7 ms·

Wealth inequality is root cause of all current economic woes. Interview. [video]

27 points by scotty79 3y ago

kelseyfrog 3y ago
What's an acceptable level of wealth inequality?
- aappleby 3y ago
  How much of the global resource pile can you realistically consume in a year, assuming you ate and drank and traveled as much as you were physically capable of?
- j7ake 3y ago
  If the bottom have their needs met (food, housing, health care, education, day care) then any wealth inequality is acceptable.
  - yehoe 3y ago
    Personally not sure I find one Bezos to be worth much. Point to a billionaire and I’ll show you a coddled idiot who couldn’t grow their own food. The top, if there must be one, should be the people wearing out their bodies to make the roads and grow the food. Office workers munging numbers around is not worth much to the real economy that requires construction and production of real things. Why should a rich person have the ability to burn more fossil fuels? Nah we need a more scientific method for economics. Perhaps constraints built on how much a lifestyle pollutes?
  - darthrupert 3y ago
    If money was all that it's about, I would agree. Unfortunately, money can be transferred into power.
  - latency-guy2 3y ago
    Which bottom? The bottom that works full time? The bottom that has some level of employment? The bottom that has no interest in employment? The bottom that does not do anything at all except exist? The bottom that is antagonistic to remainder of society? If you are not specific, then you do not have a position.
    - kelseyfrog 3y ago
      Do the other half of the if-by-whiskey
      - latency-guy2 3y ago
        I don't think I really hide my stance on this website. You might remember a few. But nonetheless, the specifics always matter. While you might think society is more about the feels, there's a lot of reals that guide people too. Avoiding the specifics is probably fruitful, but you will not convince me without it.
    - j7ake 3y ago
      In USA, Bottom means the people who lack food, shelter, housing, health care, and other social services that are available to median income people in a comparably affluent Western country.
      - latency-guy2 3y ago
        No idea what that means, it seems you sidestepped my question.
  - gizmo 3y ago
    You can’t have any kind of democracy with that kind of wealth inequality. There’s more to society than just offering subsistence to the common people.
  - musicale 3y ago
    So basically food + all of the things that are expensive and greatly outpace inflation.
tmnvix 3y ago
A typical response to this issue is "why does it matter to you if someone else has more than you do?" - framing the issue as essentially envy. The obvious problem here is that it really is largely a zero-sum game. A dollar represents a claim on the world's resources, which are limited. Capitalism is an effective system for motivating productive activity, but it also has an inherent tendency to concentrate wealth. If we want to avoid a situation where a few people control such a large proportion of the world's resources that there is not enough left over to meet the needs of others, then we need to balance this tendency. Income taxes are one approach, but wealth taxes deal with the actual issue. Taxing wealth is not unfair if you accept that the economic system we have chosen is itself unfair. We give too many advantages to those that gather income through owning things (i.e. unearned income) compared with those that engage in productive activity (i.e. earned income). I say we 'give' those advantages because they are not due to some inherent law of nature. It is a choice we have made as a society. In the natural world hoarding works in the opposite way. A stash of nuts doesn't magically grow. Quite the opposite. Real effort has to be expended to preserve the stash.
- thegrim33 3y ago
  The economy would be a zero sum game if there was exactly X amount of dollars in circulation every year that people were fighting over, if the same X dollars kept changing hands. That is not the case. The economy expands and contracts. The amount of money in circulation expands by an average of 5-6% per year. The pie grows every year. If you can't even get something that basic correct in your analysis it kind of invalidates all of the rest of your ideas.
  - tmnvix 3y ago
    > The amount of money in circulation expands by an average of 5-6% per year. I think you have to ask yourself where this newly minted money ends up first. I think you'll find that it largely just increases the nominal value of assets. > The pie grows every year. The 'pie' is the world's resources - not the money. If new money essentially just increases the nominal value of assets it doesn't invalidate what I've said. Quite the opposite. An increase in the money supply exacerbates wealth inequality as can be seen recently with historically low interest rates.
tmnvix 3y ago
Interesting comment on the accommodation crisis. > I speak to people a lot about what the economy is like where they are from. Every single person in the world thinks there is a massive house price crisis caused specifically by the planning system in the city they live in. People in New York think this. People in London think this. People in San Francisco think this. People in LA think this. People in Tokyo think this. People in Shanghai think this. People in Sydney think this. People in Vancouver think this. People in Toronto think this. People in Rio de Janeiro think this, right? It's a fucking global problem. It's not even just - look at stock prices - every asset in the world has gone through the fucking roof. This is a problem about asset prices broadly and it's clearly global.
