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The Rich Can't Get Richer Forever
- k__ 7y agoIf we make more and more of the earth/universe usable for humans and only 'the rich' own these usables, why not?
- deleted 7y ago[deleted]
- seanmcdirmid 7y agoExactly, as long as we keep deriving most productivity gains from capital rather than labor, then rising inequality is inevitable without some kind of intervention.
- isostatic 7y agoEventually, society revolts, and 'the rich' end up owning a place for their head in a basket.
- seanmcdirmid 7y agoThat is optimistic. The rich could also just get rid of all the poor people they don’t need. Armed drones even reduce the need for human soldiers to get that done. Anyways, let’s hope for much more peaceful solutions.
- bt848 7y agoYes, all those laborers the rich don't need: https://www.angryflower.com/348.html https://www.angryflower.com/348.html
- seanmcdirmid 7y agoAutomation requires capital, not so much labor.
- imtringued 7y agoSomeone has to operate the machines.
- barrkel 7y agoPoor is fractal from this perspective. Like stack ranking, rich people would have to invent poor people in order to save their own hides when their turn comes around.
- seanmcdirmid 7y agoSure. They still need people to program the robots. So...uhm, we techies become the new poor...
- k__ 7y agoSo is this where the system breaks? The skill needed to keep it going even on the lowest level is so hight that you can't trick the people working at the lowest anymore?
- seanmcdirmid 7y agoIt’s a temporary blip, until the machines can program themselves...well, even the rich people might be expendable at that point.
- isostatic 7y ago> The rich could also just get rid of all the poor people they don’t need That still leaves the poor people they do need
- k__ 7y agoI don't remember anymore where I read this, but that people start revolting when the pain gets too much is a myth. The problem seems that you can ease people into becoming too weak before they realize that they need to do something.
- TCR19 7y agoI wonder what happens to society in a theoretical scenario where the foundation of why we build societies change. I understand this is way over simplifying it, but one of the basic premises of building a society is to control a finite resource. [We are going to control this water, this farmable land, oil field, etc.] I wonder what would happen to society if we were able to make more and more of the universe useable, if 3d printing became so efficient we were able to make our own goods, or other scenarios that would make it so we no longer needed to rely on a society in a classic sense to accumulate a "limited" resource. Would it fundamentally change how we govern ourselves or would we just change what metrics we use to define the rich/not rich?
- praptak 7y agoIn other words, this system relies on constant growth. We're hitting the first limit to that growth, CO2.
- adrianN 7y agoThe speed of light puts pretty hard limits on the amount of things you can meaningfully own.
- nugget 7y agoImplementation may be politically difficult, but the solution isn't rocket science: substantially raise the inheritance tax and abolish all trust loopholes.
- toomuchtodo 7y agoAlso raise taxes on investment income and implement a land value tax.
- nugget 7y agoI believe lower taxes stimulate productive investment of both human and financial capital so I'd prefer to lower income and investment taxes. But this only seems fair and sustainable if you raise the inheritance tax to a very high level. The problem isn't wealth so much as dynastic wealth. Land value tax I support 100%.
- lastofus 7y agoIsn’t this a restatement of trickle down economic theory (sans raising inheritance tax), which has not really panned out when attempted?
- nugget 7y agoMy understanding of trickle down economics is that you get more economic activity by putting a dollar in the hands of the bottom 10% than the top 10%, which makes sense since the propensity to consumer is higher at the bottom. By investing, the top % supports invention and innovation. By consuming, the bottom % validates those inventions and innovations that are worthwhile, versus those that are worthless. Both functions are required in order to keep the economy humming along producing and consuming new goods and services at a rapid pace. There would seem to be some function which maximizes the utility of each group in their respective roles. That's what I would want tax policy to reinforce.
- deleted 7y ago
- newintellectual 7y agoSaid the envious creeps too dumb to be rich and not wanting anyone else to be either.
