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Why? Why is that disturbing? This is a genuine question. It doesn't disturb me one bit. As long as each generation is relatively wealthier than the prior on

by brc 16y ago

Why? Why is that disturbing? This is a genuine question. It doesn't disturb me one bit. As long as each generation is relatively wealthier than the prior one, I don't care about the spread within that generation. My grandfather died of pneumonia at age 56 due to a lack of oxygen and antibiotics at the hospital. They didn't have enough money to paint their house and instead used old tractor sump oil. My parents, when married, didn't have hot water or a toilet inside the house. They had never travelled more than 200 miles from their place of birth. My kids have access to better health, leisure, education, food and housing than even I did, which is not that long ago. This continual improvement in wealth amongst my own family is proof enough that the very rich aren't impinging on what really matters, which is improving living standards for the majority of people. Paraphrasin PG in one of his essays - it doesn't disturb me that Mozart was 1 million times more musically talented than I am, or that Tiger Woods is 10 million times better at golf. Their ability and success doesn't impede on my life at all - if anything - it improves it. It's not unfair (in any real sense) that Federer can play tennis very well and I can't hit the ball to save myself. So why is it unfair that someone has talent at making money and can make a million times more money than I can? In a free society, (apart from a very tiny minority who steal or lie their way to it) the only way they can get (and stay) rich is by providing excess value to everyone else. That's true whether you are kicking a ball, trading stocks or building software. Nobody has ever successfully convinced me why wealth disparity in a free society is a problem. If anything, I see it as a sign of a healthy society.