shreyansh_k 3y ago
It seems that we tend to treat wealth inequality as some sort of judgement of fairness and unfairness. That is: the lower wealth inequality, the more fair. I think projecting the quality of fairness is a false hope. The Dutch are the tallest people in the world and Asians tend to be the smallest. Remember that oxygen and food are also resources in the world. Consequently, the Dutch inherently use more food and oxygen to maintain their bigger bodies compared to the Asians. As such, it is unfair to an Asian person that their Dutch friend use so much more, if we were to judge them based on fairness. Now, just to mess with the reader's mind, I'll flip my own case by saying that since there are many more Asians than the Dutch, it's unfair to the Dutch that Asians consume so much of food and oxygen. I hope that the reader gets my point that projection of any sort of fairness is an exercise in vain. I think that if we want to grow up, we need to grow beyond fairness and unfairness. We need to looks for things beyond these realms of false projection. Personally, I have accepted the idea that some people have more wealth than others and some less. I neither despise those people nor I love them. I feel content with whatever life has given me. Now, that is not to say that I don't desire to be richer. I do and I continue to act in my own favour. It's just that I do not feel sad that I have less than others or hate someone if they are richer.
- deleted 3y ago
  [deleted]
- cycomanic 3y ago
  I don't know what your argument about tallness is supposed to mean. Fairness has nothing to do with people being equal in physical attributes, however it does have to do with being equal in front of the law and how to influence law and the ability to improve one's economic situation (or the chance to loose it). That is what is being eroded by the wealth inequality. The wealthy are significantly insulated from the law, are shaping laws that further reduce their chance of loosing wealth, increasing their wealth in the process and reducing everyone else's economic opportunity. For a society this creates an unstable situation, if all economic (and political) power sits in the hands of only a few that creates unrest often leading to a violent overturn of the situation (or trying to counteract via totalitarian measures). As a side note, you say you're content with not being wealthy, but how far would this content stretch, would you be content if you are so poor that you'd struggle to feed your kids?
anon-sre-srm 3y ago
Infographics: Wealth Inequality in America (2018) https://youtu.be/EZRFVjU2IWs https://youtu.be/EZRFVjU2IWs America is similar to Brazil and Mexico, but it's a third-world country politically with mostly soft, misguided, uneducated voters who don't realize how badly they're mistreated unable or unwilling to take effective corrective actions to address the root causes. Jan 9 riots, conspiracy theories, political complaints about one party or another, bikeshedding, and flashpoint issues absorb and express this discontent ineffectively. Unfortunately, economic inequality cannot be reformed from within (see also: John McCain) when the political operating system is absurdly polluted and usurped by billionaires intent on maintaining the status quo feudal lobbying system that anoints celebrities to high office with media buys in exchange for access and influence. Nonviolent, massive, sustained pressure is the only way to force out the corrupt, bribed officials and attain revolutionary campaign finance reform.
originalvichy 3y ago
Anyone who has played an MMO with money mechanics should walk away with a good understanding of what happens with small changes to market mechanics through game devs’ changes. Everyone who understands the same mechanics should also get why giving more wealth to people who don’t move it would collapse the base structuresnof money flows. I can’t believe how 15 year old me understood that very high earners (owners) should be taxed hard because they have zero incentive to use their money after they reach the ”end game”. Even in IT I see DINK/single colleagues buy everything they wanted years ago, and put big sums (relative to average earners) to stocks and funds. They understandably don’t have lavish spending habits so they just feed an engine that is degrees detached from the basic exchange of goods and services. The metagame is simply to put money away into a safe scheme and not spend it towards others’ wages with services (restaurants or events) but stocks and large investment funds. At some point the money missing from the circulation just hollows out the lower rungs of the economy, especially when bigger fish keep eating the small fish: no small grocer survives against the big boys, so even that daily spend at the store goes to megacorps. As with MMOs, we need game mechanics changes that radically slow down the built in feature of capitalism: snowballing accumulation of wealth that sucks the market dry of competitors.
- deleted 3y ago
  [deleted]
- EchoChamberMan 3y ago
  Trickle down economics is a scam.

