8 ms·

> I think a lot of our current sociological problems, problems associated with wealth inequality, etc., I see where you’re coming from, but is this really the

by csa 4y ago

> I think a lot of our current sociological problems, problems associated with wealth inequality, etc., I see where you’re coming from, but is this really the main source of the inequality? Based on numbers relating to workers’ diminishing share of profits, it seems to be that the capital class has been able to take a bigger piece of the profit pie without sharing. In the past, companies have shared profits more widely due to benevolence (it happens), government edict (e.g., ww2 era), or social/political pressure (e.g., post-war boom). Fwiw, I think that the mid-20th century build up of the middle class was an anomaly (sadly), and perhaps we are just reverting to the norm in terms of capital class and worker class extremes. I see tons of super skilled folks still getting financially fucked by the capital class simply because there is no real option other than to try to attempt to become part of the capital class.

deleted 4y ago
[deleted]
xp84 4y ago
I think you and the one you're replying to are both very right. Yes, more of this money is going, instead of middle-class workers, straight to the capital class who own the "machines" that do the work people used to do. Except instead of it being a factory that makes industrial machines owned by some wealthy industrialist, the machines are things like Google and AWS and the owners are the small number of people with significant stock holdings. It's really striking though that a person graduating high school in say, 1970, could easily pick from a number of career choices even without doing college or even learning an in-demand trade, like plumbing, welding, etc. Factory work still existed and had a natural career progression that wasn't basically minimum wage, and the same went for retail. Sure, McDonalds burger flippers didn't expect then to own the restaurant in 10 years, but you could take lots of retail or clerical jobs, advance through hard work and support a family on those wages. Those are the days that are super gone and I totally agree with you both that something has changed for the worse for everyone who's not already wealthy.
- mbgerring 4y ago
  You can still do that with plumbing and welding
  - xp84 4y ago
    Sorry, my phrasing was bad. Totally agree, even today trades are still AMAZING for this. I meant even if you were to set aside the trades, 50 years ago there was plenty of stuff you could at least support a family on without even that level of specialized skill. You could "start in the mailroom" or on the sales floor and end up in middle management after 20 years, in a variety of companies, most of which don't even exist anymore, or if they do, they employ far fewer workers domestically today due to a combo of offshoring and automation.
- prottog 4y ago
  > but you could take lots of retail or clerical jobs, advance through hard work and support a family on those wages. Those are the days that are super gone Only in certain places, and only mostly due to crazy policies that made housing ridiculously unaffordable. I'm in an area where my barber lives on 10 acres of land he didn't inherit and together with his wife raises two children. This type of relaxed life is possible to do in wide swathes of the country outside of the tier-one cities that have global competition trying to get in and live there, as long as you make prudent choices. I think 20- to 30-something engineers who have spent their entire adult lives in major coastal cities have a huge blind spot to how middle America lives.
  - amrocha 4y ago
    That kind of life is not achievable on minimum wage, even if you choose to live in a small city
    - HPsquared 4y ago
      Only about 1% of workers are on minimum wage, you wouldn't expect an average lifestyle from that.
WalterBright 4y ago
> Based on numbers relating to workers’ diminishing share of profits, it seems to be that the capital class has been able to take a bigger piece of the profit pie without sharing. Consider the elephant in the room: https://www.federalbudgetinpictures.com/federal-spending-per-person-is-skyrocketing/ https://www.federalbudgetinpictures.com/federal-spending-per... Where does that money come from?
- zamnos 4y ago
  I was with that site until it compared the US budget to a household budget with a credit card. The average American family doesn't control the federal reserve or set interest rates and employs zero economists, so that seems like a dumb way to think about the problem.
  - all2 4y ago
    I'll note that the US government, by design, does not control the Fed. International bankers control the Fed.
    - WalterBright 4y ago
      The Fed is appointed by the President. That's a heluva influence.
  - WalterBright 4y ago
    The chart shows what happened to the money generated by increased productivity. The government spent it.
- B1FF_PSUVM 4y ago
  Out of the "how much is left over the subsistence budget" that has been growing since the Industrial Revolution started?
hn_throwaway_99 4y ago
> the capital class has been able to take a bigger piece of the profit pie without sharing. In the current world, where do you think a lot of the capital class is able to get their capital? Technological progress, and especially the Internet, has made much bigger markets out of what were previously lots of little markets, and now th "winner take all/most" dynamics make it so that where you previously could have, for example, lots of "winners" in every city (e.g. local newspapers selling classified ads), where now Google, FB and Amazon gobble up most ad dollars - I think someone posted that Amazon's ad business alone is bigger than all US (maybe more than that?) newspaper ad businesses.
- B1FF_PSUVM 4y ago
  The "star system" probably started when the printing press made advertising leaflets affordable. (Yes, they were printing bibles; radio and TV and the internet originally were going to be educational ...)
ChrisMarshallNY 4y ago
I have family that has been on the front lines of fighting global poverty and corruption, for their entire life (more than 50 years -at the very highest levels). I submit that it is not hyperbole to say that probably 95% of all global human problems can have their root cause traced to poverty. That is not a scientific number, so don't ask for a citation (it ain't happening).
zwkrt 4y ago
IMO the "main source of inequality" is that tech allows a small number of people to use technological and fiscal leverage to make an outsized impact on society as a whole. Anyone who has a job that produces value in a 1:1 way is positioned to be 'disrupted'. NLP, etc, just provides more tools for companies to increase their leverage in the market. My bet is that GPT-4 is probably better at being a paralegal than at least some small number of paralegals. GPT-5 will be better at that job than a larger percentage. Anyone who only has the skills to affect the lives and/or environments of the people in their immediate surrounding are going to find themselves on the 'have nots' end of the spectrum in the coming decades.
- throwaway2037 4y ago
  This is exactly what has happened to commercial and investment banking (market/trading) in the last 30 years. Computers and mass automation. Even if your profits only grow with inflation (in reality, they grow much faster), but you can reduce costs each year (less labour required), then return on equity continues to rise. It is crazy to me that most big commercial banks still have so many physical branches. I guess they exist for regulatory purposes -- probably _very_ hard to close a branch to avoid "banking deserts".
  - WWLink 4y ago
    This has changed considerably. Chase remodeled most of their existing branches so they have like, 1 teller, and 2 or 3 people sitting at desks for other transactions. That's it. The days where your usual branch had a line of like 15 tellers are long gone. Out here in southern california, I think they also closed many of their branches in the past few years. But looking back further - ohhhhhh yeah dude. Oh yeah. Totally. For a brief period my mom worked at a BofA facility that _processed paper checks_. Like they had a whole big office for it. That's completely 100% gone now. The checks get scanned at the point of entry (cash registers, teller counters, etc) and then shredded.
mr_toad 4y ago
There is no sharing and there never was. Companies don’t share profits with workers and they never have. Workers get paid on the marginal value of their productivity, not some portion of the total or average.
sidewndr46 4y ago
I don't know what you mean to imply by "government edict (e.g., ww2 era)" but WW2 in the US was the era of the US fixing wages under the authority of the president https://en.wikipedia.org/wiki/Stabilization_Act_of_1942 https://en.wikipedia.org/wiki/Stabilization_Act_of_1942 In short the Federal government broke the individual laborers and labor unions to make sure they could afford to win World War 2.
impalallama 4y ago
https://www.nytimes.com/2022/01/11/technology/income-inequality-technology.html https://www.nytimes.com/2022/01/11/technology/income-inequal... Yes this tech may not eliminate jobs, but the jobs remaining will be indefinite less skilled easier to replace, or outsource

