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This seems like an obvious consequence of globalism and the nature of the labor market. Also seems consistent with Picketty’s thesis about capital growth. The d

This seems like an obvious consequence of globalism and the nature of the labor market. Also seems consistent with Picketty’s thesis about capital growth. The days when being a US citizen gauranteed affluence are coming to a close. To see the future look at California; refugees from Guatemala living amongst young millionaires, mostly immigrants also. A global community, sliced into ever narrower tranches by the invisible hand. It’s the future we choose.

hash872 8y ago
Much of Piketty's work has been widely debunked, especially r > g, so I'm not sure why one would start with his thesis. Top 1% income earners are typically business founder-owners, and reams of evidence from the Forbes 400 to tax data show that the wealthiest in US society are entrepreneurs who again created their own business- not rentiers living off of inherited wealth. (Anecdotally, children of inherited wealth they didn't earn burn through cash so fast that r < g, not the other way around). I have no idea what 'globalism' means in this context, or what type of alternate reality could exist where foreigners would be polite enough to not, like, turn a wrench or run an assembly line for cheaper than Americans did in the 50s. We as a country don't have the option of 'choosing' an alternate economic reality where developing country wages aren't cheaper than ours
- therealforsen 8y ago
  i think by globalism he means that free trade brings with it the free movement of labor across countries >what type of alternate reality could exist where foreigners would be polite enough to not, like, turn a wrench or run an assembly line for cheaper than Americans did in the 50s. We as a country don't have the option of 'choosing' an alternate economic reality where developing country wages aren't cheaper than ours the illusion of non-choice on this issue began when bill buckley reformed the right wing into free-traders. we could vote to not let foreigners in to our country and to establish high tariffs on foreign goods. we choose not to. not saying whether that's right or wrong. just saying it is a choice.
  - hash872 8y ago
    Manufacturing jobs were leaving the US in the millions pre-NAFTA and China joining the WTO. Even with high tariffs & restrictionist immigration policies, it can't change the fact that someone in a 3rd world country can do x semi-skilled labor for $2 an hour whereas a unionized American does it for $30+. You can't pass a law against cheaper. Even with the highest tariffs in the world, manufacturers would still have left for cheaper labor elsewhere in a globalized world. Economic reality is not a choice
    - pytester 8y ago
      >You can't pass a law against cheaper. Tariffs, especially combined with the usually underestimated coordination expense of managing supply chains across continents, can make cheaper not cheaper. >Economic reality is not a choice It is completely a choice. Unfettered trade, globalism and the Washington Consensus were all choices.
    - chiefalchemist 8y ago
      The cheap labor is part of the equation. Less environmental restrictions also contributed significantly to cheap goods. But the final blow is the low cost of shipping / transportation. There has always been differences in markets. It's the low cost (and ease) of shipping / transportation that changed everything.
- danharaj 8y ago
  > Much of Piketty's work has been widely debunked, especially r > g Big claim.
  - peterhadlaw 8y ago
    This book was a great read and I highly recommend it for anyone who wants a little more perspective on Piketty's work: https://campus.aynrand.org/works/2015/10/09/equal-is-unfair https://campus.aynrand.org/works/2015/10/09/equal-is-unfair
    - matthewowen 8y ago
      Published by the Ayn Rand institute.
      - peterhadlaw 8y ago
        Publisher: St. Martin's Press (March 29, 2016) ISBN-10: 125008444X ISBN-13: 978-1250084446 Actually, no, that's just an article diving into the contents of the book. I figured might be helpful in case people didn't want to read the full book.
  - barry-cotter 8y ago
