you believe that the "rich" people deserve to have all of the assets, and consequently all of the risk, when something does happen they conveniently do not take the disproportionate amount of suffering that would be implied by their disproportionate amount of resources. You can see this all of the time: - CEOs get huge bonuses when the company is succeeding, but when the company fails there are layoffs. In the worst case they often leave with a large amount of severance compensation. In short I think the problem is a lack of alignment (in addition to many others). The other problem is that our "democracy" is highly crippled. I might even conjecture that in a functional democracy large inequality should be impossible as the large poor population would always take actions to restabilize things. ---- To elaborate on this last point. People in this thread are commenting on all of the "loop-holes". Those loopholes don't really matter. In a functional democracy the poor would simply find all of them and vote to have them removed. I don't think "the poor" care about others having more wealth than them any more than they care that some are taller than them. The issue is that the current level of inequality is, dare I say it, unnatural. Take any human property you want -- height, weight, intelligence, mile time, anything objective. You'll see that the distribution in ability for that property (or properties) is no where even close to the wealth distribution. So, maybe the natural wealth distribution should be closer to the distribution of those "natural" properties.

padobson 9y ago

Whenever I see these inequality articles, I feel the need to mention a few things: - The "1%" is ever changing, the mobility in and out of that group has only increased over time [0] - Most measures of inequality are local or national. The same markets that have enriched the 1% have also brought a billion people out of poverty globally in the last 30 years. [1] Globally, workers are doing better than ever. - The practicality of inequality changes over time. Most people in the middle 50% in developed nations live better than the .1% of a hundred years ago. Inequality may be a problem, but it's not an existential threat or even a primary concern to developed countries. [0]https://marginalrevolution.com/marginalrevolution/2014/04/mobility-in-and-out-of-the-top-one-percent.html https://marginalrevolution.com/marginalrevolution/2014/04/mo... [1]https://www.economist.com/news/international/21719790-going-will-be-much-harder-now-world-has-made-great-progress https://www.economist.com/news/international/21719790-going-...

jazzyk 9y ago
>Inequality may be a problem, but it's not an existential threat or even a primary concern to developed countries If a single person's net worth is more than a medium sized country's GDP, we DO have a problem. If you have $70B you can buy votes/governments (through "lobbying"). It is no longer a democracy, because a very rich person has many many votes, rather than one.
- padobson 9y ago
  >>Inequality may be a problem, but it's not an existential threat or even a primary concern to developed countries >If a single person's net worth is more than a medium sized country's GDP, we DO have a problem. I added italics to parts of our respective posts. They seem to indicate we agree. We might disagree on the size of the problem or how to fix it, but that would be covering new ground.
IkmoIkmo 9y ago
I agree with a lot of points but... just want to note that you are referring to 1% income levels in your article, not wealth levels. Those are wildly different things. It's quite possible to earn a lot at some point in your life, temporarily being a top-earner in the country. Winning a lottery, cashing out capital gains on home equity or a business sale can do that. Or even having a really good year in a good job. The threshold is $390k of income in a year. But that's an entirely different notion from becoming part of the top 1% richest people in the country. Here's a graph on how wealth inequality is far worse than income inequality: http://inequality.comm.ccsu.edu/wp-content/uploads/2014/09/IncomeWealth.png http://inequality.comm.ccsu.edu/wp-content/uploads/2014/09/I... Now, income inequality tends not to matter too much beyond a certain figure. At some point, which is far below the 1% level, you get marginal returns to your income in terms of quality of life. However, wealth is different in that it affords so much power, which isn't compatible with democratic ideals where everyone's voice or vote is approximately equal. When 1% of the population holds 40% of the ownership and shareholder votes of all companies, land, factories etc, that can be problematic. And it is worsening. Again, I'm not terribly concerned and I don't see wealth inequality as inherently dangerous, but it is a problem and it isn't getting any better.

candiodari 9y ago

The thing that's worrying is that America and Europe are the only places where inequality is so small. Visit India or Africa once and take a look there.