by csa 4y ago

deleted 4y ago

[deleted]

xp84 4y ago

I think you and the one you're replying to are both very right. Yes, more of this money is going, instead of middle-class workers, straight to the capital class who own the "machines" that do the work people used to do. Except instead of it being a factory that makes industrial machines owned by some wealthy industrialist, the machines are things like Google and AWS and the owners are the small number of people with significant stock holdings. It's really striking though that a person graduating high school in say, 1970, could easily pick from a number of career choices even without doing college or even learning an in-demand trade, like plumbing, welding, etc. Factory work still existed and had a natural career progression that wasn't basically minimum wage, and the same went for retail. Sure, McDonalds burger flippers didn't expect then to own the restaurant in 10 years, but you could take lots of retail or clerical jobs, advance through hard work and support a family on those wages. Those are the days that are super gone and I totally agree with you both that something has changed for the worse for everyone who's not already wealthy.

mbgerring 4y ago
You can still do that with plumbing and welding
- xp84 4y ago
  Sorry, my phrasing was bad. Totally agree, even today trades are still AMAZING for this. I meant even if you were to set aside the trades, 50 years ago there was plenty of stuff you could at least support a family on without even that level of specialized skill. You could "start in the mailroom" or on the sales floor and end up in middle management after 20 years, in a variety of companies, most of which don't even exist anymore, or if they do, they employ far fewer workers domestically today due to a combo of offshoring and automation.
prottog 4y ago
> but you could take lots of retail or clerical jobs, advance through hard work and support a family on those wages. Those are the days that are super gone Only in certain places, and only mostly due to crazy policies that made housing ridiculously unaffordable. I'm in an area where my barber lives on 10 acres of land he didn't inherit and together with his wife raises two children. This type of relaxed life is possible to do in wide swathes of the country outside of the tier-one cities that have global competition trying to get in and live there, as long as you make prudent choices. I think 20- to 30-something engineers who have spent their entire adult lives in major coastal cities have a huge blind spot to how middle America lives.
- amrocha 4y ago
  That kind of life is not achievable on minimum wage, even if you choose to live in a small city
  - HPsquared 4y ago
    Only about 1% of workers are on minimum wage, you wouldn't expect an average lifestyle from that.