    Challenging the Empirical Contribution of Thomas Piketty's Capital in the 21st Century Thomas Piketty's Capital in the 21st Century has been widely debated on theoretical grounds, yet continues to attract acclaim for its historically-infused data analysis. In this study we conduct a closer scrutiny of Piketty's empirics than has appeared thus far, focusing upon his treatment of the United States. We find evidence of pervasive errors of historical fact, opaque methodological choices, and the cherry-picking of sources to construct favorable patterns from ambiguous data. Additional evidence suggests that Piketty used a highly distortive data assumption from the Soviet Union to accentuate one of his main historical claims about global “capitalism” in the 20th century. Taken together, these problems suggest that Piketty’s highly praised and historically-driven empirical work may actually be one of the book’s greatest weaknesses. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012 How Different Studies Measure Income Inequality in the US Piketty and Company Are Not the Only Game in Town ... The results from at least four studies were compared for three measures of income change: change in median incomes, share of growth captured by the top 10 percent, and the changing income share of the top 1 percent. In all cases, Piketty and Saez (2003) were the outlier, showing the most increased inequality. And in all three measures of income change, Piketty, Saez, and Zucman (2018) found much less growth in income inequality than Piketty and Saez (2003). This brief does a meta-analysis of different findings to estimate a “consensus” level of change. Applying Canberra Group (2001, 2011) recommendations, I find that instead of stagnating, real median incomes grew by just over 40 percent (1 percent a year) from 1979 to 2014; the top 10 percent of the income ladder captured 45 percent of income growth from 1979 to 2014; and the share of the top 1 percent grew 3.5 percentage points. All studies find that income inequality rose after 1979, but common perceptions that all income gain went to the top 10 percent and middle class incomes stagnated (or even declined) are wrong. https://www.urban.org/sites/default/files/publication/99455/how_different_studies_measure_income_inequality.pdf https://www.urban.org/sites/default/files/publication/99455/...
- mdorazio 8y ago
  > Top 1% income earners are typically business founder-owners No, they're not. The top 1% are people who work "normal" high-paying jobs [1]. You're probably thinking a smaller slice like 0.1%. Also if you're going to claim that someone's work is debunked, at least point to some references to back that up. [1] https://archive.nytimes.com/www.nytimes.com/packages/html/newsgraphics/2012/0115-one-percent-occupations/index.html?hp https://archive.nytimes.com/www.nytimes.com/packages/html/ne...
  - hash872 8y ago
    https://www.nber.org/papers/w25442 https://www.nber.org/papers/w25442 'Have the idle rich replaced the working rich at the top of the U.S. income distribution? Using tax data linking 11 million firms to their owners, this paper finds that entrepreneurs who actively manage their firms are key for top income inequality. Most top income is non-wage income, a primary source of which is private business profit. These profits accrue to working-age owners of closely-held, mid-market firms in skill-intensive industries.' Without going into the extensive exaggerations, lies and data-fudging of Piketty- do you look at the Forbes 400 list of wealthiest Americans and see a lot of inherited wealth there? A lot of Rockefellers, Morgans, and Vanderbilts? It's a bit surprising, right, because if we accept r > g then Rockefellers/Morgans/Vanderbilts should own most of the US by compounding wealth starting over 100 years ago at this point.... And in fact we find the Forbes 400 is virtually all- self-made entrepreneurs who created their own wealth. If you find a Rockefeller there who's never worked a day in his life but is simply living on rentier income, please let me know. (As I mentioned in the original comment, one of the reasons Piketty's rentier fantasies don't work is that he doesn't gauge consumption- and I suspect idle wealthy inheritant-types who don't work burn cash at a greater rate than r)
    - RestlessMind 8y ago
      Forbes 400 for 2018: https://www.forbes.com/forbes-400/#715eb42a7e2f https://www.forbes.com/forbes-400/#715eb42a7e2f Looking at top 40 (because it gets boring to look up bios after a while), I see the following folks who inherited companies founded by their family members: Charles Koch, David Koch, Jim Walton, Alice Walton, Robson Walton, Jacqueline Mars, John Mars, Abigail Johnson, Donald Bren, Lukas Walton, Leonard Lauder. That is 11 out of top 40 (or 27.5%) have inherited their wealth. That is certainly a big fraction of billionaires who did nothing but win the birth lottery.
- lsc 8y ago
