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Thomas Piketty’s plan to fix the economy
- missedthecue 7y agoI am still unable to fathom why he thinks inequality is a problem in and of itself. Hunger, famine, war, disease, we all understand are bad because they have negative consequences on real human lives. Jeff Bezos owning 12% of Amazon does not make me any worse off and if he owned 11% instead it would not make my life any better. Now there are certain things that can that can contribute to people accumulating excessive amounts at another person's expense. Regulatory capture and economic cartels for instance. But those are never brought up by Picketty's breed. Their issues is that someone owns more than someone else. I suppose my advice to Picketty would be that if he is going to commit one of the seven deadly sins, he might choose a funner one than envy.
- norgie 7y agoPretty sure this just makes you a fucking moron.
- missedthecue 7y agoPlease follow the rules of this site.
- dang 7y agoPersonal attacks will get you banned here, regardless of how ignorant someone else is or you feel they are. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and using HN as intended, we'd be grateful.
- neilwilson 7y agoThe worst thing is that it is not the inequality of wealth that matters. It's the inequality of power. What Piketty and others of this philosophical movement believe is that taking money away from people is the same as removing power. They are going to be disappointed. Power is a capital item, not a revenue item. Money gets you the contacts with the right people. Lack of money doesn't remove them. Plus, of course, there isn't a fixed amount of wealth - particularly not financial wealth. So why confiscate when you can accommodate?
- missedthecue 7y agoThough he might handwave at this notion of "power imbalance", you and I both fully understand that this is not the core issue driving his philosophy. Someone making $120k a year can afford to hire a lobbyist in their state legislature. Should no one make $120k? If there were no billionaires would the so called "power imbalance" be restored? Does someone with $900 million not have the power of someone with $1 billion? Of course not. And money doesn't linearly equate with power. There are a number of powerful people in Washington, even unelected ones, who have no substantial fortune to their name yet wield far more power than say Jack Dorsey, Bill Ackman, or Marc Andreeson. If Piketty was truly against all concentrations of power, he would call himself a libertarian. But Piketty is not against concentrations of power. The core idea behind Piketty's philosophy is a moral one. He believes that some people having a significant amount more than others is a moral failure in society, and must be corrected, even at an economic cost.
- mcv 7y agoPeople in Washington (or elsewhere) who wield a lot of power without being rich, wield that power because it has been delegated to them. They are accountable for that power. Rich people are not, but probably should be. The problem isn't merely the concentration of power, it's the concentration of unaccountable power. This is also why people are upset about secret courts and lack of congressional oversight over secret services: it withdraws accountability from an institute wielding power.
- missedthecue 7y ago>People in Washington (or elsewhere) who wield a lot of power without being rich, wield that power because it has been delegated to them. They are accountable for that power. Rich people are not, but probably should be. I specified the qualifier "unelected"
- mcv 7y agoThere are more kinds of delegated power, though.
- mcntsh 7y ago> I am still unable to fathom why he thinks inequality is a problem in and of itself. Hunger, famine, war, disease, we all understand are bad because they have negative consequences on real human lives. Jeff Bezos owning 12% of Amazon does not make me any worse off and if he owned 11% instead it would not make my life any better. Massive income inequality impacts social and economic mobility within a society. If 1% of the population owns 40% of the wealth, it means a disproportional amount value labor provides is going to a small group of people.
- ChrisLomont 7y agoLabor doesn’t create all value.
- kdtsh 7y agoWhere does value come from besides labour? If gold was everywhere, it wouldn’t be as valuable as it is - but it’s not, you have to dig it out of the ground and it can be hard to find; the labour input into the process of producing gold is what gives gold its value. A silicon rock is about as useful as any other rock, but the labour which goes into fabricating it into useful components is what gives it its value. A hammer is useless without an arm to swing it. Even when that arm is attached to a semi-autonomous machine, its sole purpose is to reduce the time expenses by human labour on some material - this devalues human labour in the abstract (not a bad thing of course, in fact crucial for our social and technological development), but at the end of the day the process reduces entirely to human labour producing value.
- slawekrewaj 7y agoAs a resident of a former communist country I can tell you, from my country experience, that labor is definitely not enough to create any value. You need two other things: 1. Savings which you can use as a capital to improve the efficiency of labor - think buying tools before you start working. 2. Proper organization of work, which is the task of entrepreneurs. Without them people can work hard and produce no value at all. It happens everywhere in the world today, where some bureaucrats get the power to decide what people should do. It happened a lot in all communist countries, where large parts of people's effort were under their control. If people's labor was everything you need to create value, then why are people in North Korea starving? Do you suggest that they don't work hard enough?
- credit_guy 7y agoIt's very easy to make the logical leap that increasing inequality is equivalent to "the rich get richer and the poor get poorer". And most people don't necessarily have a problem with "the rich get richer" part, but they do object to "the poor get poorer". It is a leap though. Bezos, Gates, Musk, Buffet, Page, Brin, Zuckerberg all started as regular people and became ultra-rich through their work and ideas. But it's not a complete fallacy either. If you are a real estate owner in New York City, your assets continue appreciating at a good pace, well above inflation, and you have a vested interest in NIMBY, which does indeed restrict social mobility. Social mobility, or social mobility opportunity are harder to measure though, so a lot of people are ok with using the inequality as a proxy. I do agree with you that it's an imperfect proxy, and focusing on it can have negative side-effects.
- disgruntledphd2 7y agoI'm pretty sure that all of the people you note had middle-class to upper-middle-class parents, so potentially you are proving Piketty's point.