giardini 16y ago
"...apart from a very tiny minority who steal or lie their way to it..." Do you mean they are a "tiny minority" because - they are already members of a tiny minority (those who are extremely rich), or - those "who steal or lie their way" are a small part of those who are extremely rich? If the latter, then I believe you are wrong. That is, I believe that a very large percentage of those who are extremely rich partook or do partake of significant "stealing and lying" to get there or stay there. The dictum "follow the money" is a good one for prosecutors. Doing so almost inevitably uncovers corruption and firms working at the ethical edge of society. We merely don't have (or are unwilling to hire) enough financlal police to track them all down. We settle for the occasional big expose', hoping it will instill fear in others. It does not. So each decade we uncover or are surprised by new financial scams that wipe the economic slate clean and clean out our savings accounts. Then we start all over, like Sisyphus.
- brc 16y ago
  A tiny minority of wealthy people are rich because they lied, cheated or stole their way there. When you get to the uber-rich from free societies it gets even slimmer still. Take a drive through a wealthy suburb. Look at all the families in expensive houses. Do you really think they lied, cheated and stole their way to those houses? And I don't mean some Marxist 'all property is theft' view, I mean actually took something without permission or told a lie in order to get someone to hand over money. And that's just one small area within one country. When you add up all the wealthy people in free societies you'll find a lot of hardworking/lucky/smart people and very few . How about some of the successful YC exits that have made the founders wealthy. Were they lying, cheating or stealing? I don't pretend there aren't people who haven't cheated their way to riches, just that they are a tiny, tiny minority of the people who have a lot of wealth. Sure, if you're going to look at the courts system, that's what you'll find. But that's like inspecting a garbage dump and announcing the world is covered in litter. But if you look around and all you see liars, cheats and theives, then you've got a very skewed view of reality. If this is your worldview : 'I believe that a very large percentage of those who are extremely rich partook or do partake of significant "stealing and lying" to get there or stay there.' Then there is nothing more you and I can discuss because we look at the world in very different ways. And I loudly wonder what you're doing on this site.
  - sireat 16y ago
    On the other hand, your own view might be skewed if you are only looking at USA. USA offers the most opportunity(including numerous lottery type multipliers for outliers) to get rich without breaking common ethic norms . I am currently in a European country with an average Gini coefficient. Still, almost everyone (read over 90%) of rich have indulged in suspicious behavior while creating their fortunes. Since this is only using public information, one can only hazard to guess what lurks around in shadows. Sadly, when I look at a rich suburb here, most of it belongs to people who have benefited from corruption, embezzlement, stealing, lying, cheating, contraband(least of evils here) et al.
SkyMarshal 16y ago
No time for a thorough answer, but a few clues as to why it's not always a great thing. First, some data: http://sociology.ucsc.edu/whorulesamerica/power/wealth.html http://sociology.ucsc.edu/whorulesamerica/power/wealth.html http://www.good.is/post/americans-are-horribly-misinformed-about-who-has-money/ http://www.good.is/post/americans-are-horribly-misinformed-a... In a nutshell: the top 20% of the populace controls 85% of the US's wealth. 1. Increasing wealth concentration = increasing concentration of political power => democracy undermined. US is excellent example - the populace can vote, but only for candidates preselected by funders in the top 20%; populace can advocate, but top 20% has much better access, influence (due to both campaign funding and 'revolving door' jobs when leaving office), and in some cases actually writes the legislation (bank bailout being a major example). When that happens, you get capture of the government and regulators, financial excess & crisis, and symptoms of banana republic: http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/ http://www.theatlantic.com/magazine/archive/2009/05/the-quie... 2. 'As long as each generation is relatively wealthier than the prior one, I don't care about the spread within that generation.' That's held true for decades, but is not guaranteed to continue forever. Problem of induction: no amount of confirming observations can prove a theory true, while one single refuting observation can disprove it. Eg, even if all strata of every generation has always been relatively wealthier than the previous generation, that is no guarantee the same thing will continue indefinitely in the future. Highly concentrated wealth also skews some economic statistics, masking the plight of the lower and middle class. The latter can even be in decline while the top 20% are making out like bandits by outsourcing chunks of our wealth-creating 'making things' industries to higher-profit-margin manufacturing centers, and that wouldn't show up on some stats based on averages. The workers get laid off while the CEOs, boards, 'pay consultants', and shareholders pocket the increased profits. And when the top 20% controls 85% of the wealth, guess who those shareholders are. Bottom 80% is increasingly locked out of the wealth that can be generated from ownership, and forced to subsist as wage slaves. There are arguments that is what is beginning to happen now. 3. 'This continual improvement in wealth amongst my own family is proof enough that the very rich aren't impinging on what really matters, which is improving living standards for the majority of people.' Your standard for 'proof' is pretty low. That's a single data point anecdote. C'mon now. 4. Extremely high wealth concentration has historically been associated with revolutions and other unrest. The French Revolution comes to mind. I'll let the amateur historians here argue over causality, but it's really not a road we want to go down. For anyone who believes in the adaptive, corrective power of free markets and democratic government, increasingly extreme wealth concentration should be a concern, since it can and does undermine exactly that. PS - I'm not implying wealth redistribution is the solution, since that's just a poor kluge that addresses the symptoms rather than the underlying problem/s. But I do think the reasons for this accelerated wealth concentration need to be clearly understood, and in some cases neutralized - unpunished financial fraud that led to the crisis, CEO pay based on board & pay consultant connections, free trade with countries that allow effective slave labor, among others.

by brc 16y ago

giardini 16y ago

"...apart from a very tiny minority who steal or lie their way to it..." Do you mean they are a "tiny minority" because - they are already members of a tiny minority (those who are extremely rich), or - those "who steal or lie their way" are a small part of those who are extremely rich? If the latter, then I believe you are wrong. That is, I believe that a very large percentage of those who are extremely rich partook or do partake of significant "stealing and lying" to get there or stay there. The dictum "follow the money" is a good one for prosecutors. Doing so almost inevitably uncovers corruption and firms working at the ethical edge of society. We merely don't have (or are unwilling to hire) enough financlal police to track them all down. We settle for the occasional big expose', hoping it will instill fear in others. It does not. So each decade we uncover or are surprised by new financial scams that wipe the economic slate clean and clean out our savings accounts. Then we start all over, like Sisyphus.

