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Why do people believe there's a conspiracy to keep poor people poor? From an economic standpoint, rich business owners want there to be more wealthy consumers

Why do people believe there's a conspiracy to keep poor people poor? From an economic standpoint, rich business owners want there to be more wealthy consumers in the world, because that means more customers. You don't see Whole Foods expanding to as many poor neighborhoods as rich ones, because there isn't enough money there to buy. From a social and cultural standpoint, rich people with expensive tastes prefer to spend their time in upscale environments. They aren't happy that so many places are impoverished. Source: I know a lot of rich people.

jerojero 4y ago
If everyone is a software developer then who will be cleaning the toilets? There isn't a conspiracy to keep people poor, it's simply a reality derived from market mechanics applied to labour. If people in South East Asian countries were paid the same wages people in Europe are paid to do the same tasks (though, to be fair, few people in Europe do these tasks precisely because of it) then everything would be outrageously expensive. From a social and economic stand point, rich people like to spend their time in upscale environments where the most onerous jobs are done by underpaid workers. Let's be honest, how much money would you charge to be cleaning toilets? You might think this is a job anyone can do, but in reality, it is a job most people really, really don't want to do. They don't want to do it so badly they will spend their wholes lives using every ounce of privilege they have to avoid being put in such a situation. Our whole economic system is built on top of this idea that some people are so poor they will do anything for a little bit of money. Source: I live in the real world.
- csallen 4y ago
  That's not how markets work. People will still clean the toilets, but the supply of toilet cleaners will fall, while demand stays the same or even increases, meaning that prices will increase. The result is not that nobody will clean toilets. It's that those who do will be paid more. (And other effects: There will be increased demand for technological alternatives to hiring toilet cleaners and innovation in that area, for example. Or alternatives to toilets might become more popular. Etc.) You are correct, things will become more expensive. But so what? It doesn't really matter, because everyone in this hypothetical society is wealthier. For example, the price of hiring a janitor in San Francisco is outrageously expensive compared to hiring someone to clean in, say, a poor township in South Africa. But the people in SF are wealthier, so it doesn't matter. And the janitors are wealthier, too: They make $40k/year in SF, $4.5k/year in Cape Town. Similarly, the average janitor in SF possesses much more wealth not only than their counterpart in South Africa, but also more than almost anyone living 100 years ago. Because society has created more wealth. Your model of how things work is subtly based on the fixed pie fallacy, which assumes that total wealth cannot increase, and that if there are gains in one area, there must be tradeoffs elsewhere. Which is not true. Rich people don't have strong incentives to keep poor people poor.
  - jerojero 4y ago
    I'm not really saying people aren't better off than they were 100 years ago. Of course they are! If we look at education and health indicators a baby born today is on average much more likely to live to old age compared to 100 years ago. Things are better. Let me make that clear. But it is also very easy to dismiss inequality that does exist. Society has created more wealth and a significant part of it has gone to developing nations but reality is that most of that wealth has concentrated and continues to concentrate in developed nations. There is always a push for more equality, it used to be the case that only rich people could live to old age and now a lot more people can do that. It used to be the case that only rich people could read and now 85% of the world can read. But... take a look at the things you interact with in a daily basis and trace back the labour that was put in them. Remember the scandal about apple using child labour to build iPhones 10 or so years ago? And what's the situation now. How much of our goods come from extremely underpaid people. Yes the cost of living is less but thats not all, living conditions in those countries are much worse than our developed nations, working conditions are awful. Society has created more wealth that's for sure, but we (in developed nations) could be a little less comfortable and trade some of that for a more