- credit_guy 7y agoWe can do a random search through the founders of various unicorns. My first hit was Brian Chesky [1], one of the Airbnb founders. His parents were social workers. Stripe was founded by two brothers who were born in Limerick, Ireland. Maybe they were middle class in Limerick, but most likely not rich by global standards. They are now worth $3BN each [2]. Instacart was founded by Apoorva Mehta, who was born in India, and whose parents immigrated to Canada in 2000. Apoorva doesn't have a wikipedia page, but again, very likely his family was not rich. If you go through the wikipedia unicorn list [3], you'll find many founders that appear to be from middle or upper-middle class, but also many founders from lower-middle class as well. [1] https://en.wikipedia.org/wiki/Brian_Chesky https://en.wikipedia.org/wiki/Brian_Chesky [2] https://en.wikipedia.org/wiki/John_Collison https://en.wikipedia.org/wiki/John_Collison [3] https://en.wikipedia.org/wiki/List_of_unicorn_startup_companies https://en.wikipedia.org/wiki/List_of_unicorn_startup_compan...
- rathel 7y agoEconomic inequality (and erosion of middle class) is water to populists' mill. We have living examples of this right now.
- missedthecue 7y agoMy issue with statements like this is that there is no such thing as the "middle class". It's a political concept, not an economic one. It has no definition. Furthermore, if you try to define it the way is usually defined - as the people making between x% of the median - it is mathematically impossible for it to shrink so long as the population continues to grow.
- cbnotfromthere 7y agothere is no such thing as the "middle class". It's a political concept, not an economic one. It is absolutely an economic concept. It has no definition. It absolutely has a definition - a very clear one: the middle class contains anyone who repeatedly ends up every month with disposable money after all their expenses are paid. Furthermore, if you try to define it the way is usually defined - as the people making between x% of the median Nobody except yourself defines middle class they way you claim. https://yourlogicalfallacyis.com/strawman https://yourlogicalfallacyis.com/strawman
- supercanuck 7y agoSlavery is the most extreme case of inequality. How close do you need to get to slavery before inequality is a problem?
- missedthecue 7y agoSlavery is a basic human rights violation... Jeff Bezos owning $100B in Amazon stock is not. Piketty is obviously not writing abolitionist literature
- supercanuck 7y agoThe problem in, and of itself, is not that Jeff Bozos has 100B, it is that by Jeff Bezos having 100M, he is able to bend the political environment to benefit him. creating more wealth and reducing the wealth of others. The tax code is a great example of that. Piketty's book, clearly demonstrates that. By the way, for every "Bezos", there is a Walmart Heiress who simply chose the right womb to come out of, and while Bezos may have "built" Amazon, he needed early investors, e.g. that Wal Mart Heiress for example, to start that instead of going to public markets.
- missedthecue 7y agoThen the solution should not be to take Bezos share in this business. Like I said earlier, there is no clear point where someone's wealth stops giving them influence. The solution should be to increase the rigidity of government. But Piketty does not advocate that.
- supercanuck 7y agoYou don’t seem the type to be persuaded to a progressive tax system or a change to property rights. So unless you have a different proposal to fix the system, assuming you even recognize it as a problem, their really isn’t anywhere to go from here.
- seibelj 7y agoIn a voluntary society, why don’t people who advocate for things like the abolition of private property (the thesis of the linked article) just create this themselves? Absolutely nothing stops a group from creating a non-profit, electing a board of trustees that appoints managers, and signing lifetime contracts to pledge their income to it. Then the board and it’s managers can divvy up the income among everyone fairly, build communal housing, negotiate to provide health benefits for all at group discounts, provide retirement income, etc. And if people sign on when they are young, then some will become more successful and provide more income for the whole. This is the same as taxes, except even better because all group members are ideologically aligned and would be happy to give all their income away to an elected group of people who will spend it on everyone fairly. And this way, people who don’t want to participate aren’t forced to do so.
- neilwilson 7y ago"Absolutely nothing stops a group from creating a non-profit, electing a board of trustees that appoints managers" We have done. They're called nations. Other nations are available. You're not forced to stay in the one you are born in. That's enshrined in the United nations charter on human rights.
- seibelj 7y agoThe nation is quite unlikely to radically increase taxes and outlaw private property. Why not create this system yourself among like-minded people?
- 0x8BADF00D 7y agoThey tried that in Waco. Didn’t work out so well for them. It turns out that you can’t really escape the tyranny of the government. Might as well suck it up, and have strong property rights. At least that is a check on government tyranny.
- neilwilson 7y ago
- thedudeabides5 7y agoPiketty’s solution is that we move beyond private ownership to some blend of private, public, and temporary ownership. (Total abolition of private property, à la Soviet Union, for Piketty, was an ill-advised failure.) Since many societal goods are often already owned publicly, like electrical grids, highways, or parks, and some are owned communally, like worker cooperatives, it is easy to imagine this realm expanding. 1800 words into the article and finally we get the grand plan. Like the rest of Piketty's work, yell real loud about a real pain, make interesting allusions to economic history, and offer no real solutions.
- grandridge 7y agoPiketty is a fool. End central banking and lender of last resort. That is it. There will still be a natural order of poor and rich just like every other natural system but it will not be as extreme and it will not reward the wrong people
- dang 7y agoPlease make your points without calling names. Maybe you don't owe Piketty better, but you owe this community better if you're posting to it. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- grandridge 7y agoNo thanks, I'm good