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And this is a bad thing because...?

by KhoomeiK 7y ago

deleted 7y ago
[deleted]
akhilcacharya 7y ago
Because even a fraction of it is out of reach for the vast majority of people, even folks that do “everything right”.
- TheCuckedKing 7y ago
  Yes, the fraction is 1/100.
- SighDucks 7y ago
  There is no such thing as doing "everything right" a capitalist society is a zero sum game. You only make money by taking it from someone else. Sure the reserve can print more money but that only leads to currency devaluation on a macro level which on a whole reduces purchasing power of the society. You can't really address income inequality without fundamentally reshaping society.
  - deleted 7y ago
    [deleted]
  - elsewhen 7y ago
    Please read this article about how wealth is not zero sum http://www.paulgraham.com/gap.html http://www.paulgraham.com/gap.html
    - WilliamEdward 7y ago
      A millionaire would try to argue this.
      - elsewhen 7y ago
        I believe your post is an ad hominem https://en.wikipedia.org/wiki/Ad_hominem https://en.wikipedia.org/wiki/Ad_hominem
  - pensatoio 7y ago
    > you only make money by taking it from someone else This is false. Money is an expression of labor and is exchanged in return for labor or the product of someone else’s labor. Totally dismissing that the exchange of money requires both parties to gain something is a deceptive (and in my opinion, immoral) trend. When my money “grows” in the stock market. It isn’t because I took money from another person. It is not a zero-sum game.
    - Noumenon72 7y ago
      A retail investor in the stock market is playing an almost entirely zero-sum game. You're not supplying valuable information about which companies deserve capital. You're not providing scarce savings to stimulate investment. You're simply laying claim to the future earnings of society by bidding against others. It's like buying a home in San Francisco -- it's not adding value that makes your wealth go up, it's the fact that other people want what you have and you got there first. And there's a healthy helping of government interference making sure that your stake is protected against outsiders.
      - gbronner 7y ago
        Actually... you are providing liquidity to the market. Until recently, there was no easy way to transfer wealth intertemporally -- livestock died, grain spoiled, precious metals got stolen, land got invaded, etc. The faith that people have in the stock market -- that they can buy something now and sell it in 50 years with very low frictional costs, allows the market to function, which ultimately lowers the cost of acquiring and deploying capital. This also ensures that capital is matched to risk tolerance, and that capital is deployed most effectively. Imagine if each VC individually had to find a retail buyer for their shares.
    - SighDucks 7y ago
      Are we not talking about income inequality? Fact is hard currency is finite, perceived wealth or value is something else entirely. Income is typically tied to hard currency. When you make money in the stock market, you invested in a business, one that would supply a goods or services (or a derivative), of which requires taking someone else's money in exchange for that good or service.
nategri 7y ago
Let me put this in a way that a HNer can understand: It's bad because happiness has a logarithmic dependence on income. A system that permits this amount of wealth concentration is isomorphic to one that actively creates misery.
- prepend 7y ago
  I don’t think that’s necessarily true. Wealth is not zero sum. It’s possible for one person to make a billion dollars of wealth without taking it from someone else (increase in stock price, leverage for investment, etc etc). There are other factors to consider, mean wealth, median wealth, quality of life, etc. I’d rather live in a hypothetical country with $1M of purchasing power where 1% had $1B than a hypothetical country with $500k where 1% had $1M. High inequality does not mean low quality of life. Just take a look at the inequality of the US vs the inequality of third world countries. The US has higher inequality but also higher quality of life.
  - Noumenon72 7y ago
    Wealth is zero sum, only economic growth is not zero sum. If your stock goes up by a billion because you made it possible for the economy to produce an extra billion worth with the same resources, then sure. If you just bet on the market and win, or an angel drops one billion dollars on you from the sky, everything you buy with it is taken from someone else. Money is just an accounting for the actual goods and services the economy provides. There are only so many materials and laborers available at any one time and your wealth determines who gets access to them. If you buy $1 billion in chairs, other people will have to forgo things made from wood (or forgo other things to attract new lumberjacks). Your wealth represents your power to bid against them and win.
    - why_only_15 7y ago
      The point of saying that wealth is not zero sum is that it can be created, by using the available materials and laborers in different ways. This phenomenon also causes economic growth.
    - 7y ago

And this is a bad thing because...?

deleted 7y ago

[deleted]

akhilcacharya 7y ago

Because even a fraction of it is out of reach for the vast majority of people, even folks that do “everything right”.

