8 ms·

"The point is, money spent on consumption is toxic — value-destroying" This is something I've been thinking about a lot recently. Surely when comparing inequal

by ganonm 8y ago

"The point is, money spent on consumption is toxic — value-destroying" This is something I've been thinking about a lot recently. Surely when comparing inequality in societies, what we really care about is consumption. Singling out billionaires as an example of how unequal our society, I feel, is disingenuous. How much more does Bill Gates really consume than your 'average Joe'? Sure, he presumably eats good food, wears better clothing and has a big house, but his personal consumption levels are probably no more than an order of magnitude greater than ours. What separates him then from us, considering he has a paper net worth many orders of magnitude greater than us? Well, mainly that wealth grants him an outsize influence on the economy. By virtue of his wealth and participation in the stock market he has access to some very big 'levers'. He can dictate what a large portion of the workforce choose to pursue as 'productive economic output'. He is, by means of increasing his net worth, incentivised to make prudent decisions in this regard. High performing participants in the stock market gain more influence in it. This is an optimising feedback loop for the economy and is less fair (but more effective) than simply giving everyone an equal say in the matter. Is this a problem? Maybe. But does it really make our society more unequal? I would argue 'not as much as you might think'.

notahacker 8y ago
> High performing participants in the stock market gain more influence in it. This is an optimising feedback loop for the economy and is less fair (but more effective) than simply giving everyone an equal say in the matter. This assumes decisions which drive up the share price of Microsoft and/or the personal satisfaction of Bill Gates tends to yield better economic performance than decisions which represent what the public want. There's good reason to believe there are many situations where this isn't the case (the Gates Foundation's projects to help humanity are a thing, but so are battles for monopoly power). Wealth also tends to be much more heritable than entrepreneurial vision...
- ganonm 8y ago
  Your point about inheritance is a very good one and is a rather major flaw in the capitalist model. Inheritance tax goes some way to dampening the transfer of power from one generation to the next but isn't perfect. Hard to see how this would conceptually be solved without required a 'robin hood' style system that 'resets' everyone's economic status regardless of who their parents are.
marnett 8y ago
You began by comparing Bill Gates to us as consumers, but ended comparing him to an institution, of which he is. His personal wealth is managed by a private investment company, and his impacts on the economy are matched only by others of equal diversified wealth, world governments, and other powerful institutions. Bill Gates being one man with the power of governments and institutions is the inequality we are all talking about.
- airstrike 8y ago
  Did you create the same value to society as Bill Gates? So why do you think you deserve the same wealth?
  - bmer 8y ago
    Because they are a human being.
    - airstrike 8y ago
      And every human being is entitled to the same amount of wealth? Good luck with that battle.
      - gshubert17 8y ago
        Perhaps every human being is entitled to equal dignity. A certain level of wealth (dependent on the size of population and level of development) might be necessary to maintain one's dignity. Within families we do not keep tallies of who owes what to whom. My parents did not present me on my 18th birthday with an itemized bill of what I had cost them. Nor did I do that to my children. Economics should be a servant of society, not vice versa. Unfair distributions of dignity, income, wealth, and power seem easier to accomplish within large entities (corporations, governments) compared to families or tribes. Division of labor and specialization make it easier to justify unequal and unfair treatment. What changes do we make to our values and ways of organizing ourselves, to have more just outcomes?
gizmo686 8y ago
Instead of looking at his influence on the evonomy generally, I would look at the Gates foundation (where he has pledged most of his net worth) specifically. The Gates foundation directs a large amount of resources not to "prudent economic decisions" (eg, it looses money), but to non economic priorities he set. I have no particular complaints about the Gates foundation specifically, but in an idealized democracy, this scale of resource utilization would be subject to more democratic oversight (eg. Compare the CDC fighting malaria with appropriations from an elected congress to the Gates foundation doing so with appropriations from Bill Gates). In practice, there is a lot of overhead to the democratic proceds, so we want more private charity then is ideal. And you are correct that there seems to be a limit on how much resources people consume before they start helping others (even if the way they help does not match the priorites of the general public)
- ganonm 8y ago
  "The Gates foundation directs a large amount of resources not to "prudent economic decisions" (eg, it looses money), but to non economic priorities he set." This is true, and although certainly not a bad thing, is perhaps a sub-optimal allocation of economic output. There is perhaps an argument for having individuals with enough power to do this as a means of making decisions that are sub-optimal in the here and now, but over long enough spans of time turn out to be optimum. Another example would be investing in renewable energies.
  - gizmo686 8y ago
    The two pricipled ways I have heard for determining resource allocation are democracy and markets. Private philanthropy follows neither. As I alluded to above, there are certainly practical benifits of private philanthropy, as our democratic institutions are systematically bad at certain classes of problems.
lumberjack 8y ago
> How much more does Bill Gates really consume than your 'average Joe'? A lot. Just consider his preventative health care. I would bet it runs in the millions per year. Then consider the education and opportunities that he and his children got. And then consider that normal people cannot have those same things precisely because Bill Gates and his ilk lobby against any measures that might put some of the country's wealth towards those goals.
- antidesitter 8y ago
  > Bill Gates and his ilk lobby against any measures that might put some of the country's wealth towards those goals. Can you elaborate?
munificent 8y ago
> Sure, he presumably eats good food, wears better clothing and has a big house, but his personal consumption levels are probably no more than an order of magnitude greater than ours. The median home price in Seattle is ~$700k, and Gate's house cost $127 million, so his consumption is probably much closer to two orders of magnitude greater.
naravara 8y ago
>High performing participants in the stock market gain more influence in it. This is an optimising feedback loop for the economy and is less fair (but more effective) than simply giving everyone an equal say in the matter. It gets worse. They not only get more influence in the stock market, but their access to wealth gives them outsized influence in stuff that has nothing to do with the stock market and where the logic of finance capitalism can actually be destructive to the central mission of the activity. This happens in government, the arts, the academy, sport, charity, etc. The dominance of business-people in the business sphere allows them to dominate all other spheres despite being manifestly unqualified due to the fact that politics, education, art, etc. operate on different value systems than businesses do.
afgioionio 8y ago
https://en.wikipedia.org/wiki/Bill_Gates%27s_house https://en.wikipedia.org/wiki/Bill_Gates%27s_house Bill Gates lives in a $147 million home. He spends far more than ten times as much as the average person.