- opportune 7y agoThe article mentions globalization but doesn't view inequality through a global lens. If you look only within rich nations, yes inequality has increased, because the poor and blue collar middle class have lost a lot of jobs to poorer countries. But that phenomenon is actually reducing inequality as measured from a global view. The biggest issue I have with the article is that it ignores the geopolitical trends that were actual checks on inequality historically. Inequality typically only decreases in the face of an existential threat to the wealthy; when the US passed 90% marginal tax rates, it was to fund a war where the ability of the wealthy to remain in power at all was in question. Getting pensions and many other social democratic policies which benefit the poor and middle class, in many countries in the world, often required blood instead of the free market.
- lanevorockz 7y agoVery true, in terms of poverty the world was never as equal as today. My guess is that Free Software had the consequence of providing a lot of value to people for free, taking part of the cost of the supply chain. This is the real equaliser, it is not tax and it's not the market. In all honesty even in their example, the 1% in the US is not stable .. it's more like a game of chair, if you blink you can loose your seat.
- majewsky 7y agoFree Software is a miniscule part of that process, if it even is a part at all. The main reason is reduced transport and communication costs making it feasible to outsource work across continents.
- fkdo 7y agoFree software plays a very large role in our communication infrastructure.
- majewsky 7y agoYes, but it's easy to imagine a world where the Free Software movement never happened, yet there still is a ton of communication infrastructure. For proof, just consider that globalization started way before Free Software.
- throwawaysea 7y agoWhy is inequality a problem if everyone else’s quality of life is improving? Poverty is lower than ever and most adults in developed countries have a smartphone, an unimaginable luxury that not even the richest could have twenty years ago. Things are good.
- dv_dt 7y agoGlobally quality of life is improving, locally the US is regressing to third world status among larger and larger areas. Financial measures somewhat cover up the increase in instability in people’s lives.
- throwawaysea 7y agoIt is a gross exaggeration to claim that the US is regressing to third world status. See https://www.marketwatch.com/story/americans-living-standards-are-at-an-all-time-high-heres-proof-2019-05-02 https://www.marketwatch.com/story/americans-living-standards.... Americans are better off today than ever before.
- dv_dt 7y agoThe UN report on poverty in the US is more informative to me. https://www.theguardian.com/world/2017/dec/15/extreme-poverty-america-un-special-monitor-report https://www.theguardian.com/world/2017/dec/15/extreme-povert...
- james_s_tayler 7y agoI think you need to read Factfulness.
- barrkel 7y agoEveryone else's quality of life isn't improving. US real income for the middle classes has been stagnating since the 70s - https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
- meshr 7y agoYou can "print" unlimited amount of money but Earth resources are limited, moreover its usage is overshot (Earth Overshoot Day is 29 July 2019). So the problem is how the money is spent. We should tax money that spent to decrease Overshoot Day.
- gridlockd 7y agoEarth's resources are limited over a given timespan, but most of these resources are not exhaustible, particularly not hydrocarbons. Given that all human populations that have reached a certain standard of living so far have ceased to grow beyond replacement levels, overpopulation is likely not going to be a long-term concern either. It is therefore not a problem to overshoot for a while, assuming that we eventually reach a level of technology that lets us maintain our standard of living in a sustainable fashion.
