5 ms·

This will be controversial, but this is true everytime there is a pitchfork-inducing "the rich got richer in 20XX" thread. But it's not that the rich stole from

by umvi 7y ago

This will be controversial, but this is true everytime there is a pitchfork-inducing "the rich got richer in 20XX" thread. But it's not that the rich stole from the poor in order to become richer (though undoubtedly people will argue this). If I stick a million dollars in an index fund and passively get richer, am I stealing from the poor? Wealth is not zero sum, yet we seem to treat it like it is (in order for poor people to become wealthy we need to take from the wealthy)

13415 7y ago
The question is not whether someone steals or doesn't steal from the poor. The crucial questions are whether the divide between rich and poor increases or not and whether the actual buying power of the poor decreases or not. If the lower income classes have less and less, then something has gone wrong and needs to be fixed. That's currently the case in most Western industrialized nations. One way to fix the problem, in one way or another, is by some form of resource distribution. If someone has got other recipes that could reasonably be expected to work, then they should put them on the table. So far, the "trickle down to the masses" methods favored by the ultra rich have not proven to be very successful and people cannot be bullshitted forever (or who knows, maybe they can, we'll see in the future).
gamegoblin 7y ago
Not that I necessarily agree with them, but some people would say that your index fund is stealing from the poor in a sense, because corporate profits (distributed to you, the shareholder, as dividends) are derived from exploiting the working class, when they could be raising wages instead. This is obviously not the entire story, because the economy certainly has grown historically and continues to grow, and that growth comes from somewhere. But it is plausible that some amount of wealth accumulation does come at the detriment of the poor.
- davesmith1983 7y ago
  Well labour prices (for whatever the industry is) is driven by market forces. The Salary / Rate has to match the market expectations. If the market rate is artificially inflated (minimum hourly wage) then companies will find a way to automate those jobs away. I am sure people will say that this would have happened anyway with certain unskilled labour jobs but you could argue that this only further incentivises them. I would argue that the UK fast food chains and supermarkets are a good case study to illustrate this. In the UK most of the cashier staff are slowly being removed. Now they normally have 6 - 10 checkouts that are automated and have the customer scan their own items. Tesco (that where I normally go) instead of having 10 checkout staff you can buy 10 machines that are managed by one or two people at most. All the machines in the major supermarkets are using the same vendor for their machines and the software appears to the same for each supermarket but skinned, with the only exception being the german supermarkets. Similarly at the other end of the scale in the UK. A C# .NET + MVC + JS with some SQL Server experience contract rate is about £350-400 a day. In London because developers expect higher rates (and the higher cost of living pushed the rate up by about £100-200 a day.
  - twanvl 7y ago
    Raising wages are not the only way to make the poor relatively richer. There is also all kinds of taxation and welfare programs.
  - ABCLAW 7y ago
    >Well labour prices (for whatever the industry is) is driven by market forces. [...] If the market rate is artificially inflated [...] First, are all markets just markets? Second, what if the market rate is artificially depressed - what if it is systemically artificially depressed? Do market expectations align with an appropriate distribution of wealth to labour under conditions where the first is false or the second is true?
    - davesmith1983 7y ago
