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Why should we believe that Bill Gates has a valuable opinion on wealth inequality and its causes? His point on 1780 rentiers just doesn't hold since most of th

by mrpopo 6y ago

Why should we believe that Bill Gates has a valuable opinion on wealth inequality and its causes? His point on 1780 rentiers just doesn't hold since most of the wealth in the world was created since the 1950s. Also, Bill Gates's favored solution, a tax on consumption, will not do anything to counter the problem of exceedingly wealthy people who have so much money that they can't spend it all, even with a "lavish lifestyle".

babesh 6y ago
Because the data he presents and his argument is a good one and your logic is shete. His argument is that dynastic wealth doesn’t persist in the United States. If it did, then wealth would STILL have accreted to renters even if most of the wealth was created since the 50s. Furthermore you didn’t bother reading or noticing that he is in favor of an estate tax.
- fiblye 6y ago
  > His argument is that dynastic wealth doesn’t persist in the United States. America doesn't really have people who've been billionaires for 7 generations. But America does have people who were born into enough money to never have to worry about finances ever, had children with the same benefit, and had grandchildren in similar circumstances. Plenty of people in politics are the son or grandson of a line of rich politicians. Plenty of comfortable millionaires got their start from a lineage of inherited wealth. It's not enough money to rank on Forbes 400 and build private castles that'll last centuries, but it's definitely wealth and status being passed down. It's safe money. Many people who became billionaires aren't there through safe, steady, risk-free financial management.
  - chordalkeyboard 6y ago
    How are families preserving wealth for generations, if they aren’t engaging in safe, steady, low risk management of their wealth? Even if you ignored inflation, how much cash would someone have to accumulate in order to sustain a middle-class lifestyle for their family for multiple generations, if they weren’t investing and managing those investments?
    - babesh 6y ago
      - Investing in their kid’s education in a broad sense (attitude, career). - Marrying well i.e. marrying smart and successful people so that your progeny’s genes are the best they can be. The British aristocracy was famous for doing this. Marrying old blood to new blood. However, many cultures do the same. That is why marriage was so often a negotiated affair.
      - chordalkeyboard 6y ago
        This is true. They invest in the education and socialization of their children so their children can go get good jobs and earn big paychecks in a well-paying, low-risk industry. However that is not the same as living on accumulated wealth for generations.
        babesh 6y ago
        True but the above compounds over time.
  - babesh 6y ago
    True but that is by definition NOT dynastic wealth. Wealth is actually present throughout the society. In fact there are many forms of wealth throughout society: culture, connections, skills.
  - babesh 6y ago
    Another interesting thing is that power is often relative. The presence of the billionaires blunts the power of the multimillionaires.
chordalkeyboard 6y ago
> the problem of exceedingly wealthy people who have so much money that they can't spend it all, even with a "lavish lifestyle". The problem is not that some people have all their needs and wants met with plenty left over. The problem is that some people do not, and there are systemic and often-insurmountable difficulties in moving people from the latter category to the former.
- mrpopo 6y ago
  The problem is to move capital from where it's not useful (in the bank accounts and portfolios of ultra-wealthy) to where it's useful. A tax on consumption will have a bigger impact on less wealthy people whose income is spent towards basic needs, whereas more wealthy people hoard their capital (and profit out of it). I fail to see how a focus on consumption should be favored?
  - chordalkeyboard 6y ago
    > The problem is to move capital from where it's not useful (in the bank accounts and portfolios of ultra-wealthy) to where it's useful. Its quite useful in bank accounts because those banks make loans to businesses, which secure the loan with collateral and invest the loan in expanding their business, offering more goods and services at more competitive prices, Thereby generating more value. This is investment. > A tax on consumption will have a bigger impact on less wealthy people whose income is spent towards basic needs Perhaps so, but taxing investment also hurts less wealthy people to a greater extent, because they have less money to invest and so the investment tax makes it more difficult for them to catch up to more wealthy people by investing. > whereas more wealthy people hoard their capital (and profit out of it). This is why they are wealthy and this behavior should be emulated by the less wealthy if they wish to have more money available for consumption in the long run. > I fail to see how a focus on consumption should be favored? Because the aggregate effect of tax incentives shapes the market and investment increases the amount of value created by a given unit of labor, and the amount of value available in the market at all price levels. Incentivizing consumption (by taxing investment more than consumption) causes more people to consume more of their value. Incentivizing investment causes more people to invest more value, creating more aggregate value.

