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Interesting idea though it needs some refinement. What makes one job aid wealth concentration while another one is merely just increases returns on capital ? Al

Interesting idea though it needs some refinement. What makes one job aid wealth concentration while another one is merely just increases returns on capital ? All jobs make capital owners wealthier. Returns on capital in the long term grow quicker than wages even though labor is an essential component.

freeone3000 6y ago
Capitalism inherently creates income inequality, as labor will forever be paid less than capital accumulation, while having less opportunity to accumulate capital themselves. There is an inherent inequality in allowing wealth to create more wealth, while labor cannot create the same wealth.
- ClumsyPilot 6y ago
  If that were true, the system would be unstaible. As inequality tends towards infinity, something's gonna break.
  - username90 6y ago
    Only if the inequality isn't warranted. If it is backed by by armed autonomous drones or other ways to efficiently project power without needing lots of people then there is no reason it wouldn't be stable.
    - ClumsyPilot 6y ago
      I sincerely doubt that is on the cards. You can have a dictatorship, but you will still need people / your crownies. The day the drones are smart enough that they don't need anyone to maintain them and adjust them, maybe they start getting ideas about that one meatbag in charge of them.
  - mhh__ 6y ago
    The answer is that there is an inherent tradeoff between Risk and potential growth, i.e. amongst the "initiated" (like people engaged in active debate over these matters) the people who just want a simple life and a job are vastly underrepresented.
    - sudosysgen 6y ago
      This isn't accurate at all. The people that have the capital to actually be able to achieve financial independence have much less marginal utility downside from an equal amount of risk than the average people that have a simple life and a job. For many people, taking that kind of risk can have vastly outsized impacts. Risk labour is simply a convenient myth.
      - thewarrior 6y ago
        No you see actually the billionaire investing 10 million of his own money is taking a really big risk. This needs to be rewarded. Unlike the wage earner who loses his house and health insurance the moment he is fired ....
  - freeone3000 6y ago
    The system is unstable. When inequality has reached sufficient levels, there's traditionally been a "hard reset" (France, Venezuela, Cuba...), with wealth being redistributed by force. The United States currently has the highest wealth inequality seen in a democracy. It likely won't remain a democracy much longer.
    - notJim 6y ago
      I think US democracy will survive, but it's surely not a coincidence that we're seeing more extreme, and potentially destabilizing ideas gain ground on both the right and the left amid widening inequality.
jeffreyrogers 6y ago
I'm not sure that returns on capital always grow quicker than wages. It depends on how things are structured, right? If labor has more power than more of the gains go to labor. We're currently in an environment where labor has very little power.
- david-gpu 6y ago
  > I'm not sure that returns on capital always grow quicker than wages Suggested reading: "Capital in the 21st century" by Piketty. He presents data and arguments for why this is a major trend in capitalism, and suggests a progressive wealth tax to ameliorate this. Note that I'm not advocating for or against it.
  - username90 6y ago
    Before software there was a limit to how much infrastructure could be built. There is no point in building more factories than you have workers for etc, but with software we can continue building software infrastructure more or less forever which makes wealth limitless.
JMTQp8lwXL 6y ago
It should be noted that Piketty walked back a lot of his thesis surrounding the rate of return on capital (r) being greater than the rate of economic growth (g). Or, to be more terse, r > g. As a framework, it's stretching its usefulness when applied to inequality in labor markets, and that would include bimodal compensation of developers. https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
- mhh__ 6y ago
  I'm basically just a mathematically competent but economically dumb observer, so I can't weigh in myself, but there is generally a huge amount of debate over Piketty's work in the economics community. I've had the book recommended to me several times by "I'm happy to pay more taxes"-types as a one-stop shop for societal ills, but it's not that simple. The seeming lack of attention on land and other rentseeking also puzzles me.
- thewarrior 6y ago
  I don’t know about r > g but stock owners have made more money in the pandemic while actual people are starving. That’s evidence enough. The system is rigged to make house owners, stock owners etc richer as they have power. Wages don’t keep up with productivity.

freeone3000 6y ago

Capitalism inherently creates income inequality, as labor will forever be paid less than capital accumulation, while having less opportunity to accumulate capital themselves. There is an inherent inequality in allowing wealth to create more wealth, while labor cannot create the same wealth.

ClumsyPilot 6y ago
If that were true, the system would be unstaible. As inequality tends towards infinity, something's gonna break.
- username90 6y ago
  Only if the inequality isn't warranted. If it is backed by by armed autonomous drones or other ways to efficiently project power without needing lots of people then there is no reason it wouldn't be stable.
  - ClumsyPilot 6y ago
    I sincerely doubt that is on the cards. You can have a dictatorship, but you will still need people / your crownies. The day the drones are smart enough that they don't need anyone to maintain them and adjust them, maybe they start getting ideas about that one meatbag in charge of them.
- mhh__ 6y ago
  The answer is that there is an inherent tradeoff between Risk and potential growth, i.e. amongst the "initiated" (like people engaged in active debate over these matters) the people who just want a simple life and a job are vastly underrepresented.
  - sudosysgen 6y ago
    This isn't accurate at all. The people that have the capital to actually be able to achieve financial independence have much less marginal utility downside from an equal amount of risk than the average people that have a simple life and a job. For many people, taking that kind of risk can have vastly outsized impacts. Risk labour is simply a convenient myth.
    - thewarrior 6y ago
      No you see actually the billionaire investing 10 million of his own money is taking a really big risk. This needs to be rewarded. Unlike the wage earner who loses his house and health insurance the moment he is fired ....
- freeone3000 6y ago
  The system is unstable. When inequality has reached sufficient levels, there's traditionally been a "hard reset" (France, Venezuela, Cuba...), with wealth being redistributed by force. The United States currently has the highest wealth inequality seen in a democracy. It likely won't remain a democracy much longer.
  - notJim 6y ago
    I think US democracy will survive, but it's surely not a coincidence that we're seeing more extreme, and potentially destabilizing ideas gain ground on both the right and the left amid widening inequality.

jeffreyrogers 6y ago

I'm not sure that returns on capital always grow quicker than wages. It depends on how things are structured, right? If labor has more power than more of the gains go to labor. We're currently in an environment where labor has very little power.

david-gpu 6y ago
> I'm not sure that returns on capital always grow quicker than wages Suggested reading: "Capital in the 21st century" by Piketty. He presents data and arguments for why this is a major trend in capitalism, and suggests a progressive wealth tax to ameliorate this. Note that I'm not advocating for or against it.
- username90 6y ago
  Before software there was a limit to how much infrastructure could be built. There is no point in building more factories than you have workers for etc, but with software we can continue building software infrastructure more or less forever which makes wealth limitless.

JMTQp8lwXL 6y ago

It should be noted that Piketty walked back a lot of his thesis surrounding the rate of return on capital (r) being greater than the rate of economic growth (g). Or, to be more terse, r > g. As a framework, it's stretching its usefulness when applied to inequality in labor markets, and that would include bimodal compensation of developers. https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...

mhh__ 6y ago
I'm basically just a mathematically competent but economically dumb observer, so I can't weigh in myself, but there is generally a huge amount of debate over Piketty's work in the economics community. I've had the book recommended to me several times by "I'm happy to pay more taxes"-types as a one-stop shop for societal ills, but it's not that simple. The seeming lack of attention on land and other rentseeking also puzzles me.
thewarrior 6y ago
I don’t know about r > g but stock owners have made more money in the pandemic while actual people are starving. That’s evidence enough. The system is rigged to make house owners, stock owners etc richer as they have power. Wages don’t keep up with productivity.