WalterBright 4y ago

> Based on numbers relating to workers’ diminishing share of profits, it seems to be that the capital class has been able to take a bigger piece of the profit pie without sharing. Consider the elephant in the room: https://www.federalbudgetinpictures.com/federal-spending-per-person-is-skyrocketing/ https://www.federalbudgetinpictures.com/federal-spending-per... Where does that money come from?

zamnos 4y ago
I was with that site until it compared the US budget to a household budget with a credit card. The average American family doesn't control the federal reserve or set interest rates and employs zero economists, so that seems like a dumb way to think about the problem.
- all2 4y ago
  I'll note that the US government, by design, does not control the Fed. International bankers control the Fed.
  - WalterBright 4y ago
    The Fed is appointed by the President. That's a heluva influence.
- WalterBright 4y ago
  The chart shows what happened to the money generated by increased productivity. The government spent it.
B1FF_PSUVM 4y ago
Out of the "how much is left over the subsistence budget" that has been growing since the Industrial Revolution started?

hn_throwaway_99 4y ago

> the capital class has been able to take a bigger piece of the profit pie without sharing. In the current world, where do you think a lot of the capital class is able to get their capital? Technological progress, and especially the Internet, has made much bigger markets out of what were previously lots of little markets, and now th "winner take all/most" dynamics make it so that where you previously could have, for example, lots of "winners" in every city (e.g. local newspapers selling classified ads), where now Google, FB and Amazon gobble up most ad dollars - I think someone posted that Amazon's ad business alone is bigger than all US (maybe more than that?) newspaper ad businesses.

B1FF_PSUVM 4y ago
The "star system" probably started when the printing press made advertising leaflets affordable. (Yes, they were printing bibles; radio and TV and the internet originally were going to be educational ...)

ChrisMarshallNY 4y ago

I have family that has been on the front lines of fighting global poverty and corruption, for their entire life (more than 50 years -at the very highest levels). I submit that it is not hyperbole to say that probably 95% of all global human problems can have their root cause traced to poverty. That is not a scientific number, so don't ask for a citation (it ain't happening).

zwkrt 4y ago

IMO the "main source of inequality" is that tech allows a small number of people to use technological and fiscal leverage to make an outsized impact on society as a whole. Anyone who has a job that produces value in a 1:1 way is positioned to be 'disrupted'. NLP, etc, just provides more tools for companies to increase their leverage in the market. My bet is that GPT-4 is probably better at being a paralegal than at least some small number of paralegals. GPT-5 will be better at that job than a larger percentage. Anyone who only has the skills to affect the lives and/or environments of the people in their immediate surrounding are going to find themselves on the 'have nots' end of the spectrum in the coming decades.

throwaway2037 4y ago
This is exactly what has happened to commercial and investment banking (market/trading) in the last 30 years. Computers and mass automation. Even if your profits only grow with inflation (in reality, they grow much faster), but you can reduce costs each year (less labour required), then return on equity continues to rise. It is crazy to me that most big commercial banks still have so many physical branches. I guess they exist for regulatory purposes -- probably _very_ hard to close a branch to avoid "banking deserts".
- WWLink 4y ago
  This has changed considerably. Chase remodeled most of their existing branches so they have like, 1 teller, and 2 or 3 people sitting at desks for other transactions. That's it. The days where your usual branch had a line of like 15 tellers are long gone. Out here in southern california, I think they also closed many of their branches in the past few years. But looking back further - ohhhhhh yeah dude. Oh yeah. Totally. For a brief period my mom worked at a BofA facility that _processed paper checks_. Like they had a whole big office for it. That's completely 100% gone now. The checks get scanned at the point of entry (cash registers, teller counters, etc) and then shredded.

mr_toad 4y ago

There is no sharing and there never was. Companies don’t share profits with workers and they never have. Workers get paid on the marginal value of their productivity, not some portion of the total or average.

sidewndr46 4y ago

I don't know what you mean to imply by "government edict (e.g., ww2 era)" but WW2 in the US was the era of the US fixing wages under the authority of the president https://en.wikipedia.org/wiki/Stabilization_Act_of_1942 https://en.wikipedia.org/wiki/Stabilization_Act_of_1942 In short the Federal government broke the individual laborers and labor unions to make sure they could afford to win World War 2.

impalallama 4y ago

https://www.nytimes.com/2022/01/11/technology/income-inequality-technology.html https://www.nytimes.com/2022/01/11/technology/income-inequal... Yes this tech may not eliminate jobs, but the jobs remaining will be indefinite less skilled easier to replace, or outsource