      > First, are all markets just markets? I am not sure what you mean by this. > Second, what if the market rate is artificially depressed - what if it is systemically artificially depressed? Regarding artificial depression. Well this is where we get into some somewhat controversial territory. Some will argue that immigration artificially depresses wages as you can artificially increase the supply of labour and thus drive down the prices. Those that are conspiratorially minded would claim that large companies would make efforts to lobby Political parties to have a more open doors policy on immigration. Now there is some evidence of the market rate being depressed due to immigration e.g. construction wages have increased in the UK after the "Leave Vote". https://www.theguardian.com/business/2019/jun/24/construction-pay-rises-as-eu-workers-weigh-up-leaving-uk-survey-brexit https://www.theguardian.com/business/2019/jun/24/constructio... But I remember reading about a Bank of England report which is somewhat recent and this is the published paper: https://www.bankofengland.co.uk/working-paper/2015/the-impact-of-immigration-on-occupational-wages-evidence-from-britain https://www.bankofengland.co.uk/working-paper/2015/the-impac... However the stats themselves go over my head. I have google'd around for a simplified explanation (because I don't trust any of the newspapers to be honest as they will each push their own agenda). It appears that the effect on a native workers on minimum wage would have only lost less than a penny per hour due to immigration. A penny per hour is a rounding error for most people. However that seems to be at Odds at what we have seen recently with construction. So I don't know what to think tbh and I won't claim to be any definitive authority on the matter. > Do market expectations align with an appropriate distribution of wealth to labour under conditions where the first is false or the second is true? Sorry it isn't clear what you are asking me to compare.
- mLuby 7y ago
  Technically yes, but the key difference is that those index funds are equally available to rich and poor, and the returns are the same for everyone (mostly). Contrast that with the plethora of wealth-increasing opportunities that are not available without a large initial investment or the connections or power that comes with existing wealth.
  - tasty_freeze 7y ago
    Your claim is the flip side to the joke that goes something like, "The law is blind to class: it is equally illegal for a rich man to sleep under a bridge as it is for the poor man." The point being: a large fraction of the population in the US is living paycheck to paycheck and has no money to spare for investing in an index fund.
    - umvi 7y ago
      And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto (at least my pack-a-day neighbors do). $3k per year in an index fund is certainly not insignificant.
      - gruez 7y ago
        >And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto being poor impairs your cognition[1], so it's not surprising that they are wasting money on stuff like that. [1] random google result: https://www.scientificamerican.com/article/how-poverty-affects-the-brain/ https://www.scientificamerican.com/article/how-poverty-affec...
        logicprog 7y ago
        I'd imagine that the people they studied in Bangladesh in that article are a lot more poor than basically anyone in the US, especially people with $3k to spare on anything. And if you were to find evidence of poorer people having impaired decision-making skills in the US (and there might be evidence of that), the question becomes, are they as poor as they are because of that poor decision making?
XaoDaoCaoCao 7y ago
It's more that people are starting to recognize that we're more poor than a decade ago in terms of buying power AND unemployment is closer to 25% than some ludicrous politicized value. When you shove apes deeper into the pits of the dominance hierarchies and feed them garbage, you're going to have resentment. Along those lines, capital has been concentrating ever more into a smaller slice of the population while cutting the value of the humble pile of capital the average US citizen has. I don't believe in wealth as a zero sum game but I do believe in hyper-predator agents steering the system for more ill-begotten gains. Which becomes a zero sum game...
andrewtbham 7y ago
PG often tries to make this point.
- andrewtbham 7y ago
  The Pie Fallacy A surprising number of people retain from childhood the idea that there is a fixed amount of wealth in the world. http://paulgraham.com/wealth.html http://paulgraham.com/wealth.html
manifestsilence 7y ago
I think money is one of the few things that really does approach a zero sum game. If you have more money, even if you printed it yourself, it deflates the value of everyone else's money when you spend it. What is not zero sum are the actual goods bought with the money, in cases where cooperation could result in better productivity and more actual goods produced.
badrabbit 7y ago
