6 ms·

Inequality is only bad inasmuch as populists use it to rile people up. Let's say I have $100 and you have $50. Then someone gives me another $100 and gives yo

by endtime 15y ago

Inequality is only bad inasmuch as populists use it to rile people up. Let's say I have $100 and you have $50. Then someone gives me another $100 and gives you $5. Inequality has increased, but is the situation worse? Is anyone worse off?

gridspy 15y ago
If that happens to everyone in the marketplace, then inflation just occurred. The market had a total of $100 + $50 and now has a total of $150 + $105. The cash in the market increased by 58% so all the price of all goods will also increase by 58%. This means that the money I have is now worth less than before, and I am now poorer than before.
- jarek 15y ago
  Actually the hypothetical actors will have $200 and $55 respectively. To reinforce your point, if price of goods does go up 58%, the actor that started out with $50 will be 30% poorer in real terms (now having $55 and his $50 basket of goods now costing $79), whereas the actor that started out with $100 will be 26% richer (now having $200 and his $100 basket of goods now costing $158).
- endtime 15y ago
  Okay, I oversimplified - but you are doing so as well. Societies as a whole can become wealthier over time. The difference between the 90th percentile and the 10th might be higher today than it was 200 years ago, but the 10th percentile today is also probably better off than the 90th 200 years ago in absolute terms. Edit: s/dollars/utilons/g
  - gridspy 15y ago
    Yes, it is true that we are all much better off than we were 200 years ago. This is due to both economic and technical progress. For instance, I can light and heat my house economically. However, the 90th percentile might be even better off today if there was more equality - we could more efficiently share the fruits of our technical progress. PG makes an effective argument that such equality would reduce the benefit and thus the motivation to innovate and create the present level of comfort / economic success : http://www.paulgraham.com/inequality.html http://www.paulgraham.com/inequality.html Overall, equality is a complex beast. I think that we need some level of inequality to ensure that there is sufficient motivation to succeed. We also need to do our best to help those who 'fall behind'
    - endtime 15y ago
      As far as I can tell from skimming it, pg is arguing against optimizing for economic equality in that article.
- gcanyon 15y ago
  Certainly true given the analogy as stated, but if the overall quality/quantity of goods available has gone up by a factor of 3, then both are better off than before.

by endtime 15y ago

gridspy 15y ago

If that happens to everyone in the marketplace, then inflation just occurred. The market had a total of $100 + $50 and now has a total of $150 + $105. The cash in the market increased by 58% so all the price of all goods will also increase by 58%. This means that the money I have is now worth less than before, and I am now poorer than before.

jarek 15y ago
Actually the hypothetical actors will have $200 and $55 respectively. To reinforce your point, if price of goods does go up 58%, the actor that started out with $50 will be 30% poorer in real terms (now having $55 and his $50 basket of goods now costing $79), whereas the actor that started out with $100 will be 26% richer (now having $200 and his $100 basket of goods now costing $158).
endtime 15y ago
Okay, I oversimplified - but you are doing so as well. Societies as a whole can become wealthier over time. The difference between the 90th percentile and the 10th might be higher today than it was 200 years ago, but the 10th percentile today is also probably better off than the 90th 200 years ago in absolute terms. Edit: s/dollars/utilons/g
- gridspy 15y ago
  Yes, it is true that we are all much better off than we were 200 years ago. This is due to both economic and technical progress. For instance, I can light and heat my house economically. However, the 90th percentile might be even better off today if there was more equality - we could more efficiently share the fruits of our technical progress. PG makes an effective argument that such equality would reduce the benefit and thus the motivation to innovate and create the present level of comfort / economic success : http://www.paulgraham.com/inequality.html http://www.paulgraham.com/inequality.html Overall, equality is a complex beast. I think that we need some level of inequality to ensure that there is sufficient motivation to succeed. We also need to do our best to help those who 'fall behind'
  - endtime 15y ago
    As far as I can tell from skimming it, pg is arguing against optimizing for economic equality in that article.
gcanyon 15y ago
Certainly true given the analogy as stated, but if the overall quality/quantity of goods available has gone up by a factor of 3, then both are better off than before.