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Can you show that the inequality changes lead to the median wealth changes? I could just as easily argue that the causality flows in the opposite direction you

by slg 3y ago

Can you show that the inequality changes lead to the median wealth changes? I could just as easily argue that the causality flows in the opposite direction you are implying. When median wealth increases, people stop policing inequality as fervently and when median wealth decreases, they recommit to addressing inequality.

btilly 3y ago
In many specific cases, yes. The classic example is the Industrial Revolution. Which continues to spread. When the textile industry reaches a particular area, peasant farmers move into factories. This is better paying and easier work than life in the rice paddy. And therefore is a rise in the median wealth. But the economic wins from those running the textile factories are far larger than their employees, and so also comes with a rise in inequity. The same thing happened with assembly lines. Henry Ford's famous $5/day was a multiple of what people could be paid in other kinds of manual work. But Henry wound up with over a billion dollars. A rise in general welfare accompanied by a rise in inequity. As http://www.paulgraham.com/richnow.html http://www.paulgraham.com/richnow.html shows, this is a general trend today. Most of the current great fortunes are based on people who created new wealth. Most becomes part of our general lives getting better. Of that which goes to the new company, some goes to employees, some to investors, and some to those who built the company. The division varies. But the result is increased wealth and inequity both.
- slg 3y ago
  >When the textile industry reaches a particular area, peasant farmers move into factories. This is better paying and easier work than life in the rice paddy. And therefore is a rise in the median wealth. But the economic wins from those running the textile factories are far larger than their employees, and so also comes with a rise in inequity. I don't know how you can state this as a definitive argument because it relies on assigning an arbitrary monetary value to something that is impossible to measure. For example, how can we say that life as a subsistence farmer on some aristocrats land is inherently a worse life than working 12 hours a day in sweatshop and going home to a slum and a room shared with dozens of other random people? Yes, the subsistence farmer might technically own nothing and the factory worker has a wage, that doesn't mean the factory worker has a better life. Also the PG argument is flawed as it seems to suggest that a company's value is all new value. The economy is more complicated than that. There are some zero-sum interactions in the economy. PG's Airbnb wealth didn't just come from people renting out their spare bedroom. It came at the expense of hotels. It came at the expense of housekeeping workers at those hotels who were no longer needed due to reduced demand. It can at the expense of people who were priced out of their neighborhood because people were buying real estate to rent on Airbnb. It is easy to miss the consolidation of wealth if you think that any new fortune is from entirely new value.
  - btilly 3y ago
    Where the textile industry goes, you find people moving from farms to cities to get those jobs. Often sending money back home. And then better factories move in to take advantage of the new workforce, and textiles move on to a new place where people can be found who are desperate enough to take the worst factory jobs. This pattern has been going on for over a century. I base "this job is better" not on an arbitrary monetary standard, but by the fact that people show their preference by voting with their feet. Over and over again. Over decades, and across many countries.
    - slg 3y ago
      You are once again establishing a causal link that isn't nearly as definitive as you imply. The industrial revolution didn't only happen in factories. It happened on farms too. Many people left farms because their agricultural labor was no longer as valuable. Many had no choice but to move to cities. That is part of why they were sending money back to their family on the farm, the family needed it.

by slg 3y ago

btilly 3y ago

In many specific cases, yes. The classic example is the Industrial Revolution. Which continues to spread. When the textile industry reaches a particular area, peasant farmers move into factories. This is better paying and easier work than life in the rice paddy. And therefore is a rise in the median wealth. But the economic wins from those running the textile factories are far larger than their employees, and so also comes with a rise in inequity. The same thing happened with assembly lines. Henry Ford's famous $5/day was a multiple of what people could be paid in other kinds of manual work. But Henry wound up with over a billion dollars. A rise in general welfare accompanied by a rise in inequity. As http://www.paulgraham.com/richnow.html http://www.paulgraham.com/richnow.html shows, this is a general trend today. Most of the current great fortunes are based on people who created new wealth. Most becomes part of our general lives getting better. Of that which goes to the new company, some goes to employees, some to investors, and some to those who built the company. The division varies. But the result is increased wealth and inequity both.

slg 3y ago
>When the textile industry reaches a particular area, peasant farmers move into factories. This is better paying and easier work than life in the rice paddy. And therefore is a rise in the median wealth. But the economic wins from those running the textile factories are far larger than their employees, and so also comes with a rise in inequity. I don't know how you can state this as a definitive argument because it relies on assigning an arbitrary monetary value to something that is impossible to measure. For example, how can we say that life as a subsistence farmer on some aristocrats land is inherently a worse life than working 12 hours a day in sweatshop and going home to a slum and a room shared with dozens of other random people? Yes, the subsistence farmer might technically own nothing and the factory worker has a wage, that doesn't mean the factory worker has a better life. Also the PG argument is flawed as it seems to suggest that a company's value is all new value. The economy is more complicated than that. There are some zero-sum interactions in the economy. PG's Airbnb wealth didn't just come from people renting out their spare bedroom. It came at the expense of hotels. It came at the expense of housekeeping workers at those hotels who were no longer needed due to reduced demand. It can at the expense of people who were priced out of their neighborhood because people were buying real estate to rent on Airbnb. It is easy to miss the consolidation of wealth if you think that any new fortune is from entirely new value.
- btilly 3y ago
  Where the textile industry goes, you find people moving from farms to cities to get those jobs. Often sending money back home. And then better factories move in to take advantage of the new workforce, and textiles move on to a new place where people can be found who are desperate enough to take the worst factory jobs. This pattern has been going on for over a century. I base "this job is better" not on an arbitrary monetary standard, but by the fact that people show their preference by voting with their feet. Over and over again. Over decades, and across many countries.
  - slg 3y ago
    You are once again establishing a causal link that isn't nearly as definitive as you imply. The industrial revolution didn't only happen in factories. It happened on farms too. Many people left farms because their agricultural labor was no longer as valuable. Many had no choice but to move to cities. That is part of why they were sending money back to their family on the farm, the family needed it.