I don't that is neccesarily a zero-sum mentality. It's an observation on how policy and the economy as a whole did NOT benefit the poorer class as much as it did the rich class. The rich making more money should not translate to the poor making less money but increase in economic quality of life should more proportional between rich and poor. The rich making a trillion dollars does not translate into the poor losing a trillion dollars (zero sum). But the wealth of the rich increasing by 300% and the wealth of the poor remaining the same indicates the economic policies and conditions are not benefiting the poor as much as they benefit the rich. Often,the argument is that policies are not fairly applied to allow the poor to maintain an increasingly better economic living conditions.
mikeash 7y ago
It’s a common fallacy to believe that wealth is zero sum. It’s also a common fallacy to believe that, since it’s not zero sum, gains by one group are uncorrelated to losses by another. If the rich got richer, does that mean they took from the poor? No. But it also doesn’t mean they didn’t. As usual, you have to look at the specifics. The world does have limited resources and capacity for economic growth. In your index fund example, a substantial chunk of those are being allocated to someone who already has plenty, and it would be a lot more useful if it went to someone who had less. That’s not exactly taking from the poor, but it’s not exactly not.
- mikeash 7y ago
  It occurs to me that there’s a simpler way to put it: wealth creation is not a zero sum game, but wealth allocation is.
  - leetcrew 7y ago
    I don't think this is a very good way of putting it. if wealth creation is disconnected from allocation, the creation part isn't really a "game" at all; there's no reward function. the second part, that wealth allocation is zero sum is literally true, but only in the tautological sense that there's no way to divide a pie such that the pieces add up to more than one pie. it's not very useful to assume you already have a pie and then decide how to divide it up when the way you divide it affects the size and kind of pie you have to begin with.
    - mikeash 7y ago
      I think it's useful because it gets you thinking about which category various things fall into, and how they're connected. For example, business growth is usually wealth creation. We shouldn't think badly of successful businesses (unless they're taking advantage of externalities or similar). However, pay is wealth allocation. Pay going to executives versus workers versus charity versus taxes is a zero-sum game, but we're OK (for certain values of "we") with executives getting a huge slice of that pie because we're pretty sure it helps drive the wealth creation side of things by providing incentives. It gets you thinking about what incentives you need, what sort of behavior they drive, what sort of behavior we want to drive, etc. Far more useful and interesting than the typical story of "wealth is not a zero-sum game, rich people don't take anything away from poor people, The End."
smallnamespace 7y ago
> Wealth is not zero sum But what relative wealth buys - a safer, more comfortable position in society - definitely is.
- ska 7y ago
  I don't think that is quite right. Consider the difference between a society with extremely uneven wealth distribution, such that only a tiny percentage felt safe an comfortable. It's easy to imagine a more even wealth distribution changing that for a large percentage of people. There is a tautological zero-sum ordering in relative wealth, but it's not clear that correlates to anything meaningful to vast majority of people.
  - temp-dude-87844 7y ago
    A higher level of relative wealth unlocks an advantage in the allocation of scarce resources like land and housing within a particular locale, which is meaningful to lots of people.
    - ska 7y ago
      The point is it doesn’t for many people at all if the distribution is uneven enough, I.e. distribution matters. I’m not saying it’s not important, I’m saying it’s not obviously zero sum. If it was, any marginal change for one person would have impact for another. With an uneven enough distribution I could lose relative in an amount that actually has no impact for me, but could have utility going to you, say. Bear in mind the criteria was “safe and comfortable”, not “able to outbid you on a property”
- bittercynic 7y ago
  I don't think it's so clear cut. Maybe relative poverty can only be shifted around, but if you reduce absolute poverty that seems pretty clearly positive-sum.
galaxyLogic 7y ago