27 points by scotty79 3y ago

kelseyfrog 3y ago

What's an acceptable level of wealth inequality?

aappleby 3y ago
How much of the global resource pile can you realistically consume in a year, assuming you ate and drank and traveled as much as you were physically capable of?
j7ake 3y ago
If the bottom have their needs met (food, housing, health care, education, day care) then any wealth inequality is acceptable.
- yehoe 3y ago
  Personally not sure I find one Bezos to be worth much. Point to a billionaire and I’ll show you a coddled idiot who couldn’t grow their own food. The top, if there must be one, should be the people wearing out their bodies to make the roads and grow the food. Office workers munging numbers around is not worth much to the real economy that requires construction and production of real things. Why should a rich person have the ability to burn more fossil fuels? Nah we need a more scientific method for economics. Perhaps constraints built on how much a lifestyle pollutes?
- darthrupert 3y ago
  If money was all that it's about, I would agree. Unfortunately, money can be transferred into power.
- latency-guy2 3y ago
  Which bottom? The bottom that works full time? The bottom that has some level of employment? The bottom that has no interest in employment? The bottom that does not do anything at all except exist? The bottom that is antagonistic to remainder of society? If you are not specific, then you do not have a position.
  - kelseyfrog 3y ago
    Do the other half of the if-by-whiskey
    - latency-guy2 3y ago
      I don't think I really hide my stance on this website. You might remember a few. But nonetheless, the specifics always matter. While you might think society is more about the feels, there's a lot of reals that guide people too. Avoiding the specifics is probably fruitful, but you will not convince me without it.
  - j7ake 3y ago
    In USA, Bottom means the people who lack food, shelter, housing, health care, and other social services that are available to median income people in a comparably affluent Western country.
    - latency-guy2 3y ago
      No idea what that means, it seems you sidestepped my question.
- gizmo 3y ago
  You can’t have any kind of democracy with that kind of wealth inequality. There’s more to society than just offering subsistence to the common people.
- musicale 3y ago
  So basically food + all of the things that are expensive and greatly outpace inflation.

tmnvix 3y ago

A typical response to this issue is "why does it matter to you if someone else has more than you do?" - framing the issue as essentially envy. The obvious problem here is that it really is largely a zero-sum game. A dollar represents a claim on the world's resources, which are limited. Capitalism is an effective system for motivating productive activity, but it also has an inherent tendency to concentrate wealth. If we want to avoid a situation where a few people control such a large proportion of the world's resources that there is not enough left over to meet the needs of others, then we need to balance this tendency. Income taxes are one approach, but wealth taxes deal with the actual issue. Taxing wealth is not unfair if you accept that the economic system we have chosen is itself unfair. We give too many advantages to those that gather income through owning things (i.e. unearned income) compared with those that engage in productive activity (i.e. earned income). I say we 'give' those advantages because they are not due to some inherent law of nature. It is a choice we have made as a society. In the natural world hoarding works in the opposite way. A stash of nuts doesn't magically grow. Quite the opposite. Real effort has to be expended to preserve the stash.

thegrim33 3y ago
The economy would be a zero sum game if there was exactly X amount of dollars in circulation every year that people were fighting over, if the same X dollars kept changing hands. That is not the case. The economy expands and contracts. The amount of money in circulation expands by an average of 5-6% per year. The pie grows every year. If you can't even get something that basic correct in your analysis it kind of invalidates all of the rest of your ideas.
- tmnvix 3y ago
  > The amount of money in circulation expands by an average of 5-6% per year. I think you have to ask yourself where this newly minted money ends up first. I think you'll find that it largely just increases the nominal value of assets. > The pie grows every year. The 'pie' is the world's resources - not the money. If new money essentially just increases the nominal value of assets it doesn't invalidate what I've said. Quite the opposite. An increase in the money supply exacerbates wealth inequality as can be seen recently with historically low interest rates.

tmnvix 3y ago

Interesting comment on the accommodation crisis. > I speak to people a lot about what the economy is like where they are from. Every single person in the world thinks there is a massive house price crisis caused specifically by the planning system in the city they live in. People in New York think this. People in London think this. People in San Francisco think this. People in LA think this. People in Tokyo think this. People in Shanghai think this. People in Sydney think this. People in Vancouver think this. People in Toronto think this. People in Rio de Janeiro think this, right? It's a fucking global problem. It's not even just - look at stock prices - every asset in the world has gone through the fucking roof. This is a problem about asset prices broadly and it's clearly global.