  >Top 1% income earners are typically business founder-owners, First, 1% in income puts you around $450K/yr... and that's usually household, so if two software engineers get married and move to the bay area, they have a reasonable shot of making that cut mid to late career. (from what I've seen, if they get a job at a big company and then talk that company into transferring them, they have a good shot at keeping that ridiculous income and living somewhere where it means something. They have less of a shot at getting the really sweet raises and bonuses at those other places, though.) I know a bunch of people in that box. For that matter, most of them would argue they aren't rich at all. I remember the other day, one of my co-workers, who I am fairly certain meets the above standard, was claiming that in the bay area, this salary is not rich, "just normal" - I explained to him that the median household income in santa clara county was like $70K/yr, and he was aghast. "How would you even live on that?" and he has a point... I mean, I lived on less than that when I was running a company and living here, but yeah, rent is nuts to the point where I know several people who would be 1%ers if they married someone of their own income who live with roommates. (I still have to laugh at people who are literal millionaires who claim they are "just normal." - but I kind of see their point; I don't make quite that much, but it's really pretty reasonable to think that if I worked a little harder that I could.) >wealthiest in US society are entrepreneurs who again created their own business- not rentiers living off of inherited wealth. See... it's very often not entirely one or the other. Would Bill Gates be super rich if his mom wasn't on the United Way board with the chairman of IBM? I mean, I'm not saying that Bill didn't do any of the work or that it was all inherited... I'm just saying that his parents handed him... certain advantages, and while I'm sure his intelligence and hard work would take him far no matter how poor he was born, if he started where most people start? while I'm sure he wouldn't stay poor, it's pretty unlikely that he would have gotten so rich that you or I would know his name today. Nearly all those 1%ers I work with? they came from families that were at least dentist rich, and were sent to really good schools. Nearly all the folks on H1B visas I know are really sharp, very educated and have parents who are very politically connected, and rich for their country of origin (even if not always rich by US standards) Hell, compared to most of my co-workers, I grew up poor, but even I had parents who worked in the computer industry. I got several jobs at critical points in my career through neighborhood and family connections. I know people who are just as good as me who didn't have those family connections early in their career, and several of them fell out of the industry entirely in 2001; me? I got a job a company started by someone who had interned for my father, many years ago, and I worked through the dot-com crash. I mean, clearly my connections were not good enough to get me a job I couldn't reasonably do, but it certainly got me the interview, at a time when such things were hard to come by, and probably gave me a leg up over the other applicants who could hurdle the minimum bar. (Incidentally, a few years later, I started my own company, and hired a few of those less connected but just as good as I am people... It didn't work out; Business is a lot harder than it looks, and I don't have those sorts of connections, but it was really interesting how I became technically bourgeois (and not in the poor taste in lawn furniture sense... I mean that I owned means of production and employed other people, combining my labor and capital to produce a product) but at the same time, my income dropped precipitously. Like i made rent, sure, but the total revenue was about a L6 bay area SWE total comp number, there were were other employees to pay, datacenter bills, and servers to buy. So when I sold out and got a regular job, it was like a 4x raise for me.)
- drb91 8y ago
  > entrepreneurs who again created their own business- not rentiers I sense you're implying a meaningful comparison there. Why is being an entrepreneur better (or indeed, distinct at all) from being a landlord?
- wolco 8y ago
  Yes we do it is called placing import duties to increase the price to match local prices.
skookumchuck 8y ago
> The days when being a US citizen gauranteed affluence are coming to a close. Those days never existed. The US offered opportunities, not guarantees.
gumby 8y ago
I don’t see how this conclusion is supported, much less cited, by the NYT article.

