4 ms·

> doesn’t really match the evidence Here's some data: https://www.pewsocialtrends.org/2020/01/09/trends-in-income-and-wealth-inequality/ https://www.pewsocial

by lisper 6y ago

> doesn’t really match the evidence Here's some data: https://www.pewsocialtrends.org/2020/01/09/trends-in-income-and-wealth-inequality/ https://www.pewsocialtrends.org/2020/01/09/trends-in-income-... Something is driving down wealth at the low end while driving it up at the high end. It seems unlikely in the extreme that this a reflection of actual value produced by people at the high end relative to those at the low end. Much more likely is that this is a reflection of some kind of structural problem in the system that is being perpetuated by the people at the high end using the political power that being at the high end affords them. Whether those people are "bankers" or are better described by some other label is kind of irrelevant. It's the overall dynamic that matters.

an_opabinia 6y ago
You could just punch income inequality into Google Scholar or Google Books and learn at least 100 ways capital concentration or poverty is perpetuated, via the natural experiments of many rich western countries and US states.
- robertlagrant 6y ago
  Don't read too much into this analogy, but if I search for Flat Earth I'll get a load of stuff that talks about how the Earth is flat, and not much else. For example, you may not get the following explanation much, even though it requires no conspiracies and explains the outcomes: income is disproportionate because risk and capital are more important to a business' success than any particular individual's labour, and so they are correspondingly rewarded more as well.
  - an_opabinia 6y ago
    Okay, but the way governments perpetuate income inequality isn't at all fake like Flat Earth conspiracies.
    - robertlagrant 6y ago
      Even if all bias were removed from life, any free meritocracy would still perpetuate it. People can choose to make less, and some people can't add as much value as others.
HALtheWise 6y ago
I wouldn't dismiss so quickly that it's impossible for some people to create orders of magnitude more value than others, or for that distribution to change dramatically with time. In farming, for example, increased mechanization has allowed a ~100x increase in per-worker production, and unless literally every other occupation had the same change over the same time period, that should lead to dramatic productivity differences. The real difficulty is in deciding who "gets credit" for producing a given thing. Is the person driving the tractor really more productive, or is the tractor itself responsible for producing most of the value (return on capital)? Maybe the bank that provided the loan for the tractor is creating value? Without any of those components, the food wouldn't be grown, so there's not an obvious way to divide it into the sum of individual contributions.
- lisper 6y ago
  > The real difficulty is in deciding who "gets credit" for producing a given thing. Exactly. The situation we currently have is that the people who are getting the most "credit" as you put it are by and large the same small group of people who make the rules for who gets the credit. "Bankers" is a convenient popular label for those people even though most of them don't actually work at banks.
  - deleted 6y ago
    [deleted]
- spamizbad 6y ago
  I am reminded of Sagan's standard "Extraordinary claims require extraordinary evidence" Has been there been any detailed breakdown of how much more effective the median CEO in 2020 is over the median executive in 1970? I am certain they are doing things better, have more data, etc but what scale are we really looking at here? Because, just thinking out loud here, the bulk of the workforce in the United States is more educated and has more hard skills than their predecessors did in 1970s. Firms demanded technology skills, for which they provided little or no training, and their workforce was able to acquire the necessary skills.. and yet the "upside" was nothing more than possibly being able to keep their job.
throwaway09223 6y ago
I think it is more accurate to say that wealth growth at the low end is not as rapid as wealth growth at the high end. Nothing is driving wealth down. Wealth is increasing for everyone, generally speaking. This observation is important because it recognizes that wealth is created, not allocated. This is not a zero-sum game. You say it seems unlikely that actual value is increasing at the high end but I do not think this opinion holds up to scrutiny. I think it is very likely that value at the high end has increased by multiples -- white collar jobs have become vastly more productive with the introduction of technology. Correspondingly, low value work has not. In fact, many of our most common low value jobs (retail, driving) risk going the way of the switchboard operator. There was no conspiracy to devalue the work of the switchboard operator; rather, so called "high value" tech jobs made this type of lower value work entirely obsolete. I think it is unsurprising that high end work is rising in relative value while low end work is falling. I don't see any basis for imagining political or economic conspiracies: What we see in terms of value is exactly what we ought to expect.
- lisper 6y ago
  > Wealth is increasing for everyone, generally speaking That depends a lot on how you count. See: https://fred.stlouisfed.org/series/WFRBLB50107 https://fred.stlouisfed.org/series/WFRBLB50107 The average net worth of the bottom 50% over the last 30 years is about the same as it was 30 years ago. Compare to: https://fred.stlouisfed.org/series/WFRBLT01026 https://fred.stlouisfed.org/series/WFRBLT01026 and note that the net worth of the top 1% has been increasing more or less monotonically for the last 30 years, with only a very small dip in 2008-2012. The bottom 50% take a much bigger share of the losses and a much smaller share of the gains. Over the last 30 years the bottom 50% has barely broken even.
  - pdonis 6y ago
    These charts aren't showing wealth, they're showing money. Money is not wealth. For example, suppose you have a car that you paid $20K in cash for this year. That works out to about $10K 30 years ago (I think the Fed charts you showed are in inflation-adjusted dollars, though they don't say so). So as far as monetary vaue is concerned, you have the same net worth in your $20K car today as a person 30 years ago would have in a car that cost $10K then. (Or even a car that cost $20K then, if we aren't adjusting cost for inflation.) Having owned cars over this entire time period, however, I can tell you that the wealth contained in that $20K car today is quite a bit greater than the wealth contained in a car that cost $10K 30 years ago. A $20K car today will be more reliable, get better gas mileage and give better average performance, have numerous safety features that didn't even exist 30 years ago, and have more bells and whistles in general. So in terms of wealth, I'm quite a bit more wealthy with $20K worth of car today than a person 30 years ago would be with the same inflation-adjusted monetary value of car. And cars are actually a pretty poor example as compared with, say, computers or phones.
lazulicurio 6y ago
To quote myself: > Although the economy is a complex system and it's dangerous to try to over-simplify, my personal opinion is that there are two main and intertwined causes: 1) the cost to participate in the US court system. 2) the abuse of copyright, patent, trademark, and contract[1] law to divorce workers from their experience and treat employee knowledge as company property. The time and money involved in both pursuing and defending court cases favors larger entities with armies of lawyers and large war chests. Intellectual "property" cases take especially vast amounts of resources because of the fuzziness involved. Meanwhile, treating workers as fungible producers of ideas that can be bought and sold both reduces the bargaining power of individual workers while empowering companies that can amass large portfolios of patents, etc. to use in litigation. Not sure about reforms for the court system, but patent and copyright reform, combined with restrictions on unfair employment contracts, would go a long way to improving the situation. [1] NDAs, NCAs, etc.

