5 ms·

Is there some assumption here that inequality is bad? Or that there's some ideal number? Or that there's a meaningful comparison with modern economies? I see "

by Y_Y 2y ago

Is there some assumption here that inequality is bad? Or that there's some ideal number? Or that there's a meaningful comparison with modern economies? I see "inequality" as a concept like "uncertainty", it can be pointed to as the source of social and economic issues, but only is undesirable that rain is seen as undesirable weather. Nobody likes being on the wrong end of these, but they are inevitable and natural (to some extent) and I think we're better off trying to acheive a society that works with an equilibrium wealth distribution. Umbrellas rather than weather control machines.

idiotsecant 2y ago
Yes. Massive inequality is bad.
- deleted 2y ago
  [deleted]
RivieraKid 2y ago
The main argument against consumption inequality is that it's suboptimal in terms of average happiness / utility / well-being. If I spend $1M per month and transfer $1k of that spending to someone who spends $1k per month, average well-being would increase. In the US, the top 10% are responsible for 50% of consumption. This means that higher redistribution can increase the spending of the bottom 90% by X% at the cost of decreasing the spending of the top 10% by X% (assuming no decrease in total production). Of course, redistribution has negative effects too, I don't know what level of redistribution is optimal.
- moonlet 2y ago
  Well as shown by the original Communists, total redistribution just lets greedy people on the inside skim off the top. A taxation system with a properly constructed social safety net on the other hand, which is what I think you’re describing, is one where the wealthiest pay in the most and the least wealthy receive sufficient aid to get by.
findthewords 2y ago
Resource inequality and thus wealth inequality is rather bad because one person is generally unable to allocate resources efficiently after a certain point of excess. Resource inequality leads to inefficient resource allocation.
- kibwen 2y ago
  It's easy to see that with an unbounded amount of wealth, a single actor can keep a market irrational for an unbounded amount of time. Even with realistic (finite) amounts of wealth, this actor can keep a market irrational longer than you can remain solvent. In general, markets can only work when people are averse to the loss of money, thereby introducing a feedback mechanism. And people are only averse to the loss of money when that has material consequences for their well-being. For the ultra-wealthy today, the marginal value of every additional dollar (or million dollars) is essentially zero, so the self-balancing properties of markets are prevented from doing their job properly, namely the efficient allocation of resources.
  - cyberjerkXX 2y ago
    Your statement is a general misunderstanding of how markets work. The role of the market is not to be self balanced but to facilitate trade. Markets are voluntary exchanges between individuals and organizations. Markets work because people are ultimately the best at deciding their needs and wants during a specific time.
    - kibwen 2y ago
      No, it's not strictly voluntary, because the existence of a market sets a price for a product, and materially differing from that price either puts you at a disadvantage (deprives you of voluntary trading partners) or creates opportunities for arbitrage (disadvantaging those who would otherwise voluntarily trade exclusively with you). And if your competitor has a massive pre-existing wealth advantage, they'll happily eat the loss and undercut you until you're out of business. This produces worse outcomes in the long run.
- 2y ago
decimalenough 2y ago
A society where everybody can create wealth ends up far richer than one where one person hoards it all. So, yes, extreme inequality is bad for everybody, even those at the top of an unequal society. Most people view the Nordics as desirable places to live and their Gini coefficient hovers around 0.3, while places with very high inequality, like Brazil and South Africa, tend to be poor and violent.
- MacsHeadroom 2y ago
  Nordic countries are made of homogeneous populations whose ancestors somewhat uniquely developed prosocial long term planning preferences to survive harsh winters thanks to natural selection. Nordic equality is as natural as the inequality we see everywhere else.
  - Jensson 2y ago
    I think it has more to do with boat culture, when you are on the same boat you all die the same if it sinks no matter the ranks.
  - dsign 2y ago
    > Nordic countries are made of homogeneous populations Once upon a time, it was so. Today, not so much. If that's a good or a bad thing, it's an entirely different can of worms. I think diversity in the Nordics is beautiful, but Japan has managed without it and they have great artisans. In the Nordics, in addition to long barbaric winters, having long barbaric Middle Ages helps foster social discipline. See what beloved King Vasa of Sweden did to peasants that weren't happy with their Gini coefficient: https://en.wikipedia.org/wiki/Dalecarlian_rebellions https://en.wikipedia.org/wiki/Dalecarlian_rebellions
  - angra_mainyu 2y ago
    > Nordic countries are made of homogeneous populations Something like 25%-32% of Sweden is non-ethnic Swedish. Maybe once upon a time they were homogeneous, but they are probably one of the most heterogeneous countries (outside of the New World countries, which are an entirely different category), though I'd wager most of Western Europe is catching up (see: UK, France, Germany, Belgium, Spain).
DeathArrow 2y ago
Inequality is somehow a consequence of the nature. People and animals have each different traits. One is faster when running, another is cleverly ambushing prey. Trying to artificially reduce inequalities as in communism didn't yield good results as everything was reduced to the lowest common denominator.
- justinrubek 2y ago
  Let's see some concrete examples rather than bringing up communism as a general idea and claiming that it reduces inequality and that it is a bad thing. There's no substance provided for the argument you've made.
appleorchard46 2y ago
Well yes, I do assume inequality is bad. In what situations / with what values is inequality a good thing?
- esafak 2y ago
  To play the devil's advocate, one could argue you are attempting to subvert the natural order of things. Try making an argument for your case rather than shifting the burden. edit: I'm saying don't just assume it. Otherwise I can simply assume the counterposition.