by ganonm 8y ago

notahacker 8y ago

> High performing participants in the stock market gain more influence in it. This is an optimising feedback loop for the economy and is less fair (but more effective) than simply giving everyone an equal say in the matter. This assumes decisions which drive up the share price of Microsoft and/or the personal satisfaction of Bill Gates tends to yield better economic performance than decisions which represent what the public want. There's good reason to believe there are many situations where this isn't the case (the Gates Foundation's projects to help humanity are a thing, but so are battles for monopoly power). Wealth also tends to be much more heritable than entrepreneurial vision...

ganonm 8y ago
Your point about inheritance is a very good one and is a rather major flaw in the capitalist model. Inheritance tax goes some way to dampening the transfer of power from one generation to the next but isn't perfect. Hard to see how this would conceptually be solved without required a 'robin hood' style system that 'resets' everyone's economic status regardless of who their parents are.

marnett 8y ago

You began by comparing Bill Gates to us as consumers, but ended comparing him to an institution, of which he is. His personal wealth is managed by a private investment company, and his impacts on the economy are matched only by others of equal diversified wealth, world governments, and other powerful institutions. Bill Gates being one man with the power of governments and institutions is the inequality we are all talking about.

airstrike 8y ago
Did you create the same value to society as Bill Gates? So why do you think you deserve the same wealth?
- bmer 8y ago
  Because they are a human being.
  - airstrike 8y ago
    And every human being is entitled to the same amount of wealth? Good luck with that battle.
    - gshubert17 8y ago
      Perhaps every human being is entitled to equal dignity. A certain level of wealth (dependent on the size of population and level of development) might be necessary to maintain one's dignity. Within families we do not keep tallies of who owes what to whom. My parents did not present me on my 18th birthday with an itemized bill of what I had cost them. Nor did I do that to my children. Economics should be a servant of society, not vice versa. Unfair distributions of dignity, income, wealth, and power seem easier to accomplish within large entities (corporations, governments) compared to families or tribes. Division of labor and specialization make it easier to justify unequal and unfair treatment. What changes do we make to our values and ways of organizing ourselves, to have more just outcomes?

gizmo686 8y ago

Instead of looking at his influence on the evonomy generally, I would look at the Gates foundation (where he has pledged most of his net worth) specifically. The Gates foundation directs a large amount of resources not to "prudent economic decisions" (eg, it looses money), but to non economic priorities he set. I have no particular complaints about the Gates foundation specifically, but in an idealized democracy, this scale of resource utilization would be subject to more democratic oversight (eg. Compare the CDC fighting malaria with appropriations from an elected congress to the Gates foundation doing so with appropriations from Bill Gates). In practice, there is a lot of overhead to the democratic proceds, so we want more private charity then is ideal. And you are correct that there seems to be a limit on how much resources people consume before they start helping others (even if the way they help does not match the priorites of the general public)

ganonm 8y ago
"The Gates foundation directs a large amount of resources not to "prudent economic decisions" (eg, it looses money), but to non economic priorities he set." This is true, and although certainly not a bad thing, is perhaps a sub-optimal allocation of economic output. There is perhaps an argument for having individuals with enough power to do this as a means of making decisions that are sub-optimal in the here and now, but over long enough spans of time turn out to be optimum. Another example would be investing in renewable energies.
- gizmo686 8y ago
  The two pricipled ways I have heard for determining resource allocation are democracy and markets. Private philanthropy follows neither. As I alluded to above, there are certainly practical benifits of private philanthropy, as our democratic institutions are systematically bad at certain classes of problems.

lumberjack 8y ago

> How much more does Bill Gates really consume than your 'average Joe'? A lot. Just consider his preventative health care. I would bet it runs in the millions per year. Then consider the education and opportunities that he and his children got. And then consider that normal people cannot have those same things precisely because Bill Gates and his ilk lobby against any measures that might put some of the country's wealth towards those goals.

antidesitter 8y ago
> Bill Gates and his ilk lobby against any measures that might put some of the country's wealth towards those goals. Can you elaborate?

munificent 8y ago

> Sure, he presumably eats good food, wears better clothing and has a big house, but his personal consumption levels are probably no more than an order of magnitude greater than ours. The median home price in Seattle is ~$700k, and Gate's house cost $127 million, so his consumption is probably much closer to two orders of magnitude greater.

naravara 8y ago

>High performing participants in the stock market gain more influence in it. This is an optimising feedback loop for the economy and is less fair (but more effective) than simply giving everyone an equal say in the matter. It gets worse. They not only get more influence in the stock market, but their access to wealth gives them outsized influence in stuff that has nothing to do with the stock market and where the logic of finance capitalism can actually be destructive to the central mission of the activity. This happens in government, the arts, the academy, sport, charity, etc. The dominance of business-people in the business sphere allows them to dominate all other spheres despite being manifestly unqualified due to the fact that politics, education, art, etc. operate on different value systems than businesses do.

afgioionio 8y ago

https://en.wikipedia.org/wiki/Bill_Gates%27s_house https://en.wikipedia.org/wiki/Bill_Gates%27s_house Bill Gates lives in a $147 million home. He spends far more than ten times as much as the average person.