by lisper 6y ago

an_opabinia 6y ago

You could just punch income inequality into Google Scholar or Google Books and learn at least 100 ways capital concentration or poverty is perpetuated, via the natural experiments of many rich western countries and US states.

robertlagrant 6y ago
Don't read too much into this analogy, but if I search for Flat Earth I'll get a load of stuff that talks about how the Earth is flat, and not much else. For example, you may not get the following explanation much, even though it requires no conspiracies and explains the outcomes: income is disproportionate because risk and capital are more important to a business' success than any particular individual's labour, and so they are correspondingly rewarded more as well.
- an_opabinia 6y ago
  Okay, but the way governments perpetuate income inequality isn't at all fake like Flat Earth conspiracies.
  - robertlagrant 6y ago
    Even if all bias were removed from life, any free meritocracy would still perpetuate it. People can choose to make less, and some people can't add as much value as others.

HALtheWise 6y ago

I wouldn't dismiss so quickly that it's impossible for some people to create orders of magnitude more value than others, or for that distribution to change dramatically with time. In farming, for example, increased mechanization has allowed a ~100x increase in per-worker production, and unless literally every other occupation had the same change over the same time period, that should lead to dramatic productivity differences. The real difficulty is in deciding who "gets credit" for producing a given thing. Is the person driving the tractor really more productive, or is the tractor itself responsible for producing most of the value (return on capital)? Maybe the bank that provided the loan for the tractor is creating value? Without any of those components, the food wouldn't be grown, so there's not an obvious way to divide it into the sum of individual contributions.