hash872 8y ago

Much of Piketty's work has been widely debunked, especially r > g, so I'm not sure why one would start with his thesis. Top 1% income earners are typically business founder-owners, and reams of evidence from the Forbes 400 to tax data show that the wealthiest in US society are entrepreneurs who again created their own business- not rentiers living off of inherited wealth. (Anecdotally, children of inherited wealth they didn't earn burn through cash so fast that r < g, not the other way around). I have no idea what 'globalism' means in this context, or what type of alternate reality could exist where foreigners would be polite enough to not, like, turn a wrench or run an assembly line for cheaper than Americans did in the 50s. We as a country don't have the option of 'choosing' an alternate economic reality where developing country wages aren't cheaper than ours

therealforsen 8y ago
i think by globalism he means that free trade brings with it the free movement of labor across countries >what type of alternate reality could exist where foreigners would be polite enough to not, like, turn a wrench or run an assembly line for cheaper than Americans did in the 50s. We as a country don't have the option of 'choosing' an alternate economic reality where developing country wages aren't cheaper than ours the illusion of non-choice on this issue began when bill buckley reformed the right wing into free-traders. we could vote to not let foreigners in to our country and to establish high tariffs on foreign goods. we choose not to. not saying whether that's right or wrong. just saying it is a choice.
- hash872 8y ago
  Manufacturing jobs were leaving the US in the millions pre-NAFTA and China joining the WTO. Even with high tariffs & restrictionist immigration policies, it can't change the fact that someone in a 3rd world country can do x semi-skilled labor for $2 an hour whereas a unionized American does it for $30+. You can't pass a law against cheaper. Even with the highest tariffs in the world, manufacturers would still have left for cheaper labor elsewhere in a globalized world. Economic reality is not a choice
  - pytester 8y ago
    >You can't pass a law against cheaper. Tariffs, especially combined with the usually underestimated coordination expense of managing supply chains across continents, can make cheaper not cheaper. >Economic reality is not a choice It is completely a choice. Unfettered trade, globalism and the Washington Consensus were all choices.
  - chiefalchemist 8y ago
    The cheap labor is part of the equation. Less environmental restrictions also contributed significantly to cheap goods. But the final blow is the low cost of shipping / transportation. There has always been differences in markets. It's the low cost (and ease) of shipping / transportation that changed everything.
danharaj 8y ago
> Much of Piketty's work has been widely debunked, especially r > g Big claim.
- peterhadlaw 8y ago
  This book was a great read and I highly recommend it for anyone who wants a little more perspective on Piketty's work: https://campus.aynrand.org/works/2015/10/09/equal-is-unfair https://campus.aynrand.org/works/2015/10/09/equal-is-unfair
  - matthewowen 8y ago
    Published by the Ayn Rand institute.
    - peterhadlaw 8y ago
      Publisher: St. Martin's Press (March 29, 2016) ISBN-10: 125008444X ISBN-13: 978-1250084446 Actually, no, that's just an article diving into the contents of the book. I figured might be helpful in case people didn't want to read the full book.
- barry-cotter 8y ago
  Challenging the Empirical Contribution of Thomas Piketty's Capital in the 21st Century Thomas Piketty's Capital in the 21st Century has been widely debated on theoretical grounds, yet continues to attract acclaim for its historically-infused data analysis. In this study we conduct a closer scrutiny of Piketty's empirics than has appeared thus far, focusing upon his treatment of the United States. We find evidence of pervasive errors of historical fact, opaque methodological choices, and the cherry-picking of sources to construct favorable patterns from ambiguous data. Additional evidence suggests that Piketty used a highly distortive data assumption from the Soviet Union to accentuate one of his main historical claims about global “capitalism” in the 20th century. Taken together, these problems suggest that Piketty’s highly praised and historically-driven empirical work may actually be one of the book’s greatest weaknesses. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012 How Different Studies Measure Income Inequality in the US Piketty and Company Are Not the Only Game in Town ... The results from at least four studies were compared for three measures of income change: change in median incomes, share of growth captured by the top 10 percent, and the changing income share of the top 1 percent. In all cases, Piketty and Saez (2003) were the outlier, showing the most increased inequality. And in all three measures of income change, Piketty, Saez, and Zucman (2018) found much less growth in income inequality than Piketty and Saez (2003). This brief does a meta-analysis of different findings to estimate a “consensus” level of change. Applying Canberra Group (2001, 2011) recommendations, I find that instead of stagnating, real median incomes grew by just over 40 percent (1 percent a year) from 1979 to 2014; the top 10 percent of the income ladder captured 45 percent of income growth from 1979 to 2014; and the share of the top 1 percent grew 3.5 percentage points. All studies find that income inequality rose after 1979, but common perceptions that all income gain went to the top 10 percent and middle class incomes stagnated (or even declined) are wrong. https://www.urban.org/sites/default/files/publication/99455/how_different_studies_measure_income_inequality.pdf https://www.urban.org/sites/default/files/publication/99455/...
mdorazio 8y ago
> Top 1% income earners are typically business founder-owners No, they're not. The top 1% are people who work "normal" high-paying jobs [1]. You're probably thinking a smaller slice like 0.1%. Also if you're going to claim that someone's work is debunked, at least point to some references to back that up. [1] https://archive.nytimes.com/www.nytimes.com/packages/html/newsgraphics/2012/0115-one-percent-occupations/index.html?hp https://archive.nytimes.com/www.nytimes.com/packages/html/ne...
- hash872 8y ago