by mrpopo 6y ago

babesh 6y ago

Because the data he presents and his argument is a good one and your logic is shete. His argument is that dynastic wealth doesn’t persist in the United States. If it did, then wealth would STILL have accreted to renters even if most of the wealth was created since the 50s. Furthermore you didn’t bother reading or noticing that he is in favor of an estate tax.

fiblye 6y ago
> His argument is that dynastic wealth doesn’t persist in the United States. America doesn't really have people who've been billionaires for 7 generations. But America does have people who were born into enough money to never have to worry about finances ever, had children with the same benefit, and had grandchildren in similar circumstances. Plenty of people in politics are the son or grandson of a line of rich politicians. Plenty of comfortable millionaires got their start from a lineage of inherited wealth. It's not enough money to rank on Forbes 400 and build private castles that'll last centuries, but it's definitely wealth and status being passed down. It's safe money. Many people who became billionaires aren't there through safe, steady, risk-free financial management.
- chordalkeyboard 6y ago
  How are families preserving wealth for generations, if they aren’t engaging in safe, steady, low risk management of their wealth? Even if you ignored inflation, how much cash would someone have to accumulate in order to sustain a middle-class lifestyle for their family for multiple generations, if they weren’t investing and managing those investments?
  - babesh 6y ago
    - Investing in their kid’s education in a broad sense (attitude, career). - Marrying well i.e. marrying smart and successful people so that your progeny’s genes are the best they can be. The British aristocracy was famous for doing this. Marrying old blood to new blood. However, many cultures do the same. That is why marriage was so often a negotiated affair.
    - chordalkeyboard 6y ago
      This is true. They invest in the education and socialization of their children so their children can go get good jobs and earn big paychecks in a well-paying, low-risk industry. However that is not the same as living on accumulated wealth for generations.
      - babesh 6y ago
        True but the above compounds over time.
- babesh 6y ago
  True but that is by definition NOT dynastic wealth. Wealth is actually present throughout the society. In fact there are many forms of wealth throughout society: culture, connections, skills.
- babesh 6y ago
  Another interesting thing is that power is often relative. The presence of the billionaires blunts the power of the multimillionaires.

chordalkeyboard 6y ago

> the problem of exceedingly wealthy people who have so much money that they can't spend it all, even with a "lavish lifestyle". The problem is not that some people have all their needs and wants met with plenty left over. The problem is that some people do not, and there are systemic and often-insurmountable difficulties in moving people from the latter category to the former.

mrpopo 6y ago
The problem is to move capital from where it's not useful (in the bank accounts and portfolios of ultra-wealthy) to where it's useful. A tax on consumption will have a bigger impact on less wealthy people whose income is spent towards basic needs, whereas more wealthy people hoard their capital (and profit out of it). I fail to see how a focus on consumption should be favored?
- chordalkeyboard 6y ago
  > The problem is to move capital from where it's not useful (in the bank accounts and portfolios of ultra-wealthy) to where it's useful. Its quite useful in bank accounts because those banks make loans to businesses, which secure the loan with collateral and invest the loan in expanding their business, offering more goods and services at more competitive prices, Thereby generating more value. This is investment. > A tax on consumption will have a bigger impact on less wealthy people whose income is spent towards basic needs Perhaps so, but taxing investment also hurts less wealthy people to a greater extent, because they have less money to invest and so the investment tax makes it more difficult for them to catch up to more wealthy people by investing. > whereas more wealthy people hoard their capital (and profit out of it). This is why they are wealthy and this behavior should be emulated by the less wealthy if they wish to have more money available for consumption in the long run. > I fail to see how a focus on consumption should be favored? Because the aggregate effect of tax incentives shapes the market and investment increases the amount of value created by a given unit of labor, and the amount of value available in the market at all price levels. Incentivizing consumption (by taxing investment more than consumption) causes more people to consume more of their value. Incentivizing investment causes more people to invest more value, creating more aggregate value.