6 ms·

This zero sum saying needs to die, it doesn't say anything useful. What you MEAN to say is that it is not zero sum when you look along the time variable (as in

by cmehdy 6y ago

This zero sum saying needs to die, it doesn't say anything useful. What you MEAN to say is that it is not zero sum when you look along the time variable (as in sum(t+1) != sum(t)), because total value is not constant over time as we value human creation in a system of human beings. However at any fixed t, the total value is a constant and the sum adds up, hence why it's called a sum in the first place. Saying that the function isn't flat doesn't give us ANY useful information about the finer distribution of wealth, studies do. And those studies keep on pointing out a world where the inequality gaps are getting wider and deeper. This is exactly back to my first comment, and somehow that was populist to point that out to you.

Aunche 6y ago
> What you MEAN to say is that it is not zero sum when you look along the time variable (as in sum(t+1) != sum(t)), I think they were saying that it's not zero-sum with respect to policy rather than time. Most ideas of wealth redistribution would have disastrous effects on the economy. There's a reason why even the most progressive countries primarily fund their social programs with income taxes and VATs rather than capital gains or wealth taxes.
- oooooooooooow 6y ago
  This is a very interesting perspective, I'd love to hear more about the disastrous effects.
  - julienb_sea 6y ago
    Pretty much every functional nation is fundamentally reliant on a healthy, competitive, tax-paying and stable private sector. In order for this to exist, you need people to trust that their capital is well protected and handled in a fair manner. "Fair", when talking about the global economic perspective, is a cost/benefit analysis taking account of your tax burden. Private investment is a way of putting your money at risk in exchange for a potential reward. Wealth redistribution at scale implies that you massively reduce or eliminate the rewards associated with your capital. This is a big problem as it drastically affects the incentives to put your money at risk (i.e. in a private company). This will absolutely tank the private economy, which, as mentioned, is the backbone of a modern country. No one will want to hold capital in your country or invest it in your country because it's going to be redistributed. This is why even the most "socialist" countries from the uninformed American perspective actually have very low wealth and corporate taxes: they recognize that encouraging the private economy is fundamental to the stable function of a modern country. (Instead, they heavily tax income, which has much less economic side effects)
    - imtringued 6y ago
      The obvious problem with your stance is that it doesn't even consider whether the investment is productive or not, just that people get richer. You don't want people to put their existing wealth into unproductive uses and still earn more money off of that than by investing it productively. Not to mention all the economic losses caused by underemployment. The idea of infinite supply side stimulus when the demand side is anemic simply makes no sense unless you love increasing wealth inequality. You need multiple tools in your toolbox.
- ClumsyPilot 6y ago
  Where on earth did you get this idea? There are multiple reputable economists advocating wealth redistribution, from mahor intitutions like Oxford https://www.oxfordmartin.ox.ac.uk/blog/reducing-wealth-inequality-through-wealth-taxes-without-compromising-economic-growth/ https://www.oxfordmartin.ox.ac.uk/blog/reducing-wealth-inequ...
  - Aunche 6y ago
    This looks like it's intended to be high level rather than practical. There isn't so much rent income such that it would offset income tax in a meaningful way.
- imtringued 6y ago
  >Most ideas of wealth redistribution would have disastrous effects on the economy. I don't see it. How does increasing capital gains taxes and decreasing dividend taxes cause disastrous effects on the economy? If anything the low capital gains taxes incentivize bubbles by making it easier to make money off of selling to a greater fool than to simply let the company earn money and pay the profit out as a dividend. Tesla's market cap is going to overtake Apple. If the value of the stock was based on (future) dividends people would stop trying to hype up the stock because it went up and instead just invest based on actual and future business activity. I consider a $100 billion market cap for Tesla to be fair but optimistic. The current market cap is just illogical. Once batteries have turned into a commodity, Tesla will no longer be able to justify its valuation.
edmundsauto 6y ago
I'm not well versed, but I don't think your assumption is accurate. At time t, the sum value of all money depends on who is holding it. It seems to me that $1M isn't the same to everyone - if I'm dying unless I get a surgery paid for by that money, its worth more to me (I am willing to pay more over time to access the money now) than to Bill Gates. Or a business. Give $1M today to the right business and it'll be worth more than if you give it to your local neighborhood MLM. While the change in value is realized over time, the net present value of the money varies depending on those future deltas. Am I way off here? What I'm trying to say is that current value is derived from future value, so the sum of money at time t is dependent on how today's money is distributed and grows in the future.
- cmehdy 6y ago
  But that's.. literally what money is. 1 dollar is a dollar to every person aware of a dollar. What you're talking about is what the PROMISE of a dollar right now in some hands can be, in which case you're not solely putting value on the dollar bill in my hand but on the value created by my person in your belief - which is where people get to disagree and think whatever they want. And be right and win big, or be wrong and lose big, and anything in between. It doesn't change the fact that whether the promise is mine or some other person's, when you give us a dollar it's a dollar to either of us. What we're making of it is the added value from human contribution at t+1 (and on and on).
dataflow 6y ago
> total value is not constant over time as we value human creation in a system of human beings > However at any fixed t, the total value is a constant This doesn't make sense. This as opposed to the total value at any fixed time t being... not a constant? What does that even mean? If f(1) = 2, then is f "constant" at 1 or not? What would a not-a-constant value for f(1) be in that case? Infinity/Dirac delta?
- cmehdy 6y ago
  If something is a function of time and no other variable, from a simplified model, it is constant at a constant time. If you've ever dealt with physics I'm sure you've encountered functions of (t,x,y,z) for one, which do not guarantee being constant for a constant value of time. That's the point I'm making: the value depends on time going forward, and the growth is the associated growth of human added value as time goes, being measured by what we use as currency.
  - dataflow 6y ago
    I don't get it (and it's not because my math is lacking). You're saying total GDP is only a function of time? Meaning there are other things one might think it may be a function of, but it actually isn't? Like what exactly? Isn't it a function of all the products and services in the world? Meaning that at any two points in time, the same products and services result in the same GDP?
    - cmehdy 6y ago
      I'm saying that when the person mentions it's not a zero sum game, their modelling the system in the simplest sense is one of a function of time. That's a model for discussion and that's fine, because obviously everything depends on everything else to a degree and we're not getting anywhere if we don't simplify reality down to models. And your "products and services" can be modelled as functions of time which leads right back to the same discussion. What I'm saying is that when we keep on using the idea that this isn't "zero-sum" we implicitly carry the mindset that "money that I have isn't money that you don't have", that "it's not because I have this money that you don't" - but at that exact instant it's mechanically the case that me having this money is the actual barrier to you having it. The "zero sum" comment is a misleading way to talk about creation of value over time, because all it hints at is the idea that money somewhere isn't money taken from elsewhere simply because new value gets created as time goes. But it doesn't give any fact about money distribution at even a fixed time and even less so as a function of time. It's not a useful saying at all, because it only states "in the simple modelling of value(t), we have value(t+1) != value(t)", that's literally ALL it states but the heavy lifting is what it tries to imply.

