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...so this is going to be unpopular and create some cognitive dissonance around here, but I'm firmly convinced that an economic system that will allow for the t

...so this is going to be unpopular and create some cognitive dissonance around here, but I'm firmly convinced that an economic system that will allow for the top earners to earn a lot (in international comparison) can only be enabled if the bottom earners earn little (in international comparison). In the United Arab Emirates, there are price-controls in place for certain low-level services. Like the price that a hair salon can charge for a haircut is price-controlled at a low price-level. This way they prevent a situation where a hair stylist can start accumulating wealth beyond their socially assigned (slave-like) status by becoming great at their craft, opening a premium hair salon and charging premium prices and accumulating wealth in the process. [Needless to say, craftsmanship is at a very low standard over there as a result]. -- The U.S. system is basically that, only not as blatant. It keeps down the underclass, because that's what's needed to enable the elites. That makes it sound cruel and cynical. But the opposite is also cruel and cynical. Take Austria as a counter-example which has very high per-head GDP and is at the same time one of the countries with the lowest Gini-coefficients in the world (low income-disparity). Your yearly increment in wealth post wealth-transfer like tax & government spending, social security, etc in Austria when you're a McDonald's cashier is probably three times what it is in the U.S. But for a highly qualified Software Engineer it's probably only a third of what it would be if they worked an equivalent job in the U.S. Imagine you earn a six-figure salary in the U.S. in a Software Engineering job and you move to Austria: You might well find yourself in a situation where your neighbor, who is a bricklayer, has a bigger house than you, drivers a nicer car, works less hours, etc because they get paid in cash and cheat on their taxes.

idiocratic 7y ago
I'd much rather live in a country where disparity is not clear like in Austria than the US. And I'm a software engineer but that doesn't change how I think about social justice.
- stakhanov 7y ago
  But government-mandated wealth-transfer is not "justice". "Justice" also entails the ability to earn a return if you make an investment rather than having the return taken away by the government. Scenario A: Your dad is a bricklayer and teaches you how to do bricklaying. You start taking jobs in the black economy, working at construction sites, getting paid in cash and not paying taxes. You start doing that when you're 14 (which is the earliest age you can legally quit school). By the time you're 30 you will have built your own house and paid it off. Scenario B: You're 28 years old when you graduate from university with a PhD but you still cannot expect a level of income higher than the bricklayer's. In Austria you wouldn't have student debts, as your university education would have been paid for by the government, so that's good. But your daddy would have had to pay for your living expenses until you were 28. So that's a lot of money. Also, you've just spent 14 years not earning anything, so that's opportunity cost. Maybe you worked very hard at university, working late, instead of going out with your friends, doing summer internships instead of going on holiday, etc. All of that is investment not only in financial terms, but also in terms of "life energy" (if that's a word). In Scenario B, as compared with A, there is no way you will ever be able to earn a return on that investment or recoup it in financial terms. You will never catch up with the level of wealth under Scenario A. It doesn't work for the individual, and it doesn't work for the country as a whole: This is an advanced economy, and it couldn't work if there weren't doctors, lawyers, bankers, software engineers etc. But people are disincentivized from wanting those jobs, because you can do far easier and less stressful jobs that will get you to the same or even higher levels of wealth.
timwaagh 7y ago
Yeah being software engineer in europe is not much fun. It can be worse than just 'not making as much as a bricklayer'. for instance, your house might not be a house, but an appartment in a run-down area of town, much like the McD employee of this story.

idiocratic 7y ago

I'd much rather live in a country where disparity is not clear like in Austria than the US. And I'm a software engineer but that doesn't change how I think about social justice.

stakhanov 7y ago
But government-mandated wealth-transfer is not "justice". "Justice" also entails the ability to earn a return if you make an investment rather than having the return taken away by the government. Scenario A: Your dad is a bricklayer and teaches you how to do bricklaying. You start taking jobs in the black economy, working at construction sites, getting paid in cash and not paying taxes. You start doing that when you're 14 (which is the earliest age you can legally quit school). By the time you're 30 you will have built your own house and paid it off. Scenario B: You're 28 years old when you graduate from university with a PhD but you still cannot expect a level of income higher than the bricklayer's. In Austria you wouldn't have student debts, as your university education would have been paid for by the government, so that's good. But your daddy would have had to pay for your living expenses until you were 28. So that's a lot of money. Also, you've just spent 14 years not earning anything, so that's opportunity cost. Maybe you worked very hard at university, working late, instead of going out with your friends, doing summer internships instead of going on holiday, etc. All of that is investment not only in financial terms, but also in terms of "life energy" (if that's a word). In Scenario B, as compared with A, there is no way you will ever be able to earn a return on that investment or recoup it in financial terms. You will never catch up with the level of wealth under Scenario A. It doesn't work for the individual, and it doesn't work for the country as a whole: This is an advanced economy, and it couldn't work if there weren't doctors, lawyers, bankers, software engineers etc. But people are disincentivized from wanting those jobs, because you can do far easier and less stressful jobs that will get you to the same or even higher levels of wealth.

timwaagh 7y ago

Yeah being software engineer in europe is not much fun. It can be worse than just 'not making as much as a bricklayer'. for instance, your house might not be a house, but an appartment in a run-down area of town, much like the McD employee of this story.