Think about Trump tax-cuts, who benefited most, the big corporations. That meant they made more profit which meant their stock price went up. Which meant people who owned stock got richer, and if you owned a lot of stock much richer. Whereas poor people who can't afford to put money aside for stock-investing did not get any less poor and they did not get tax-breaks or government support-programs either. They didn't get better infra-structure so travel for them would be cheaper and food fresher etc. Point is it does not matter if rich got richer. What matters is the tax-system that (at least under Trump) favors the rich and produces growing inequality.
ma2rten 7y ago
What people take issue with is not necessarily one individual's action, but the system which allows rich people to get richer without benefiting the middle/working class. Cost of education, housing and health care keeps rising in America but wages didn't. I would say it's a combination of zero sum and non-zero sum. If we can allocate resources better, both the poor and the rich can get richer by producing more. But at the same time how profits are distributed is a zero sum game.
petra 7y ago
It's not that clear that the rich in general don't play a zero sum game. But anyways, that's not how people build their model of fairness. They look at their boss, making much money,often of their good work, while giving them the bare minimum he could get away with. They look at bezos treating employees like cattle, and not paying taxes. They look at their landlord, "killing them" with rent. And let's not talk about buying a house. They look at rich guys, getting many women easily. While they struggle. Should they really feel the rich don't play a zero sum game?
Droobfest 7y ago
Say the top 1% increase their proportion of wealth from 20% to 40% of the money supply. Since there's only a finite amount of stuff to buy (productivity), this means the rich can also buy a proportionally bigger amount of stuff. Now, yes, this money gets in the hands of whoever is selling but in our current world this is increasingly also the rich. They're slowly buying up all real estate, companies, securities etc. capturing an ever increasing slice of economic surplus. This capture is exactly how the proportion of their wealth gets bigger and bigger, while wages are under pressure and haven't increased at all. It's not entirely zero sum, some investments increase productivity and thus create actual wealth. Unfortunately investment in stocks and real estate don't increase productivity at all while rent-seeking only directs an ever increasing proportion of available wealth towards rich people.
- leetcrew 7y ago
  > Say the top 1% increase their proportion of wealth from 20% to 40% of the money supply. Since there's only a finite amount of stuff to buy (productivity), this means the rich can also buy a proportionally bigger amount of stuff. yes, the money supply and real productivity are disconnected from each other, but it's hard to imagine such a huge change in control of the money supply over a period where real productivity is held constant. > It's not entirely zero sum, some investments increase productivity and thus create actual wealth. Unfortunately investment in stocks and real estate don't increase productivity at all while rent-seeking only directs an ever increasing proportion of available wealth towards rich people. if there are some investments that increase productivity, but they aren't stocks or real estate, what investments do increase productivity?
  - Droobfest 7y ago
    I just meant the 20% and 40% as an illustration how increased wealth can make others lose out if productivity doesn't increase proportionally, I wouldn't read too much into it. Starting/growing a company is the obvious investment that increases productivity (pg isn't wrong). But selling your labor also increases it on a smaller scale, as long as you don't replace someone else. Actually literally anything that creates anything increases productivity. Even creating bitcoins in a sense does (but trading them doesn't)... until they crash. But real estate and stocks only move ownership from one person to another. They don't create anything. Even issuing new stock only moves ownership.
noego 7y ago
The subtext of most "rich got richer" articles, is that there's a missed opportunity to make everyone richer by raising taxes on the wealthy, and lowering taxes on everyone else. The rich would still get richer, but at least everyone else will get to share in the spoils as well.

