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This was not true in the immediate postwar period. The turning point was roughly the 1980s. Wealth concentration has been a deliberate US domestic policy for d

by runako 2y ago

This was not true in the immediate postwar period. The turning point was roughly the 1980s. Wealth concentration has been a deliberate US domestic policy for decades. This is, to a large degree, separate from the stability of our currency or military protection. It's the stated intent and logical result of relaxing taxes on the rich while enacting policies designed to hurt the working classes (e.g. reducing union power, not indexing minimum wage to inflation, refusal to address healthcare & housing costs, increasing fees at public universities, cutting existing safety net programs, etc.). Concentration of wealth is a choice. America is a very rich country and has not always chosen to distribute our wealth this way. Other countries make different choices. We are also allowed to make different choices.

deleted 2y ago
[deleted]
WalterBright 2y ago
> Wealth concentration has been a deliberate US domestic policy for decades. Wealth is not concentrated in a market society. It is created. Some people creating more wealth than others is not "concentrating" wealth in their hands. Another way to put it is it is not a fixed pie, where if one gets more another necessarily gets less. If I buy some art supplies for $20, and paint a masterpiece I sell for $100,000, wealth was not "concentrated" in me.
- PaulDavisThe1st 2y ago
  Two societies. In each one, someone buys $20 of art supplies, paints a masterpiece and it sells for $100,000. In one society, a marginal tax rate system taxes the artist with an upper rate of 92%, and they end up retaining about $50,000 of the income, with the rest flowing back into the control of the society (via its government). In the other society, a margin tax rate system taxes the artist with an upper rate of 28%, and they end up retaining about $70,000 of the income. In this society, the artist retains control over twice as much of the income as flows back into the control of society. "Wealth concentration" is not a policy related to markets, production, and trade. It's a policy related to taxation.
  - nickpp 2y ago
    In the first society, the probability of the artist completing and selling that masterpiece is correspondingly lower, since money is a strong motivator and even artists have bills to pay. Thus the first society tends to create less value overall, since value creators are demotivated by punishing taxation. Because of that, prospective buyers for that piece of art will be overall poorer so they will bid less for it, pushing the artist's reward even lower. The first society ends up poorer than the second, from its own policy. And that’s how you get inequality between nations, which you can’t “redistribute” away. Which inequality sooner or later leads to wars, as we can clearly see these days.
    - runako 2y ago
      The example is bad because nobody thinks of $100k as "concentrated wealth" and your argument has some purchase at those numbers. At $100 million, $1 billion, $10 billion, or $100 billion, the argument you put forth does not make sense. There is no motivational quantum for attaining the second, or third, or fourth billion, much less the 200th. Incidentally, most of the people who might be considered to be concentrating wealth do not and have not done so primarily on the basis of their labor and creativity like in the example. There is no credible argument that Jim Walton ($119 billion net worth) ever built or created anything of value anywhere near commensurate with his wealth. His path from $30 billion to nearly $120 billion had nothing to do with rewarding him for value creation.
      - WalterBright 2y ago
        > There is no motivational quantum for attaining the second, or third, or fourth billion, much less the 200th. That's probably correct. However, if you tax $100b at 40%, then the person has only $60b to invest in creating more wealth.
        PaulDavisThe1st 2y ago