by cmehdy 6y ago

Aunche 6y ago

> What you MEAN to say is that it is not zero sum when you look along the time variable (as in sum(t+1) != sum(t)), I think they were saying that it's not zero-sum with respect to policy rather than time. Most ideas of wealth redistribution would have disastrous effects on the economy. There's a reason why even the most progressive countries primarily fund their social programs with income taxes and VATs rather than capital gains or wealth taxes.

oooooooooooow 6y ago
This is a very interesting perspective, I'd love to hear more about the disastrous effects.
- julienb_sea 6y ago
  Pretty much every functional nation is fundamentally reliant on a healthy, competitive, tax-paying and stable private sector. In order for this to exist, you need people to trust that their capital is well protected and handled in a fair manner. "Fair", when talking about the global economic perspective, is a cost/benefit analysis taking account of your tax burden. Private investment is a way of putting your money at risk in exchange for a potential reward. Wealth redistribution at scale implies that you massively reduce or eliminate the rewards associated with your capital. This is a big problem as it drastically affects the incentives to put your money at risk (i.e. in a private company). This will absolutely tank the private economy, which, as mentioned, is the backbone of a modern country. No one will want to hold capital in your country or invest it in your country because it's going to be redistributed. This is why even the most "socialist" countries from the uninformed American perspective actually have very low wealth and corporate taxes: they recognize that encouraging the private economy is fundamental to the stable function of a modern country. (Instead, they heavily tax income, which has much less economic side effects)
  - imtringued 6y ago
    The obvious problem with your stance is that it doesn't even consider whether the investment is productive or not, just that people get richer. You don't want people to put their existing wealth into unproductive uses and still earn more money off of that than by investing it productively. Not to mention all the economic losses caused by underemployment. The idea of infinite supply side stimulus when the demand side is anemic simply makes no sense unless you love increasing wealth inequality. You need multiple tools in your toolbox.
ClumsyPilot 6y ago
Where on earth did you get this idea? There are multiple reputable economists advocating wealth redistribution, from mahor intitutions like Oxford https://www.oxfordmartin.ox.ac.uk/blog/reducing-wealth-inequality-through-wealth-taxes-without-compromising-economic-growth/ https://www.oxfordmartin.ox.ac.uk/blog/reducing-wealth-inequ...
- Aunche 6y ago
  This looks like it's intended to be high level rather than practical. There isn't so much rent income such that it would offset income tax in a meaningful way.
imtringued 6y ago
>Most ideas of wealth redistribution would have disastrous effects on the economy. I don't see it. How does increasing capital gains taxes and decreasing dividend taxes cause disastrous effects on the economy? If anything the low capital gains taxes incentivize bubbles by making it easier to make money off of selling to a greater fool than to simply let the company earn money and pay the profit out as a dividend. Tesla's market cap is going to overtake Apple. If the value of the stock was based on (future) dividends people would stop trying to hype up the stock because it went up and instead just invest based on actual and future business activity. I consider a $100 billion market cap for Tesla to be fair but optimistic. The current market cap is just illogical. Once batteries have turned into a commodity, Tesla will no longer be able to justify its valuation.