equitable distribution of power and money. But in reality. We don't do that, not even in our nations... Well not in the USA anyway. If you look at statistics about different racial groups in America there is a clear division on who is doing which jobs. I guess maybe I ought to rephrase things a little bit. It's not that rich people want to keep poor people poor it's that they want to keep them significantly less wealthy than they are. Like it or not, no one wants to do janitorial work, and we don't want to pay janitors a lot of money. Why? Because our society is structured in such a way where what we value the most is kind of hyper intellectual specialised labour that not many people can do. I.e. we value rarity more than we value onerousness. And that's a choice. Europeans are much more equitable in that regard, and for sure a lot of their engineers end up working in the USA. But overall their society seems to be much more comfortable for the median family. These are choices we make as societies. Also, doesnt California have some of the highest percentages of homelessness in the USA anyway? Though this is a multi faceted problem, a big thing is that those 40k that the janitor might earn is still not enough to live comfortably in such a city with such huge disparity of incomes. For every engineer that lives their regular life, there are probably hundreds of people that are required to sustain that mode of life. But does the engineer produce enough value to offset that? I don't think so, for one, we ought to think of the climate change impact of living such lives. I think I can summarise my position as this: although we have progressed a lot and we are capable of producing a lot of very specialised wealth. This comes at a societal and natural cost that we can't really afford. Just because we can doesn't mean we should, I believe we ought to scale down and have everyone be lifted more equitable. Everyone wants everyone to be rich, but that's not possible considering the cost of "being rich" in modern times. And the decision we've made is instead of lowering the bar of what it means to be rich we have a big spread where some people at the top are extremely wealthy (and this goes for entire countries) and the others on the bottom are not. We are progressing, yes, but some of us have progressed incredibly faster than others. And I will say, we have done so at their expense in most cases.
PebblesHD 4y ago
I share your groups belief that a thriving economy needs all groups to have enough liquid currency to enable consumption, but the evidence from the Australian business community suggests that in fact no, businesses will do everything possible not to pay their staff enough to consume and will still be surprised when consumer spending plummets. Even our ‘financial press’ seems to miss the point that without consumption the economy stops when they argue constantly against increases to minimum wages or that the ever widening chasm between employee and executive compensation is both ok and desirable.
- csallen 4y ago
  Companies wanting to pay lower wages makes sense and is a real thing. But it's not due to a desire to keep people poor. Rather, the motivation there is identical to customers who bargain shop for cheap deals: a simple desire to save money. Here's perhaps a better way to look at it: Anyone accepting money is a business, anyone paying money is a customer. If I "hire" you as your "employer" and give you a "salary" to be my "employee" and do your "job," the reality is you're the business and I"m the customer. Employer really means customer, employee really means business, hire really means buy, salary really means price, and job really means product/service. And just like every customer/business relationship, the business wants to charge more, the customer wants to pay less, and neither party is much concerned with the downstream effects on the economy. Everyone just wants to save.
  - PebblesHD 4y ago
    I absolutely agree its not some conspiracy to keep people poor, more of a comment on the shortsightedness of the business community with regards to where their income comes from. I read the GP comment as businesses in general act in their best interests by introducing money into the economy by hiring staff etc. but I contend that in our smaller local industry, instead businesses have done everything from actual wage theft to consistently arguing against all forms of remuneration increases for staff against a backdrop of increasing rents, skyrocketing house prices, and significant inflation backed up by our financial press pronouncing that any extra money going to workers would crash the economy and have still been caught surprised that people don’t have money to spend.

