4 ms·

I don't think three examples are representative of the wealthy overall. I didn't say 'no rich get richer'; beyond a doubt, some do - and that's fine and fully c

I don't think three examples are representative of the wealthy overall. I didn't say 'no rich get richer'; beyond a doubt, some do - and that's fine and fully compatible with meritocracy. The question is, what is the overall trend? Is there social mobility, opportunity and meritocracy, or aristocratic power and inheritence?

MR4D 8y ago
Ok. Interesting point you have. But let’s dive into something that shows how statstics can get really skewed: Take money 100 years ago. The richest guy on the planet (ignoring royalty, as those figures aren’t reliable) was John D Rockefeller. He was worth a ton of money, possibly even a billion dollars. Today’s richest man in Jeff Bezos, worth about 100 times that (depending on the stock price, somewhere roughly between 100-125 billion). So today, people say that the wealth gap is growing. Indeed, the rich are richer. However, at his peak, Rockefeller was worth about 1.5% of GDP ( a truly crazy sum of money that equates to roughly $350 billion today). So if we look at inflation-adjusted money, the rich are poorer than they were 100 years ago - indeed, Rockefeller was about 3 times richer than Bezos. So depending on the metric, the rich are getting richer, and wealth disparities are growing. But when you normalize for inflation one other factors, the disparity is not growing. Also, if you take the poorest person at the world with zero dollars, and the richest person in the world with one more dollar, than the wealth disparity is growing, and headlines shout out crazy stuff that sets everyone’s emotions. But zero will always be the lower bound, and the number at the top will always grow (assuming inflation). So is disparity growing or now? Well, I think the best way to answer that is ask this question: “would you rather be you today, or Rockefeller 100 years ago?” I’d rather be me. Between the internet, healthcare, cars, planes, etc, I’m way richer than Rockefeller, because despite all that money, he couldn’t begin to buy those things. So society has gotten much richer, and the disparity between me and Bezos is smaller than between me and Rockefeller. Also, I don’t have to really be worried about dying from the flu. Rockefeller did - even a simple infection could kill him, but unlikely to kill you or me.
- forapurpose 8y ago
  Economists aren't stupid, and they've thought of these things like zero lower bound. This is a well-studied issue. When people say the concentration of wealth is increasing, they aren't saying it's increasing relative to Rockefeller's time (how far back should we go? 1492? The start of the neolithic?), but it's increasing now, such as over the last few decades.
  - MR4D 8y ago
    I get your point, but have a couple issues. First, there are plenty of stupid economists. Just like there are plenty of stupid people in finance or politics, or many other things. But I’m not going to debate that particular thing, and I’m fine if we disagree. * That being said, the timespan question is very valid, but pinnning down the cause is really hard. If you read the research, the highest correlation is with globalization, not taxes. Let’s pretend you fully buy into that statement. If so, would you argue against globalization? And I mean that as a serious question. This is a really hard problem, and the answers are more like foggy hints than anything else. But if we’re really honest with ourselves, and the answer was yes, what should we do about it? Taxation is hard because it immediately districts the natural market and causes many second order effects. Pulling those apart to understand the root cause is really hard and few people can do it at all, let alone well. *My main issue is that economists tend to have a poor understand of statistics and cause and effect relative to what they need to really do their job. If you listen to Ed Yardeni, he basically throws out all macro-economics as being a sad state of affairs given how bad their models are compared to the reality they’re supposed to predict. Still worse, novel prize winners continue to spout their theories after they have been proven empirically wrong. Hence my general issue with the field. Some are clearly smart, but enough aren’t that gives me great pause.

MR4D 8y ago

Ok. Interesting point you have. But let’s dive into something that shows how statstics can get really skewed: Take money 100 years ago. The richest guy on the planet (ignoring royalty, as those figures aren’t reliable) was John D Rockefeller. He was worth a ton of money, possibly even a billion dollars. Today’s richest man in Jeff Bezos, worth about 100 times that (depending on the stock price, somewhere roughly between 100-125 billion). So today, people say that the wealth gap is growing. Indeed, the rich are richer. However, at his peak, Rockefeller was worth about 1.5% of GDP ( a truly crazy sum of money that equates to roughly $350 billion today). So if we look at inflation-adjusted money, the rich are poorer than they were 100 years ago - indeed, Rockefeller was about 3 times richer than Bezos. So depending on the metric, the rich are getting richer, and wealth disparities are growing. But when you normalize for inflation one other factors, the disparity is not growing. Also, if you take the poorest person at the world with zero dollars, and the richest person in the world with one more dollar, than the wealth disparity is growing, and headlines shout out crazy stuff that sets everyone’s emotions. But zero will always be the lower bound, and the number at the top will always grow (assuming inflation). So is disparity growing or now? Well, I think the best way to answer that is ask this question: “would you rather be you today, or Rockefeller 100 years ago?” I’d rather be me. Between the internet, healthcare, cars, planes, etc, I’m way richer than Rockefeller, because despite all that money, he couldn’t begin to buy those things. So society has gotten much richer, and the disparity between me and Bezos is smaller than between me and Rockefeller. Also, I don’t have to really be worried about dying from the flu. Rockefeller did - even a simple infection could kill him, but unlikely to kill you or me.

forapurpose 8y ago
Economists aren't stupid, and they've thought of these things like zero lower bound. This is a well-studied issue. When people say the concentration of wealth is increasing, they aren't saying it's increasing relative to Rockefeller's time (how far back should we go? 1492? The start of the neolithic?), but it's increasing now, such as over the last few decades.
- MR4D 8y ago
  I get your point, but have a couple issues. First, there are plenty of stupid economists. Just like there are plenty of stupid people in finance or politics, or many other things. But I’m not going to debate that particular thing, and I’m fine if we disagree. * That being said, the timespan question is very valid, but pinnning down the cause is really hard. If you read the research, the highest correlation is with globalization, not taxes. Let’s pretend you fully buy into that statement. If so, would you argue against globalization? And I mean that as a serious question. This is a really hard problem, and the answers are more like foggy hints than anything else. But if we’re really honest with ourselves, and the answer was yes, what should we do about it? Taxation is hard because it immediately districts the natural market and causes many second order effects. Pulling those apart to understand the root cause is really hard and few people can do it at all, let alone well. *My main issue is that economists tend to have a poor understand of statistics and cause and effect relative to what they need to really do their job. If you listen to Ed Yardeni, he basically throws out all macro-economics as being a sad state of affairs given how bad their models are compared to the reality they’re supposed to predict. Still worse, novel prize winners continue to spout their theories after they have been proven empirically wrong. Hence my general issue with the field. Some are clearly smart, but enough aren’t that gives me great pause.