brc 16y ago
A tiny minority of wealthy people are rich because they lied, cheated or stole their way there. When you get to the uber-rich from free societies it gets even slimmer still. Take a drive through a wealthy suburb. Look at all the families in expensive houses. Do you really think they lied, cheated and stole their way to those houses? And I don't mean some Marxist 'all property is theft' view, I mean actually took something without permission or told a lie in order to get someone to hand over money. And that's just one small area within one country. When you add up all the wealthy people in free societies you'll find a lot of hardworking/lucky/smart people and very few . How about some of the successful YC exits that have made the founders wealthy. Were they lying, cheating or stealing? I don't pretend there aren't people who haven't cheated their way to riches, just that they are a tiny, tiny minority of the people who have a lot of wealth. Sure, if you're going to look at the courts system, that's what you'll find. But that's like inspecting a garbage dump and announcing the world is covered in litter. But if you look around and all you see liars, cheats and theives, then you've got a very skewed view of reality. If this is your worldview : 'I believe that a very large percentage of those who are extremely rich partook or do partake of significant "stealing and lying" to get there or stay there.' Then there is nothing more you and I can discuss because we look at the world in very different ways. And I loudly wonder what you're doing on this site.
- sireat 16y ago
  On the other hand, your own view might be skewed if you are only looking at USA. USA offers the most opportunity(including numerous lottery type multipliers for outliers) to get rich without breaking common ethic norms . I am currently in a European country with an average Gini coefficient. Still, almost everyone (read over 90%) of rich have indulged in suspicious behavior while creating their fortunes. Since this is only using public information, one can only hazard to guess what lurks around in shadows. Sadly, when I look at a rich suburb here, most of it belongs to people who have benefited from corruption, embezzlement, stealing, lying, cheating, contraband(least of evils here) et al.

SkyMarshal 16y ago

No time for a thorough answer, but a few clues as to why it's not always a great thing. First, some data: http://sociology.ucsc.edu/whorulesamerica/power/wealth.html http://sociology.ucsc.edu/whorulesamerica/power/wealth.html http://www.good.is/post/americans-are-horribly-misinformed-about-who-has-money/ http://www.good.is/post/americans-are-horribly-misinformed-a... In a nutshell: the top 20% of the populace controls 85% of the US's wealth. 1. Increasing wealth concentration = increasing concentration of political power => democracy undermined. US is excellent example - the populace can vote, but only for candidates preselected by funders in the top 20%; populace can advocate, but top 20% has much better access, influence (due to both campaign funding and 'revolving door' jobs when leaving office), and in some cases actually writes the legislation (bank bailout being a major example). When that happens, you get capture of the government and regulators, financial excess & crisis, and symptoms of banana republic: http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/ http://www.theatlantic.com/magazine/archive/2009/05/the-quie... 2. 'As long as each generation is relatively wealthier than the prior one, I don't care about the spread within that generation.' That's held true for decades, but is not guaranteed to continue forever. Problem of induction: no amount of confirming observations can prove a theory true, while one single refuting observation can disprove it. Eg, even if all strata of every generation has always been relatively wealthier than the previous generation, that is no guarantee the same thing will continue indefinitely in the future. Highly concentrated wealth also skews some economic statistics, masking the plight of the lower and middle class. The latter can even be in decline while the top 20% are making out like bandits by outsourcing chunks of our wealth-creating 'making things' industries to higher-profit-margin manufacturing centers, and that wouldn't show up on some stats based on averages. The workers get laid off while the CEOs, boards, 'pay consultants', and shareholders pocket the increased profits. And when the top 20% controls 85% of the wealth, guess who those shareholders are. Bottom 80% is increasingly locked out of the wealth that can be generated from ownership, and forced to subsist as wage slaves. There are arguments that is what is beginning to happen now. 3. 'This continual improvement in wealth amongst my own family is proof enough that the very rich aren't impinging on what really matters, which is improving living standards for the majority of people.' Your standard for 'proof' is pretty low. That's a single data point anecdote. C'mon now. 4. Extremely high wealth concentration has historically been associated with revolutions and other unrest. The French Revolution comes to mind. I'll let the amateur historians here argue over causality, but it's really not a road we want to go down. For anyone who believes in the adaptive, corrective power of free markets and democratic government, increasingly extreme wealth concentration should be a concern, since it can and does undermine exactly that. PS - I'm not implying wealth redistribution is the solution, since that's just a poor kluge that addresses the symptoms rather than the underlying problem/s. But I do think the reasons for this accelerated wealth concentration need to be clearly understood, and in some cases neutralized - unpunished financial fraud that led to the crisis, CEO pay based on board & pay consultant connections, free trade with countries that allow effective slave labor, among others.