  - appleorchard46 2y ago
    OP asserted that equality amongst humans is not necessarily a good thing. I am not trying to argue otherwise - not yet, at least - I am asking them to expand upon and clarify the claim as to understand better. Because I do assume equality to be a good thing; if that is an incorrect assumption I would like to know.
    - Y_Y 2y ago
      Fair enough. I do think that "equality is good" is the claim that would need to be justified if this were a formal debate, but I can give some more details on what I think. Roughly, my feeling is that perfect equality is unstable, or at least enforcing it would cost a lot more than allowing for (limited) inequality. I don't think that perfectly free markets are desirable (or efficient) but I think that how do distribute resources in a way that maintains equality while also keeping the median wellbeing high (relative to other systems) is a huge ask.
      - appleorchard46 2y ago
        It's a good thing this isn't a formal debate then, because neither I nor the paper claim equality is good nor am I debating the assertion otherwise. Thank you for the clarification, your position makes more sense now. It sounds like you're not saying there's something inherently bad about equality, but rather that the practical cost of enforcing absolute equality top-down makes it actually a net negative in well-being for the population of a state? (I can't help but point out that if there's someone with the power to enforce it, things are very far from equal - but I'm guessing you mean 'equality' more in a monetary / real goods sense)
DoneWithAllThat 2y ago
Income inequality is perforce a problem from a socialist worldview. So yes, for the sort of people who abhor capitalism, all income inequality (and class inequality) is bad.
TFYS 2y ago
Inevitability and naturalness are not valid arguments for anything, unless you think naturalness has intrinsic value. You probably don't, because then you'd be against most things humans do these days. Diseases are inevitable and natural, yet you don't see anyone rational using those facts as arguments against cures. You also seem to assume that inequality has benefits (rain is good), but we haven't really had a truly equal society since we started farming. The attempts at communism were just as if not more unequal as anything we have today. We don't know what it would be like, we just assume and we just believe the ones benefiting from inequality when they tell us how everything would fall apart if we tried to pursue such a thing. Any amount of inequality can be used as leverage to gain more power and increase inequality, so there's no way to have any natural equilibrium of inequality. People who have the most power will always seek more and be in the best position to get it. We need true equality to have an equilibrium.
- Y_Y 2y ago
  I appreciate your points, and you correctly assume that I'm not treating naturality as an intrinsic good. You may already appreciate this point, but I think that even without having a modern example of a truly equal society we can reason about what it might be like. Specifically I believe that it's been well argued (though I don't have a reference to hand) that wealth equality is an unstable equilibrium. It should follow from the tendency of inequality exacerbate itself, as you mention. Of course you can make a the equilibrium stable with a sufficient restoring force, but I haven't been convinced that such a thing is possible. I would be glad to hear ideas on that though (maybe income/wealth tax with negative rates below the average and then a sharp increase?).
  - TFYS 2y ago
    My belief is that our inability to make good decisions collectively is what causes inequality to arise. Large groups of people don't have any way of making decisions beyond very simple ones with obvious answers. Because of this the group must give decision-making power to a smaller group, and the rise of inequality begins. Before we can create an equal society without forcing it in some way, we need to figure out a system of decision-making that doesn't have to centralize power and can produce high quality decisions. Throughout history this has been impossible, but I think now with current technology it could be done if we put enough effort into it. A decision-making process in which anyone can participate, and which somehow makes sure participants have the required knowledge to make good decisions (or gathers all knowledge from participants and can figure out the good, relevant parts of it).
tokai 2y ago
Its well covered in scholarly literature that inequality reduce growth, health and social mobility, and increase violent crime. The naturalness of is meaningless, pneumonia is natural too.
- rayiner 2y ago
  The link between inequality and crime is a maybe: https://www.sciencedirect.com/science/article/pii/S0305750X23003388 https://www.sciencedirect.com/science/article/pii/S0305750X2... “To address this puzzle, I conducted a meta-analysis based on 1,341 estimates drawn from 43 studies in economics journals. The findings indicate a statistically significant but economically insignificant true effect of inequality on crime, ranging between 0.007 and 0.123 using UWLS FAT-PET and advanced methods. In essence, if there is an impact of inequality on crime, it is, at best, minimal.”
- Y_Y 2y ago
  I'm not invoking the naturalistic fallacy, I'm saying that without external intervention economies will tend towards a non-uniform distribution of wealth. If you really desired to have everyone have the same amount of wealth you'd have to continually redistribute it, at some cost. I don't know what exact scholarly literature you're referring to, but I'd guess that they're talking about local properties, i.e. starting from where we are increasing inequality would decrease growth etc. On the other hand we know from history that technological and social innovation comes for production surpluses and specialisation allowing innovation. Taxing subsistence farmers to pay scientists and philosophers is cruel, but it seems to be how societal progress comes about. If you accept that (hopefully anodyne) premise then you'll agree that starting from relative wealth equality we can (long term) increase growth and social mobility and overall wellbeing by increasing inequality.
  - tokai 2y ago
    >I'm not invoking the naturalistic fallacy But you are.
LightBug1 2y ago
I can't help but add a massive facepalm ... downvote me, I don't care.