- meshr 7y agoEarth's resources are decreasing over a given timespan because we both spent exhaustible resources and produce wastes for future generations. It can’t be sustainable system. There is no evidence that overpopulation is not long-term concern. Look at Africa, India, China New technologies are not guaranteed. You can’t simultaneously give less and less time and resources to your children and ask them to be better than you. They will choose to continue your tactic until civilization collapse as future generations can't vote
- gridlockd 7y ago> Earth's resources are decreasing over a given timespan because we both spent exhaustible resources and produce wastes for future generations. To my awareness, there is no critical resource that is both exhaustible and non-substitutable. Waste is not a fundamental issue, it can be stockpiled and possibly recycled with future technology. Most of it can also simply be burned with relatively low environmental impact, at least in modern incinerators [1]. [1]https://en.wikipedia.org/wiki/Incineration#Arguments_for_incineration https://en.wikipedia.org/wiki/Incineration#Arguments_for_inc... > There is no evidence that overpopulation is not long-term concern. Look at Africa, India, China. Yes, do look at these countries: Chinese fertility today is well below replacement, despite giving up the disastrous "one child policy". Indian fertility rates are at 2.2, very near replacement levels. African fertility rates vary wildly with countries, but here as well you can see that fertility is inversely correlated with standard of living. Moreover, a low standard of living also implies relatively low resource usage. > New technologies are not guaranteed. New technology isn't strictly required, it just implies a lower standard of living. > You can’t simultaneously give less and less time and resources to your children and ask them to be better than you. Of course you can. The more pressure there is, the more likely it is that new solutions are developed. Imagine if there wasn't any petrol left, we'd put a lot more effort into renewables. They wouldn't even need subsidies. > They will choose to continue your tactic until civilization collapse as future generations can't vote Well, sometimes civilizations do collapse. We may well enter an age of decline again. We also may launch a global thermonuclear war. I'm not saying a rosy future is guaranteed, I'm saying resource exhaustion and overpopulation are not as big a concern as people believe.
- throwawaysea 7y agoThe problem with inheritance taxes, property taxes, etc. is that they erode the meaning of ownership and permanence. For example, if I as a parent want to save up and give up my immediate gratification from spending that money so my children have a head start or even a luxurious cushion, what’s wrong with that? That’s me spending my utility the way I want. With property taxes, ownership turns into renting - you never really own anything and even things you already bought can have their ownership eroded into nothing by subsequent policy.
- gerbilly 7y ago> The problem with inheritance taxes, property taxes, etc. is that they erode the meaning of ownership and permanence. That's just it, we never really own anything anyway. If the rich are richer than us, it's because we gave our wealth to them, or rather let them take it. To he who has much, more will be given...
- throwawaysea 7y ago> it's because we gave their riches to them. This seems disconnected from reality. It is more accurate to say that they earned it through voluntary two party transactions.
- barrkel 7y agoYou're dying of cancer. How much will you pay doctors / drug company to keep you alive? Is the transaction voluntary? Think carefully what voluntary means. Many, if not most, people, in their daily lives, don't have much volition.
- throwawaysea 7y agoI don’t think the second bit follows from the first. You’ve cherry picked an example of tough circumstances that most people don’t face.
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- quietthrow 7y agoI see people throwing ideas and most of these ideas rely on politicians and/or govt doing something. Is there a non govt or non politician dependent way of solving inequality? facebook connected the world not govt or politicians. Google made knowledge and information available to the whole world not a politician or a govt. (I understand there are down sides to these companies products but so is there to govts/politicians) Even as a thought experiment I would like to see some ideas here to solve inequality in way that just keeps the politician and govt out of it (cos all they do is make the common people foolishly quarrel against each other while they retain power and do what they think is right)
- seanmcdirmid 7y agoA political solution that doesn’t involve politicians or the government will just create its own politicians and government to sustain it. Look what happened during the American and French revolutions, or the Russian revolution. It always starts out as “we don’t need that” and in the end you simply recreate that.
- gridlockd 7y agoLocal inequality may have gone up lately, largely due to loose monetary policy driving up prices for assets which most workers do not (and choose not to) own. Such paper wealth can disappear rapidly during an asset repricing (market crash), as we can see in this graph[1]. Also, this is the result of Keynesianist monetary policy, a far cry away from the persuasions of Milton Friedman. However, global inequality - especially comparing the economic classes across countries - is way down. For instance, Chinese standard of living is far higher today than in the past, as is the cost of their labor - relative to an American worker. In due time, many a Chinese worker will find themselves uncompetitive due to increased costs - much like the American worker before them. What would put things back into balance is a massive global re-pricing of labor. This is politically unfavorable and those countries that maintain a reserve currency can put it off for a long time. [1] https://ourworldindata.org/uploads/2018/07/Top-Incomes.png https://ourworldindata.org/uploads/2018/07/Top-Incomes.png
- aledalgrande 7y agoAs much as in theory inheritance tax is a solution for the problem, I don't think in practice it works well. The ultra rich will always have avenues to escape tax. The middle class instead, trying to secure a better future for the family, will get hit the hardest. I am conflicted about this way of trying to solve the problem. Also, this is assuming the tax money gets used efficiently and not to the advantage of the top earners.