        But in the meantime, the state has $40b of wealth under its control to invest. And while the $100B winner may have had some insight that contributed to the $100B, there also had to be a $100B winner in an economy structured the way ours is. Consequently, we don't really know whether there's a reason to prefer their investment choices over the ones the state will make. It currently remains unclear, for example, whether what Musk or Bezos have done with their vast wealth thus far will, in the medium or long term turn out to be a net benefit to society (it certainly has not been so in the short tem). The belief in the business genius really is overblown. Yes, some folks are better at it than others, but when we run the economy like a casino, there will always be big winners no matter what personal qualities the players bring to the game.
- mindslight 2y ago
  When people talk about wealth concentration, they're not talking about artists with high-variance paydays. They're focusing on all of the captive-market middlemen that have been allowed to set up shop playing negative sum games via regulatory capture, externalities, lack of anti-trust enforcement, etc.
  - WalterBright 2y ago
    When people like Sanders talk about wealth concentration in billionaires like Musk, how did Musk make his money with negative sum games, regulatory capture, etc.?
    - mindslight 2y ago
      Oh boy. There have been tomes written on how Musk's companies are set up around capturing government subsidies. If you're earnestly interested, such analyses are not hard to find. The stock market itself is a shining example of regulatory capture - a perma-bubble due to fake "fiscal responsibility" political marketing that causes massive streams of newly printed money to be handed out to banks to dump into the asset bubble (that newly printed money representing the gains from technology and offshoring that would have otherwise caused price deflation) But sure, I'll also agree that some of Musk's riches are due to actual wealth creation - before the crippling social media addiction and subsequent spiral into lunacy, anyway. But that's all focusing on the problematic ways wealth concentration can arise (the context it was originally brought up in). The other critique (likely what you're referencing about Sanders) is about the corrosive effects that concentrated wealth tends to have. And surely you can see how that applies pretty strongly to Musk...
      - WalterBright 2y ago
        So how much subsidy did Musk receive for SpaceX? (The answer is $0.) SpaceX is worth around $390 billion. > some of Musk's riches are due to actual wealth creation Very generous of you! LOL
        2y ago
- BoiledCabbage 2y ago
  > Wealth is not concentrated in a market society. Respectfully, you should do some reading of basic economics. Absent of external forces to correct for it, wealth absolutely concentrates in unregulated markets.
  - WalterBright 2y ago
    For economics, I prefer history to academic theory. (But I have read Friedman's "Monetary History of the United States", and books by economist C. Northcote Parkinson, "Capitalism" by Reisman, etc. My dad also had a degree in economics from MIT and an MBA from Harvard and a doctorate in economicis and taught finance in college. We had many many long talks about economics. And yeah, I did take econ 101 at Caltech from a Marxist professor. My dad would have had him for lunch.) > wealth absolutely concentrates in unregulated markets The US had more or less unregulated markets for well over a century since its founding. The result? The most stupendous wealth creation, pushing scores of millions of people from poverty into the middle class and beyond. There was no "transfer" of wealth from the poor people to the wealthy (there couldn't have been, because they, being poor, didn't have wealth).
    - forgetfreeman 2y ago
      "There was no "transfer" of wealth from the poor people to the wealthy (there couldn't have been, because they, being poor, didn't have wealth)." You're ignoring value created through labor. The poor may not have wealth but they have their labor to sell on the open market. The returns on that exchange have been steadily declining since the post-war period thanks to flat wages and inflation. Meanwhile increases in productivity (as demonstrated by increases in GDP) by definition have to go somewhere. Since it isn't going into working folks savings accounts then it's accumulating somewhere. Also worth considering, the middle class has been declining for the last 40 years.
      - WalterBright 2y ago
        > have to go somewhere. Consider the vast increase in government spending and entitlements. As for the declines, the US free market has steadily become less and less free market.