by umvi 7y ago

13415 7y ago

The question is not whether someone steals or doesn't steal from the poor. The crucial questions are whether the divide between rich and poor increases or not and whether the actual buying power of the poor decreases or not. If the lower income classes have less and less, then something has gone wrong and needs to be fixed. That's currently the case in most Western industrialized nations. One way to fix the problem, in one way or another, is by some form of resource distribution. If someone has got other recipes that could reasonably be expected to work, then they should put them on the table. So far, the "trickle down to the masses" methods favored by the ultra rich have not proven to be very successful and people cannot be bullshitted forever (or who knows, maybe they can, we'll see in the future).

gamegoblin 7y ago

Not that I necessarily agree with them, but some people would say that your index fund is stealing from the poor in a sense, because corporate profits (distributed to you, the shareholder, as dividends) are derived from exploiting the working class, when they could be raising wages instead. This is obviously not the entire story, because the economy certainly has grown historically and continues to grow, and that growth comes from somewhere. But it is plausible that some amount of wealth accumulation does come at the detriment of the poor.

davesmith1983 7y ago
Well labour prices (for whatever the industry is) is driven by market forces. The Salary / Rate has to match the market expectations. If the market rate is artificially inflated (minimum hourly wage) then companies will find a way to automate those jobs away. I am sure people will say that this would have happened anyway with certain unskilled labour jobs but you could argue that this only further incentivises them. I would argue that the UK fast food chains and supermarkets are a good case study to illustrate this. In the UK most of the cashier staff are slowly being removed. Now they normally have 6 - 10 checkouts that are automated and have the customer scan their own items. Tesco (that where I normally go) instead of having 10 checkout staff you can buy 10 machines that are managed by one or two people at most. All the machines in the major supermarkets are using the same vendor for their machines and the software appears to the same for each supermarket but skinned, with the only exception being the german supermarkets. Similarly at the other end of the scale in the UK. A C# .NET + MVC + JS with some SQL Server experience contract rate is about £350-400 a day. In London because developers expect higher rates (and the higher cost of living pushed the rate up by about £100-200 a day.
- twanvl 7y ago
  Raising wages are not the only way to make the poor relatively richer. There is also all kinds of taxation and welfare programs.
- ABCLAW 7y ago
  >Well labour prices (for whatever the industry is) is driven by market forces. [...] If the market rate is artificially inflated [...] First, are all markets just markets? Second, what if the market rate is artificially depressed - what if it is systemically artificially depressed? Do market expectations align with an appropriate distribution of wealth to labour under conditions where the first is false or the second is true?
  - davesmith1983 7y ago
    > First, are all markets just markets? I am not sure what you mean by this. > Second, what if the market rate is artificially depressed - what if it is systemically artificially depressed? Regarding artificial depression. Well this is where we get into some somewhat controversial territory. Some will argue that immigration artificially depresses wages as you can artificially increase the supply of labour and thus drive down the prices. Those that are conspiratorially minded would claim that large companies would make efforts to lobby Political parties to have a more open doors policy on immigration. Now there is some evidence of the market rate being depressed due to immigration e.g. construction wages have increased in the UK after the "Leave Vote". https://www.theguardian.com/business/2019/jun/24/construction-pay-rises-as-eu-workers-weigh-up-leaving-uk-survey-brexit https://www.theguardian.com/business/2019/jun/24/constructio... But I remember reading about a Bank of England report which is somewhat recent and this is the published paper: https://www.bankofengland.co.uk/working-paper/2015/the-impact-of-immigration-on-occupational-wages-evidence-from-britain https://www.bankofengland.co.uk/working-paper/2015/the-impac... However the stats themselves go over my head. I have google'd around for a simplified explanation (because I don't trust any of the newspapers to be honest as they will each push their own agenda). It appears that the effect on a native workers on minimum wage would have only lost less than a penny per hour due to immigration. A penny per hour is a rounding error for most people. However that seems to be at Odds at what we have seen recently with construction. So I don't know what to think tbh and I won't claim to be any definitive authority on the matter. > Do market expectations align with an appropriate distribution of wealth to labour under conditions where the first is false or the second is true? Sorry it isn't clear what you are asking me to compare.
mLuby 7y ago
Technically yes, but the key difference is that those index funds are equally available to rich and poor, and the returns are the same for everyone (mostly). Contrast that with the plethora of wealth-increasing opportunities that are not available without a large initial investment or the connections or power that comes with existing wealth.
- tasty_freeze 7y ago
  Your claim is the flip side to the joke that goes something like, "The law is blind to class: it is equally illegal for a rich man to sleep under a bridge as it is for the poor man." The point being: a large fraction of the population in the US is living paycheck to paycheck and has no money to spare for investing in an index fund.
  - umvi 7y ago
    And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto (at least my pack-a-day neighbors do). $3k per year in an index fund is certainly not insignificant.
    - gruez 7y ago
      >And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto being poor impairs your cognition[1], so it's not surprising that they are wasting money on stuff like that. [1] random google result: https://www.scientificamerican.com/article/how-poverty-affects-the-brain/ https://www.scientificamerican.com/article/how-poverty-affec...
      - logicprog 7y ago
        I'd imagine that the people they studied in Bangladesh in that article are a lot more poor than basically anyone in the US, especially people with $3k to spare on anything. And if you were to find evidence of poorer people having impaired decision-making skills in the US (and there might be evidence of that), the question becomes, are they as poor as they are because of that poor decision making?