- k__ 7y agoYes, we also need to rewrite foundation law and trust fund law.
- nine_k 7y agoA half-way solution could be progressive inheritance tax, with a rather high bend point. When a father who back in the day bought a house in Silicon Valley for $100k passes it to his child, the child does not pay a ton (or likely anything at all) from the few million of current value of the house. When a parent passes a $10B enterprie to children, the children have to split and sell a part of the business to pay the inheritance tax. The children still retain a successful multi-billion business, but its market share becomes smaller, increasing the competition on the market.
- human20190310 7y agoThe inevitability of people trying to beat the system isn't a reason to abandon the principle.
- aledalgrande 7y agoBut it forces you to think if there is a better solution.
- asdff 7y agoThe IRS filing your taxes automatically would be a start.
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- becga 7y agoAll wealth originates from Nature. Destroy enough of it and wealth will increase for some. Enough people die off, land and property can be reclaimed.
- DoreenMichele 7y agoAs Kuznets determined, it was after the American Civil War that the gap between the rich and the poor began to widen. I wonder how much of that was counting blacks in the South as people (after slavery was ended). During the post Civil War era, they typically made half as much as whites for the same work. I read a history book years ago which, unfortunately, I can't determine the name of. The current narrative is that minimum wage laws are oppressive racist nastiness, but this book asserted that the Federal minimum wage was intended to put a stop to the practice of paying blacks half as much as whites in the Deep South so as to bring the South more in line with the rest of the nation generally.
- jnordwick 7y agoThis is almost exactly opposes the history of union support of minimum wage legislation. It was pushed and supported by predominantly white unions to protect their workers from lower skill and cheaper minority workers. The minimum wage doesn't just say you can't hire a worker for less than an amount. The other side is that you are not allowed to sell your labor for less than the floor. White union workers were being out competed on price by workers who were either trying to gain experience of lived in cheaper neighborhoods. While some higher skilled and higher priced workers are needed, not all of them need that level of expertise and it prices out people trying to enter into a field where the on the job experience would be invaluable. If you can produce 2/3rs of the value on lower skill tasks but at half the price, it is better to hire two of you than one higher skilled individual. Plus it allowed you to build skills for the next job. These minority workers were seen as a social (racism) and economic threat. There were literally white-only unions that supported these policies. The infamous Cabrini Green chicago housing project was a more recent example of this. It was mostly poor black families, and many thought it would be a boon for local black employment. In reality, white union workers were bused it at huge expense to fill the roles. https://www.forbes.com/sites/carriesheffield/2014/04/29/on-the-historically-racist-motivations-behind-minimum-wage/ https://www.forbes.com/sites/carriesheffield/2014/04/29/on-t... https://mises.org/wire/racist-history-minimum-wage-laws https://mises.org/wire/racist-history-minimum-wage-laws https://reason.com/2019/01/21/washington-forced-segregation/ https://reason.com/2019/01/21/washington-forced-segregation/
- billions 7y agoIs the Hacker News community open to alternative viewpoints on this subject? It would be informative to read a wide spectrum of opinions, like we get for things like microprocessor design and code libraries.
- squirrelicus 7y agoGenerally you get downvoted for doing so, but people still try to argue. I have a lot to say on the subject, but one thing I still need an argument for is why inequality is bad intrinsically. I'd love to hear a cogent argument that addresses that fundamental point, but what I end up seeing in the wild is camps of people who think inequality is some intrinsic evil, and those that don't think it's relevant to anything.