shreyansh_k 3y ago

It seems that we tend to treat wealth inequality as some sort of judgement of fairness and unfairness. That is: the lower wealth inequality, the more fair. I think projecting the quality of fairness is a false hope. The Dutch are the tallest people in the world and Asians tend to be the smallest. Remember that oxygen and food are also resources in the world. Consequently, the Dutch inherently use more food and oxygen to maintain their bigger bodies compared to the Asians. As such, it is unfair to an Asian person that their Dutch friend use so much more, if we were to judge them based on fairness. Now, just to mess with the reader's mind, I'll flip my own case by saying that since there are many more Asians than the Dutch, it's unfair to the Dutch that Asians consume so much of food and oxygen. I hope that the reader gets my point that projection of any sort of fairness is an exercise in vain. I think that if we want to grow up, we need to grow beyond fairness and unfairness. We need to looks for things beyond these realms of false projection. Personally, I have accepted the idea that some people have more wealth than others and some less. I neither despise those people nor I love them. I feel content with whatever life has given me. Now, that is not to say that I don't desire to be richer. I do and I continue to act in my own favour. It's just that I do not feel sad that I have less than others or hate someone if they are richer.

deleted 3y ago
[deleted]
cycomanic 3y ago
I don't know what your argument about tallness is supposed to mean. Fairness has nothing to do with people being equal in physical attributes, however it does have to do with being equal in front of the law and how to influence law and the ability to improve one's economic situation (or the chance to loose it). That is what is being eroded by the wealth inequality. The wealthy are significantly insulated from the law, are shaping laws that further reduce their chance of loosing wealth, increasing their wealth in the process and reducing everyone else's economic opportunity. For a society this creates an unstable situation, if all economic (and political) power sits in the hands of only a few that creates unrest often leading to a violent overturn of the situation (or trying to counteract via totalitarian measures). As a side note, you say you're content with not being wealthy, but how far would this content stretch, would you be content if you are so poor that you'd struggle to feed your kids?

anon-sre-srm 3y ago

Infographics: Wealth Inequality in America (2018) https://youtu.be/EZRFVjU2IWs https://youtu.be/EZRFVjU2IWs America is similar to Brazil and Mexico, but it's a third-world country politically with mostly soft, misguided, uneducated voters who don't realize how badly they're mistreated unable or unwilling to take effective corrective actions to address the root causes. Jan 9 riots, conspiracy theories, political complaints about one party or another, bikeshedding, and flashpoint issues absorb and express this discontent ineffectively. Unfortunately, economic inequality cannot be reformed from within (see also: John McCain) when the political operating system is absurdly polluted and usurped by billionaires intent on maintaining the status quo feudal lobbying system that anoints celebrities to high office with media buys in exchange for access and influence. Nonviolent, massive, sustained pressure is the only way to force out the corrupt, bribed officials and attain revolutionary campaign finance reform.

originalvichy 3y ago

Anyone who has played an MMO with money mechanics should walk away with a good understanding of what happens with small changes to market mechanics through game devs’ changes. Everyone who understands the same mechanics should also get why giving more wealth to people who don’t move it would collapse the base structuresnof money flows. I can’t believe how 15 year old me understood that very high earners (owners) should be taxed hard because they have zero incentive to use their money after they reach the ”end game”. Even in IT I see DINK/single colleagues buy everything they wanted years ago, and put big sums (relative to average earners) to stocks and funds. They understandably don’t have lavish spending habits so they just feed an engine that is degrees detached from the basic exchange of goods and services. The metagame is simply to put money away into a safe scheme and not spend it towards others’ wages with services (restaurants or events) but stocks and large investment funds. At some point the money missing from the circulation just hollows out the lower rungs of the economy, especially when bigger fish keep eating the small fish: no small grocer survives against the big boys, so even that daily spend at the store goes to megacorps. As with MMOs, we need game mechanics changes that radically slow down the built in feature of capitalism: snowballing accumulation of wealth that sucks the market dry of competitors.

deleted 3y ago
[deleted]
EchoChamberMan 3y ago
Trickle down economics is a scam.