XaoDaoCaoCao 7y ago

It's more that people are starting to recognize that we're more poor than a decade ago in terms of buying power AND unemployment is closer to 25% than some ludicrous politicized value. When you shove apes deeper into the pits of the dominance hierarchies and feed them garbage, you're going to have resentment. Along those lines, capital has been concentrating ever more into a smaller slice of the population while cutting the value of the humble pile of capital the average US citizen has. I don't believe in wealth as a zero sum game but I do believe in hyper-predator agents steering the system for more ill-begotten gains. Which becomes a zero sum game...

andrewtbham 7y ago

PG often tries to make this point.

andrewtbham 7y ago
The Pie Fallacy A surprising number of people retain from childhood the idea that there is a fixed amount of wealth in the world. http://paulgraham.com/wealth.html http://paulgraham.com/wealth.html

manifestsilence 7y ago

I think money is one of the few things that really does approach a zero sum game. If you have more money, even if you printed it yourself, it deflates the value of everyone else's money when you spend it. What is not zero sum are the actual goods bought with the money, in cases where cooperation could result in better productivity and more actual goods produced.

badrabbit 7y ago

I don't that is neccesarily a zero-sum mentality. It's an observation on how policy and the economy as a whole did NOT benefit the poorer class as much as it did the rich class. The rich making more money should not translate to the poor making less money but increase in economic quality of life should more proportional between rich and poor. The rich making a trillion dollars does not translate into the poor losing a trillion dollars (zero sum). But the wealth of the rich increasing by 300% and the wealth of the poor remaining the same indicates the economic policies and conditions are not benefiting the poor as much as they benefit the rich. Often,the argument is that policies are not fairly applied to allow the poor to maintain an increasingly better economic living conditions.

mikeash 7y ago

It’s a common fallacy to believe that wealth is zero sum. It’s also a common fallacy to believe that, since it’s not zero sum, gains by one group are uncorrelated to losses by another. If the rich got richer, does that mean they took from the poor? No. But it also doesn’t mean they didn’t. As usual, you have to look at the specifics. The world does have limited resources and capacity for economic growth. In your index fund example, a substantial chunk of those are being allocated to someone who already has plenty, and it would be a lot more useful if it went to someone who had less. That’s not exactly taking from the poor, but it’s not exactly not.

mikeash 7y ago
It occurs to me that there’s a simpler way to put it: wealth creation is not a zero sum game, but wealth allocation is.
- leetcrew 7y ago
  I don't think this is a very good way of putting it. if wealth creation is disconnected from allocation, the creation part isn't really a "game" at all; there's no reward function. the second part, that wealth allocation is zero sum is literally true, but only in the tautological sense that there's no way to divide a pie such that the pieces add up to more than one pie. it's not very useful to assume you already have a pie and then decide how to divide it up when the way you divide it affects the size and kind of pie you have to begin with.
  - mikeash 7y ago
    I think it's useful because it gets you thinking about which category various things fall into, and how they're connected. For example, business growth is usually wealth creation. We shouldn't think badly of successful businesses (unless they're taking advantage of externalities or similar). However, pay is wealth allocation. Pay going to executives versus workers versus charity versus taxes is a zero-sum game, but we're OK (for certain values of "we") with executives getting a huge slice of that pie because we're pretty sure it helps drive the wealth creation side of things by providing incentives. It gets you thinking about what incentives you need, what sort of behavior they drive, what sort of behavior we want to drive, etc. Far more useful and interesting than the typical story of "wealth is not a zero-sum game, rich people don't take anything away from poor people, The End."

smallnamespace 7y ago

> Wealth is not zero sum But what relative wealth buys - a safer, more comfortable position in society - definitely is.

ska 7y ago
I don't think that is quite right. Consider the difference between a society with extremely uneven wealth distribution, such that only a tiny percentage felt safe an comfortable. It's easy to imagine a more even wealth distribution changing that for a large percentage of people. There is a tautological zero-sum ordering in relative wealth, but it's not clear that correlates to anything meaningful to vast majority of people.
- temp-dude-87844 7y ago
  A higher level of relative wealth unlocks an advantage in the allocation of scarce resources like land and housing within a particular locale, which is meaningful to lots of people.
  - ska 7y ago
    The point is it doesn’t for many people at all if the distribution is uneven enough, I.e. distribution matters. I’m not saying it’s not important, I’m saying it’s not obviously zero sum. If it was, any marginal change for one person would have impact for another. With an uneven enough distribution I could lose relative in an amount that actually has no impact for me, but could have utility going to you, say. Bear in mind the criteria was “safe and comfortable”, not “able to outbid you on a property”
bittercynic 7y ago
I don't think it's so clear cut. Maybe relative poverty can only be shifted around, but if you reduce absolute poverty that seems pretty clearly positive-sum.