by runako 2y ago

deleted 2y ago

[deleted]

WalterBright 2y ago

> Wealth concentration has been a deliberate US domestic policy for decades. Wealth is not concentrated in a market society. It is created. Some people creating more wealth than others is not "concentrating" wealth in their hands. Another way to put it is it is not a fixed pie, where if one gets more another necessarily gets less. If I buy some art supplies for $20, and paint a masterpiece I sell for $100,000, wealth was not "concentrated" in me.

PaulDavisThe1st 2y ago
Two societies. In each one, someone buys $20 of art supplies, paints a masterpiece and it sells for $100,000. In one society, a marginal tax rate system taxes the artist with an upper rate of 92%, and they end up retaining about $50,000 of the income, with the rest flowing back into the control of the society (via its government). In the other society, a margin tax rate system taxes the artist with an upper rate of 28%, and they end up retaining about $70,000 of the income. In this society, the artist retains control over twice as much of the income as flows back into the control of society. "Wealth concentration" is not a policy related to markets, production, and trade. It's a policy related to taxation.
- nickpp 2y ago
  In the first society, the probability of the artist completing and selling that masterpiece is correspondingly lower, since money is a strong motivator and even artists have bills to pay. Thus the first society tends to create less value overall, since value creators are demotivated by punishing taxation. Because of that, prospective buyers for that piece of art will be overall poorer so they will bid less for it, pushing the artist's reward even lower. The first society ends up poorer than the second, from its own policy. And that’s how you get inequality between nations, which you can’t “redistribute” away. Which inequality sooner or later leads to wars, as we can clearly see these days.
  - runako 2y ago
    The example is bad because nobody thinks of $100k as "concentrated wealth" and your argument has some purchase at those numbers. At $100 million, $1 billion, $10 billion, or $100 billion, the argument you put forth does not make sense. There is no motivational quantum for attaining the second, or third, or fourth billion, much less the 200th. Incidentally, most of the people who might be considered to be concentrating wealth do not and have not done so primarily on the basis of their labor and creativity like in the example. There is no credible argument that Jim Walton ($119 billion net worth) ever built or created anything of value anywhere near commensurate with his wealth. His path from $30 billion to nearly $120 billion had nothing to do with rewarding him for value creation.
    - WalterBright 2y ago
      > There is no motivational quantum for attaining the second, or third, or fourth billion, much less the 200th. That's probably correct. However, if you tax $100b at 40%, then the person has only $60b to invest in creating more wealth.
      - PaulDavisThe1st 2y ago
        But in the meantime, the state has $40b of wealth under its control to invest. And while the $100B winner may have had some insight that contributed to the $100B, there also had to be a $100B winner in an economy structured the way ours is. Consequently, we don't really know whether there's a reason to prefer their investment choices over the ones the state will make. It currently remains unclear, for example, whether what Musk or Bezos have done with their vast wealth thus far will, in the medium or long term turn out to be a net benefit to society (it certainly has not been so in the short tem). The belief in the business genius really is overblown. Yes, some folks are better at it than others, but when we run the economy like a casino, there will always be big winners no matter what personal qualities the players bring to the game.
mindslight 2y ago
When people talk about wealth concentration, they're not talking about artists with high-variance paydays. They're focusing on all of the captive-market middlemen that have been allowed to set up shop playing negative sum games via regulatory capture, externalities, lack of anti-trust enforcement, etc.
- WalterBright 2y ago
  When people like Sanders talk about wealth concentration in billionaires like Musk, how did Musk make his money with negative sum games, regulatory capture, etc.?
  - mindslight 2y ago
    Oh boy. There have been tomes written on how Musk's companies are set up around capturing government subsidies. If you're earnestly interested, such analyses are not hard to find. The stock market itself is a shining example of regulatory capture - a perma-bubble due to fake "fiscal responsibility" political marketing that causes massive streams of newly printed money to be handed out to banks to dump into the asset bubble (that newly printed money representing the gains from technology and offshoring that would have otherwise caused price deflation) But sure, I'll also agree that some of Musk's riches are due to actual wealth creation - before the crippling social media addiction and subsequent spiral into lunacy, anyway. But that's all focusing on the problematic ways wealth concentration can arise (the context it was originally brought up in). The other critique (likely what you're referencing about Sanders) is about the corrosive effects that concentrated wealth tends to have. And surely you can see how that applies pretty strongly to Musk...
    - WalterBright 2y ago
      So how much subsidy did Musk receive for SpaceX? (The answer is $0.) SpaceX is worth around $390 billion. > some of Musk's riches are due to actual wealth creation Very generous of you! LOL
      - 2y ago
BoiledCabbage 2y ago
> Wealth is not concentrated in a market society. Respectfully, you should do some reading of basic economics. Absent of external forces to correct for it, wealth absolutely concentrates in unregulated markets.
- WalterBright 2y ago
  For economics, I prefer history to academic theory. (But I have read Friedman's "Monetary History of the United States", and books by economist C. Northcote Parkinson, "Capitalism" by Reisman, etc. My dad also had a degree in economics from MIT and an MBA from Harvard and a doctorate in economicis and taught finance in college. We had many many long talks about economics. And yeah, I did take econ 101 at Caltech from a Marxist professor. My dad would have had him for lunch.) > wealth absolutely concentrates in unregulated markets The US had more or less unregulated markets for well over a century since its founding. The result? The most stupendous wealth creation, pushing scores of millions of people from poverty into the middle class and beyond. There was no "transfer" of wealth from the poor people to the wealthy (there couldn't have been, because they, being poor, didn't have wealth).
  - forgetfreeman 2y ago
    "There was no "transfer" of wealth from the poor people to the wealthy (there couldn't have been, because they, being poor, didn't have wealth)." You're ignoring value created through labor. The poor may not have wealth but they have their labor to sell on the open market. The returns on that exchange have been steadily declining since the post-war period thanks to flat wages and inflation. Meanwhile increases in productivity (as demonstrated by increases in GDP) by definition have to go somewhere. Since it isn't going into working folks savings accounts then it's accumulating somewhere. Also worth considering, the middle class has been declining for the last 40 years.
    - WalterBright 2y ago
      > have to go somewhere. Consider the vast increase in government spending and entitlements. As for the declines, the US free market has steadily become less and less free market.