jerojero 4y ago

If everyone is a software developer then who will be cleaning the toilets? There isn't a conspiracy to keep people poor, it's simply a reality derived from market mechanics applied to labour. If people in South East Asian countries were paid the same wages people in Europe are paid to do the same tasks (though, to be fair, few people in Europe do these tasks precisely because of it) then everything would be outrageously expensive. From a social and economic stand point, rich people like to spend their time in upscale environments where the most onerous jobs are done by underpaid workers. Let's be honest, how much money would you charge to be cleaning toilets? You might think this is a job anyone can do, but in reality, it is a job most people really, really don't want to do. They don't want to do it so badly they will spend their wholes lives using every ounce of privilege they have to avoid being put in such a situation. Our whole economic system is built on top of this idea that some people are so poor they will do anything for a little bit of money. Source: I live in the real world.

csallen 4y ago
That's not how markets work. People will still clean the toilets, but the supply of toilet cleaners will fall, while demand stays the same or even increases, meaning that prices will increase. The result is not that nobody will clean toilets. It's that those who do will be paid more. (And other effects: There will be increased demand for technological alternatives to hiring toilet cleaners and innovation in that area, for example. Or alternatives to toilets might become more popular. Etc.) You are correct, things will become more expensive. But so what? It doesn't really matter, because everyone in this hypothetical society is wealthier. For example, the price of hiring a janitor in San Francisco is outrageously expensive compared to hiring someone to clean in, say, a poor township in South Africa. But the people in SF are wealthier, so it doesn't matter. And the janitors are wealthier, too: They make $40k/year in SF, $4.5k/year in Cape Town. Similarly, the average janitor in SF possesses much more wealth not only than their counterpart in South Africa, but also more than almost anyone living 100 years ago. Because society has created more wealth. Your model of how things work is subtly based on the fixed pie fallacy, which assumes that total wealth cannot increase, and that if there are gains in one area, there must be tradeoffs elsewhere. Which is not true. Rich people don't have strong incentives to keep poor people poor.
- jerojero 4y ago
  I'm not really saying people aren't better off than they were 100 years ago. Of course they are! If we look at education and health indicators a baby born today is on average much more likely to live to old age compared to 100 years ago. Things are better. Let me make that clear. But it is also very easy to dismiss inequality that does exist. Society has created more wealth and a significant part of it has gone to developing nations but reality is that most of that wealth has concentrated and continues to concentrate in developed nations. There is always a push for more equality, it used to be the case that only rich people could live to old age and now a lot more people can do that. It used to be the case that only rich people could read and now 85% of the world can read. But... take a look at the things you interact with in a daily basis and trace back the labour that was put in them. Remember the scandal about apple using child labour to build iPhones 10 or so years ago? And what's the situation now. How much of our goods come from extremely underpaid people. Yes the cost of living is less but thats not all, living conditions in those countries are much worse than our developed nations, working conditions are awful. Society has created more wealth that's for sure, but we (in developed nations) could be a little less comfortable and trade some of that for a more equitable distribution of power and money. But in reality. We don't do that, not even in our nations... Well not in the USA anyway. If you look at statistics about different racial groups in America there is a clear division on who is doing which jobs. I guess maybe I ought to rephrase things a little bit. It's not that rich people want to keep poor people poor it's that they want to keep them significantly less wealthy than they are. Like it or not, no one wants to do janitorial work, and we don't want to pay janitors a lot of money. Why? Because our society is structured in such a way where what we value the most is kind of hyper intellectual specialised labour that not many people can do. I.e. we value rarity more than we value onerousness. And that's a choice. Europeans are much more equitable in that regard, and for sure a lot of their engineers end up working in the USA. But overall their society seems to be much more comfortable for the median family. These are choices we make as societies. Also, doesnt California have some of the highest percentages of homelessness in the USA anyway? Though this is a multi faceted problem, a big thing is that those 40k that the janitor might earn is still not enough to live comfortably in such a city with such huge disparity of incomes. For every engineer that lives their regular life, there are probably hundreds of people that are required to sustain that mode of life. But does the engineer produce enough value to offset that? I don't think so, for one, we ought to think of the climate change impact of living such lives. I think I can summarise my position as this: although we have progressed a lot and we are capable of producing a lot of very specialised wealth. This comes at a societal and natural cost that we can't really afford. Just because we can doesn't mean we should, I believe we ought to scale down and have everyone be lifted more equitable. Everyone wants everyone to be rich, but that's not possible considering the cost of "being rich" in modern times. And the decision we've made is instead of lowering the bar of what it means to be rich we have a big spread where some people at the top are extremely wealthy (and this goes for entire countries) and the others on the bottom are not. We are progressing, yes, but some of us have progressed incredibly faster than others. And I will say, we have done so at their expense in most cases.

PebblesHD 4y ago

I share your groups belief that a thriving economy needs all groups to have enough liquid currency to enable consumption, but the evidence from the Australian business community suggests that in fact no, businesses will do everything possible not to pay their staff enough to consume and will still be surprised when consumer spending plummets. Even our ‘financial press’ seems to miss the point that without consumption the economy stops when they argue constantly against increases to minimum wages or that the ever widening chasm between employee and executive compensation is both ok and desirable.

csallen 4y ago
Companies wanting to pay lower wages makes sense and is a real thing. But it's not due to a desire to keep people poor. Rather, the motivation there is identical to customers who bargain shop for cheap deals: a simple desire to save money. Here's perhaps a better way to look at it: Anyone accepting money is a business, anyone paying money is a customer. If I "hire" you as your "employer" and give you a "salary" to be my "employee" and do your "job," the reality is you're the business and I"m the customer. Employer really means customer, employee really means business, hire really means buy, salary really means price, and job really means product/service. And just like every customer/business relationship, the business wants to charge more, the customer wants to pay less, and neither party is much concerned with the downstream effects on the economy. Everyone just wants to save.
- PebblesHD 4y ago
  I absolutely agree its not some conspiracy to keep people poor, more of a comment on the shortsightedness of the business community with regards to where their income comes from. I read the GP comment as businesses in general act in their best interests by introducing money into the economy by hiring staff etc. but I contend that in our smaller local industry, instead businesses have done everything from actual wage theft to consistently arguing against all forms of remuneration increases for staff against a backdrop of increasing rents, skyrocketing house prices, and significant inflation backed up by our financial press pronouncing that any extra money going to workers would crash the economy and have still been caught surprised that people don’t have money to spend.