edmundsauto 6y ago

I'm not well versed, but I don't think your assumption is accurate. At time t, the sum value of all money depends on who is holding it. It seems to me that $1M isn't the same to everyone - if I'm dying unless I get a surgery paid for by that money, its worth more to me (I am willing to pay more over time to access the money now) than to Bill Gates. Or a business. Give $1M today to the right business and it'll be worth more than if you give it to your local neighborhood MLM. While the change in value is realized over time, the net present value of the money varies depending on those future deltas. Am I way off here? What I'm trying to say is that current value is derived from future value, so the sum of money at time t is dependent on how today's money is distributed and grows in the future.

cmehdy 6y ago
But that's.. literally what money is. 1 dollar is a dollar to every person aware of a dollar. What you're talking about is what the PROMISE of a dollar right now in some hands can be, in which case you're not solely putting value on the dollar bill in my hand but on the value created by my person in your belief - which is where people get to disagree and think whatever they want. And be right and win big, or be wrong and lose big, and anything in between. It doesn't change the fact that whether the promise is mine or some other person's, when you give us a dollar it's a dollar to either of us. What we're making of it is the added value from human contribution at t+1 (and on and on).

dataflow 6y ago

> total value is not constant over time as we value human creation in a system of human beings > However at any fixed t, the total value is a constant This doesn't make sense. This as opposed to the total value at any fixed time t being... not a constant? What does that even mean? If f(1) = 2, then is f "constant" at 1 or not? What would a not-a-constant value for f(1) be in that case? Infinity/Dirac delta?

cmehdy 6y ago
If something is a function of time and no other variable, from a simplified model, it is constant at a constant time. If you've ever dealt with physics I'm sure you've encountered functions of (t,x,y,z) for one, which do not guarantee being constant for a constant value of time. That's the point I'm making: the value depends on time going forward, and the growth is the associated growth of human added value as time goes, being measured by what we use as currency.
- dataflow 6y ago
  I don't get it (and it's not because my math is lacking). You're saying total GDP is only a function of time? Meaning there are other things one might think it may be a function of, but it actually isn't? Like what exactly? Isn't it a function of all the products and services in the world? Meaning that at any two points in time, the same products and services result in the same GDP?
  - cmehdy 6y ago
    I'm saying that when the person mentions it's not a zero sum game, their modelling the system in the simplest sense is one of a function of time. That's a model for discussion and that's fine, because obviously everything depends on everything else to a degree and we're not getting anywhere if we don't simplify reality down to models. And your "products and services" can be modelled as functions of time which leads right back to the same discussion. What I'm saying is that when we keep on using the idea that this isn't "zero-sum" we implicitly carry the mindset that "money that I have isn't money that you don't have", that "it's not because I have this money that you don't" - but at that exact instant it's mechanically the case that me having this money is the actual barrier to you having it. The "zero sum" comment is a misleading way to talk about creation of value over time, because all it hints at is the idea that money somewhere isn't money taken from elsewhere simply because new value gets created as time goes. But it doesn't give any fact about money distribution at even a fixed time and even less so as a function of time. It's not a useful saying at all, because it only states "in the simple modelling of value(t), we have value(t+1) != value(t)", that's literally ALL it states but the heavy lifting is what it tries to imply.