- lanstin 7y agoIsn’t the problem with inequality that it makes the society less stable? More envy and less feeling of being part of a group? It is good that poverty in the world is much less and there are more people in the middle class but it is also a problem that wages in the US are stagnant for large swath of the population that feels like it isn’t part of the group anymore and makes trouble because of it.
- majewsky 7y ago> Isn’t the problem with inequality that it makes the society less stable? Yes. However, too much equality also makes society too static, because no one is incentivized to innovate anymore. The problem, as always, is maintaining the right balance.
- yesenadam 7y ago>However, too much equality also makes society too static, because no one is incentivized to innovate anymore. Sorry if this is a naive question, but is that really true? What's the evidence for believing that, much less treating it as fact?
- tempsy 7y agoThis is a bit dark but at a certain point I do think we’ll see assassination attempts on billionaires (not politicians) for simply being billionaires. It does feel like we’re at a point where the social fabric of rich nations is ripping due to rising wealth inequality and at a certain point the bottom will have had enough.
- capnprotonmail 7y agoI watched an interesting interview with a billionaire a while ago, who said that after you reach a given net worth it actually becomes very hard (unless you're unlucky) to significantly diminish your wealth through consumption, and that in fact consuming more goods often just increases your net worth: Luxury cars, apartments, mansions, real estate, parks, yachts or resources like gold often appreciate in value with time (at least they did for the last 60 years), so the more of your money you spend on these goods, the richer you'll become. The words that the interviewee used were "if you're rich you can't destroy money by consumption", which is of course not 100 % true, but explains really well why the rich are getting richer. In addition, many countries have much lower taxes on capital gains compared to other types of income, which is another factor that favors further concentration of money with those people that already have a lot of money.
- ido 7y agoI don't know if someone else also said it, but Bill Gates did too. He also said something to the effect that past $5m or so[0] wealth doesn't really affect your material quality of life & it starts becoming about what you can do with that money other than consumption (with e.g. business investment or philanthropy). [0] this may have been a couple decades ago, apply inflation but it was more or less in that order of magnitude.
- asdff 7y agoVery few things in life are priced for billionaires. Millionaires, sure, but a lot of people forget that a billionaire is literally 1000 millionaires, or the equivalent wealth of 80,000 people at the poverty line. It's pretty hard for anyone to fathom that egregious level of personal wealth.
- ryacko 7y agoMillionaires buy products, billionaires buy society.
- goldcd 7y agoAs a mind experiment, imagine money randomly appeared in your bank account. $500 - Bank error in your favour and you move on with your life. $5,000 - Maybe buy you some breathing space to look for a job you prefer. Pay off a debt? $50,000 - Maybe you might quit and retrain in a new career. $500,000 - Maybe you'd start looking to see whether you could jack it all in and live off investments. $5,000,000 - Start that business you'd always fancied, without fear of failure. Or just invest and kick back. $50,000,000 - Makes more sense to invest it, and do whatever you want with the interest. Yes, I've just made up those sums and outcomes - but I think it's interesting how we look at "sizes of money" and would all do wildly different things depending on the size. e.g. If you got 10x$50,000 you're not going to retrain ten times. But give $50,000 to ten people and ten people might. Or 10x$5,000,000 and you might get 10 new businesses - but $50,000,000 is unlikely to create any viable ones.
- ciconia 7y ago> The United States was the world’s most egalitarian society. Is this a joke? And slavery is mentioned indirectly, in passing, only once? You cannot discuss equality in America without discussing slavery. Not to mention the dispossession of native Americans.
- jkmcf 7y agoPlutarch: An imbalance between rich and poor is the oldest and most fatal ailment of all republics Then look at how the Romans failed during the time of the Gracci and the US succeeded during the 1930s - 65. There’s a whole chapter devoted to this in the Durants’ Lessons of History.
- sys_64738 7y agohttps://todayscatholic.org/the-rich-man-and-lazarus-today/ https://todayscatholic.org/the-rich-man-and-lazarus-today/