TheCuckedKing 7y ago
Yes, the fraction is 1/100.
SighDucks 7y ago
There is no such thing as doing "everything right" a capitalist society is a zero sum game. You only make money by taking it from someone else. Sure the reserve can print more money but that only leads to currency devaluation on a macro level which on a whole reduces purchasing power of the society. You can't really address income inequality without fundamentally reshaping society.
- deleted 7y ago
  [deleted]
- elsewhen 7y ago
  Please read this article about how wealth is not zero sum http://www.paulgraham.com/gap.html http://www.paulgraham.com/gap.html
  - WilliamEdward 7y ago
    A millionaire would try to argue this.
    - elsewhen 7y ago
      I believe your post is an ad hominem https://en.wikipedia.org/wiki/Ad_hominem https://en.wikipedia.org/wiki/Ad_hominem
- pensatoio 7y ago
  > you only make money by taking it from someone else This is false. Money is an expression of labor and is exchanged in return for labor or the product of someone else’s labor. Totally dismissing that the exchange of money requires both parties to gain something is a deceptive (and in my opinion, immoral) trend. When my money “grows” in the stock market. It isn’t because I took money from another person. It is not a zero-sum game.
  - Noumenon72 7y ago
    A retail investor in the stock market is playing an almost entirely zero-sum game. You're not supplying valuable information about which companies deserve capital. You're not providing scarce savings to stimulate investment. You're simply laying claim to the future earnings of society by bidding against others. It's like buying a home in San Francisco -- it's not adding value that makes your wealth go up, it's the fact that other people want what you have and you got there first. And there's a healthy helping of government interference making sure that your stake is protected against outsiders.
    - gbronner 7y ago
      Actually... you are providing liquidity to the market. Until recently, there was no easy way to transfer wealth intertemporally -- livestock died, grain spoiled, precious metals got stolen, land got invaded, etc. The faith that people have in the stock market -- that they can buy something now and sell it in 50 years with very low frictional costs, allows the market to function, which ultimately lowers the cost of acquiring and deploying capital. This also ensures that capital is matched to risk tolerance, and that capital is deployed most effectively. Imagine if each VC individually had to find a retail buyer for their shares.
  - SighDucks 7y ago
    Are we not talking about income inequality? Fact is hard currency is finite, perceived wealth or value is something else entirely. Income is typically tied to hard currency. When you make money in the stock market, you invested in a business, one that would supply a goods or services (or a derivative), of which requires taking someone else's money in exchange for that good or service.

nategri 7y ago

Let me put this in a way that a HNer can understand: It's bad because happiness has a logarithmic dependence on income. A system that permits this amount of wealth concentration is isomorphic to one that actively creates misery.

prepend 7y ago
I don’t think that’s necessarily true. Wealth is not zero sum. It’s possible for one person to make a billion dollars of wealth without taking it from someone else (increase in stock price, leverage for investment, etc etc). There are other factors to consider, mean wealth, median wealth, quality of life, etc. I’d rather live in a hypothetical country with $1M of purchasing power where 1% had $1B than a hypothetical country with $500k where 1% had $1M. High inequality does not mean low quality of life. Just take a look at the inequality of the US vs the inequality of third world countries. The US has higher inequality but also higher quality of life.
- Noumenon72 7y ago
  Wealth is zero sum, only economic growth is not zero sum. If your stock goes up by a billion because you made it possible for the economy to produce an extra billion worth with the same resources, then sure. If you just bet on the market and win, or an angel drops one billion dollars on you from the sky, everything you buy with it is taken from someone else. Money is just an accounting for the actual goods and services the economy provides. There are only so many materials and laborers available at any one time and your wealth determines who gets access to them. If you buy $1 billion in chairs, other people will have to forgo things made from wood (or forgo other things to attract new lumberjacks). Your wealth represents your power to bid against them and win.
  - why_only_15 7y ago
    The point of saying that wealth is not zero sum is that it can be created, by using the available materials and laborers in different ways. This phenomenon also causes economic growth.
  - 7y ago