  https://www.nber.org/papers/w25442 https://www.nber.org/papers/w25442 'Have the idle rich replaced the working rich at the top of the U.S. income distribution? Using tax data linking 11 million firms to their owners, this paper finds that entrepreneurs who actively manage their firms are key for top income inequality. Most top income is non-wage income, a primary source of which is private business profit. These profits accrue to working-age owners of closely-held, mid-market firms in skill-intensive industries.' Without going into the extensive exaggerations, lies and data-fudging of Piketty- do you look at the Forbes 400 list of wealthiest Americans and see a lot of inherited wealth there? A lot of Rockefellers, Morgans, and Vanderbilts? It's a bit surprising, right, because if we accept r > g then Rockefellers/Morgans/Vanderbilts should own most of the US by compounding wealth starting over 100 years ago at this point.... And in fact we find the Forbes 400 is virtually all- self-made entrepreneurs who created their own wealth. If you find a Rockefeller there who's never worked a day in his life but is simply living on rentier income, please let me know. (As I mentioned in the original comment, one of the reasons Piketty's rentier fantasies don't work is that he doesn't gauge consumption- and I suspect idle wealthy inheritant-types who don't work burn cash at a greater rate than r)
  - RestlessMind 8y ago
    Forbes 400 for 2018: https://www.forbes.com/forbes-400/#715eb42a7e2f https://www.forbes.com/forbes-400/#715eb42a7e2f Looking at top 40 (because it gets boring to look up bios after a while), I see the following folks who inherited companies founded by their family members: Charles Koch, David Koch, Jim Walton, Alice Walton, Robson Walton, Jacqueline Mars, John Mars, Abigail Johnson, Donald Bren, Lukas Walton, Leonard Lauder. That is 11 out of top 40 (or 27.5%) have inherited their wealth. That is certainly a big fraction of billionaires who did nothing but win the birth lottery.
lsc 8y ago
>Top 1% income earners are typically business founder-owners, First, 1% in income puts you around $450K/yr... and that's usually household, so if two software engineers get married and move to the bay area, they have a reasonable shot of making that cut mid to late career. (from what I've seen, if they get a job at a big company and then talk that company into transferring them, they have a good shot at keeping that ridiculous income and living somewhere where it means something. They have less of a shot at getting the really sweet raises and bonuses at those other places, though.) I know a bunch of people in that box. For that matter, most of them would argue they aren't rich at all. I remember the other day, one of my co-workers, who I am fairly certain meets the above standard, was claiming that in the bay area, this salary is not rich, "just normal" - I explained to him that the median household income in santa clara county was like $70K/yr, and he was aghast. "How would you even live on that?" and he has a point... I mean, I lived on less than that when I was running a company and living here, but yeah, rent is nuts to the point where I know several people who would be 1%ers if they married someone of their own income who live with roommates. (I still have to laugh at people who are literal millionaires who claim they are "just normal." - but I kind of see their point; I don't make quite that much, but it's really pretty reasonable to think that if I worked a little harder that I could.) >wealthiest in US society are entrepreneurs who again created their own business- not rentiers living off of inherited wealth. See... it's very often not entirely one or the other. Would Bill Gates be super rich if his mom wasn't on the United Way board with the chairman of IBM? I mean, I'm not saying that Bill didn't do any of the work or that it was all inherited... I'm just saying that his parents handed him... certain advantages, and while I'm sure his intelligence and hard work would take him far no matter how poor he was born, if he started where most people start? while I'm sure he wouldn't stay poor, it's pretty unlikely that he would have gotten so rich that you or I would know his name today. Nearly all those 1%ers I work with? they came from families that were at least dentist rich, and were sent to really good schools. Nearly all the folks on H1B visas I know are really sharp, very educated and have parents who are very politically connected, and rich for their country of origin (even if not always rich by US standards) Hell, compared to most of my co-workers, I grew up poor, but even I had parents who worked in the computer industry. I got several jobs at critical points in my career through neighborhood and family connections. I know people who are just as good as me who didn't have those family connections early in their career, and several of them fell out of the industry entirely in 2001; me? I got a job a company started by someone who had interned for my father, many years ago, and I worked through the dot-com crash. I mean, clearly my connections were not good enough to get me a job I couldn't reasonably do, but it certainly got me the interview, at a time when such things were hard to come by, and probably gave me a leg up over the other applicants who could hurdle the minimum bar. (Incidentally, a few years later, I started my own company, and hired a few of those less connected but just as good as I am people... It didn't work out; Business is a lot harder than it looks, and I don't have those sorts of connections, but it was really interesting how I became technically bourgeois (and not in the poor taste in lawn furniture sense... I mean that I owned means of production and employed other people, combining my labor and capital to produce a product) but at the same time, my income dropped precipitously. Like i made rent, sure, but the total revenue was about a L6 bay area SWE total comp number, there were were other employees to pay, datacenter bills, and servers to buy. So when I sold out and got a regular job, it was like a 4x raise for me.)
drb91 8y ago
> entrepreneurs who again created their own business- not rentiers I sense you're implying a meaningful comparison there. Why is being an entrepreneur better (or indeed, distinct at all) from being a landlord?
wolco 8y ago
Yes we do it is called placing import duties to increase the price to match local prices.

skookumchuck 8y ago

> The days when being a US citizen gauranteed affluence are coming to a close. Those days never existed. The US offered opportunities, not guarantees.

gumby 8y ago

I don’t see how this conclusion is supported, much less cited, by the NYT article.