lisper 6y ago
> The real difficulty is in deciding who "gets credit" for producing a given thing. Exactly. The situation we currently have is that the people who are getting the most "credit" as you put it are by and large the same small group of people who make the rules for who gets the credit. "Bankers" is a convenient popular label for those people even though most of them don't actually work at banks.
- deleted 6y ago
  [deleted]
spamizbad 6y ago
I am reminded of Sagan's standard "Extraordinary claims require extraordinary evidence" Has been there been any detailed breakdown of how much more effective the median CEO in 2020 is over the median executive in 1970? I am certain they are doing things better, have more data, etc but what scale are we really looking at here? Because, just thinking out loud here, the bulk of the workforce in the United States is more educated and has more hard skills than their predecessors did in 1970s. Firms demanded technology skills, for which they provided little or no training, and their workforce was able to acquire the necessary skills.. and yet the "upside" was nothing more than possibly being able to keep their job.

throwaway09223 6y ago

I think it is more accurate to say that wealth growth at the low end is not as rapid as wealth growth at the high end. Nothing is driving wealth down. Wealth is increasing for everyone, generally speaking. This observation is important because it recognizes that wealth is created, not allocated. This is not a zero-sum game. You say it seems unlikely that actual value is increasing at the high end but I do not think this opinion holds up to scrutiny. I think it is very likely that value at the high end has increased by multiples -- white collar jobs have become vastly more productive with the introduction of technology. Correspondingly, low value work has not. In fact, many of our most common low value jobs (retail, driving) risk going the way of the switchboard operator. There was no conspiracy to devalue the work of the switchboard operator; rather, so called "high value" tech jobs made this type of lower value work entirely obsolete. I think it is unsurprising that high end work is rising in relative value while low end work is falling. I don't see any basis for imagining political or economic conspiracies: What we see in terms of value is exactly what we ought to expect.

lisper 6y ago
> Wealth is increasing for everyone, generally speaking That depends a lot on how you count. See: https://fred.stlouisfed.org/series/WFRBLB50107 https://fred.stlouisfed.org/series/WFRBLB50107 The average net worth of the bottom 50% over the last 30 years is about the same as it was 30 years ago. Compare to: https://fred.stlouisfed.org/series/WFRBLT01026 https://fred.stlouisfed.org/series/WFRBLT01026 and note that the net worth of the top 1% has been increasing more or less monotonically for the last 30 years, with only a very small dip in 2008-2012. The bottom 50% take a much bigger share of the losses and a much smaller share of the gains. Over the last 30 years the bottom 50% has barely broken even.
- pdonis 6y ago
  These charts aren't showing wealth, they're showing money. Money is not wealth. For example, suppose you have a car that you paid $20K in cash for this year. That works out to about $10K 30 years ago (I think the Fed charts you showed are in inflation-adjusted dollars, though they don't say so). So as far as monetary vaue is concerned, you have the same net worth in your $20K car today as a person 30 years ago would have in a car that cost $10K then. (Or even a car that cost $20K then, if we aren't adjusting cost for inflation.) Having owned cars over this entire time period, however, I can tell you that the wealth contained in that $20K car today is quite a bit greater than the wealth contained in a car that cost $10K 30 years ago. A $20K car today will be more reliable, get better gas mileage and give better average performance, have numerous safety features that didn't even exist 30 years ago, and have more bells and whistles in general. So in terms of wealth, I'm quite a bit more wealthy with $20K worth of car today than a person 30 years ago would be with the same inflation-adjusted monetary value of car. And cars are actually a pretty poor example as compared with, say, computers or phones.

lazulicurio 6y ago

To quote myself: > Although the economy is a complex system and it's dangerous to try to over-simplify, my personal opinion is that there are two main and intertwined causes: 1) the cost to participate in the US court system. 2) the abuse of copyright, patent, trademark, and contract[1] law to divorce workers from their experience and treat employee knowledge as company property. The time and money involved in both pursuing and defending court cases favors larger entities with armies of lawyers and large war chests. Intellectual "property" cases take especially vast amounts of resources because of the fuzziness involved. Meanwhile, treating workers as fungible producers of ideas that can be bought and sold both reduces the bargaining power of individual workers while empowering companies that can amass large portfolios of patents, etc. to use in litigation. Not sure about reforms for the court system, but patent and copyright reform, combined with restrictions on unfair employment contracts, would go a long way to improving the situation. [1] NDAs, NCAs, etc.