galaxyLogic 7y ago

Think about Trump tax-cuts, who benefited most, the big corporations. That meant they made more profit which meant their stock price went up. Which meant people who owned stock got richer, and if you owned a lot of stock much richer. Whereas poor people who can't afford to put money aside for stock-investing did not get any less poor and they did not get tax-breaks or government support-programs either. They didn't get better infra-structure so travel for them would be cheaper and food fresher etc. Point is it does not matter if rich got richer. What matters is the tax-system that (at least under Trump) favors the rich and produces growing inequality.

ma2rten 7y ago

What people take issue with is not necessarily one individual's action, but the system which allows rich people to get richer without benefiting the middle/working class. Cost of education, housing and health care keeps rising in America but wages didn't. I would say it's a combination of zero sum and non-zero sum. If we can allocate resources better, both the poor and the rich can get richer by producing more. But at the same time how profits are distributed is a zero sum game.

petra 7y ago

It's not that clear that the rich in general don't play a zero sum game. But anyways, that's not how people build their model of fairness. They look at their boss, making much money,often of their good work, while giving them the bare minimum he could get away with. They look at bezos treating employees like cattle, and not paying taxes. They look at their landlord, "killing them" with rent. And let's not talk about buying a house. They look at rich guys, getting many women easily. While they struggle. Should they really feel the rich don't play a zero sum game?

Droobfest 7y ago

Say the top 1% increase their proportion of wealth from 20% to 40% of the money supply. Since there's only a finite amount of stuff to buy (productivity), this means the rich can also buy a proportionally bigger amount of stuff. Now, yes, this money gets in the hands of whoever is selling but in our current world this is increasingly also the rich. They're slowly buying up all real estate, companies, securities etc. capturing an ever increasing slice of economic surplus. This capture is exactly how the proportion of their wealth gets bigger and bigger, while wages are under pressure and haven't increased at all. It's not entirely zero sum, some investments increase productivity and thus create actual wealth. Unfortunately investment in stocks and real estate don't increase productivity at all while rent-seeking only directs an ever increasing proportion of available wealth towards rich people.

leetcrew 7y ago
> Say the top 1% increase their proportion of wealth from 20% to 40% of the money supply. Since there's only a finite amount of stuff to buy (productivity), this means the rich can also buy a proportionally bigger amount of stuff. yes, the money supply and real productivity are disconnected from each other, but it's hard to imagine such a huge change in control of the money supply over a period where real productivity is held constant. > It's not entirely zero sum, some investments increase productivity and thus create actual wealth. Unfortunately investment in stocks and real estate don't increase productivity at all while rent-seeking only directs an ever increasing proportion of available wealth towards rich people. if there are some investments that increase productivity, but they aren't stocks or real estate, what investments do increase productivity?
- Droobfest 7y ago
  I just meant the 20% and 40% as an illustration how increased wealth can make others lose out if productivity doesn't increase proportionally, I wouldn't read too much into it. Starting/growing a company is the obvious investment that increases productivity (pg isn't wrong). But selling your labor also increases it on a smaller scale, as long as you don't replace someone else. Actually literally anything that creates anything increases productivity. Even creating bitcoins in a sense does (but trading them doesn't)... until they crash. But real estate and stocks only move ownership from one person to another. They don't create anything. Even issuing new stock only moves ownership.

noego 7y ago

The subtext of most "rich got richer" articles, is that there's a missed opportunity to make everyone richer by raising taxes on the wealthy, and lowering taxes on everyone else. The rich would still get richer, but at least everyone else will get to share in the spoils as well.