by Y_Y 2y ago

idiotsecant 2y ago

Yes. Massive inequality is bad.

deleted 2y ago
[deleted]

RivieraKid 2y ago

The main argument against consumption inequality is that it's suboptimal in terms of average happiness / utility / well-being. If I spend $1M per month and transfer $1k of that spending to someone who spends $1k per month, average well-being would increase. In the US, the top 10% are responsible for 50% of consumption. This means that higher redistribution can increase the spending of the bottom 90% by X% at the cost of decreasing the spending of the top 10% by X% (assuming no decrease in total production). Of course, redistribution has negative effects too, I don't know what level of redistribution is optimal.

moonlet 2y ago
Well as shown by the original Communists, total redistribution just lets greedy people on the inside skim off the top. A taxation system with a properly constructed social safety net on the other hand, which is what I think you’re describing, is one where the wealthiest pay in the most and the least wealthy receive sufficient aid to get by.

findthewords 2y ago

Resource inequality and thus wealth inequality is rather bad because one person is generally unable to allocate resources efficiently after a certain point of excess. Resource inequality leads to inefficient resource allocation.

kibwen 2y ago
It's easy to see that with an unbounded amount of wealth, a single actor can keep a market irrational for an unbounded amount of time. Even with realistic (finite) amounts of wealth, this actor can keep a market irrational longer than you can remain solvent. In general, markets can only work when people are averse to the loss of money, thereby introducing a feedback mechanism. And people are only averse to the loss of money when that has material consequences for their well-being. For the ultra-wealthy today, the marginal value of every additional dollar (or million dollars) is essentially zero, so the self-balancing properties of markets are prevented from doing their job properly, namely the efficient allocation of resources.
- cyberjerkXX 2y ago
  Your statement is a general misunderstanding of how markets work. The role of the market is not to be self balanced but to facilitate trade. Markets are voluntary exchanges between individuals and organizations. Markets work because people are ultimately the best at deciding their needs and wants during a specific time.
  - kibwen 2y ago
    No, it's not strictly voluntary, because the existence of a market sets a price for a product, and materially differing from that price either puts you at a disadvantage (deprives you of voluntary trading partners) or creates opportunities for arbitrage (disadvantaging those who would otherwise voluntarily trade exclusively with you). And if your competitor has a massive pre-existing wealth advantage, they'll happily eat the loss and undercut you until you're out of business. This produces worse outcomes in the long run.
2y ago

decimalenough 2y ago

A society where everybody can create wealth ends up far richer than one where one person hoards it all. So, yes, extreme inequality is bad for everybody, even those at the top of an unequal society. Most people view the Nordics as desirable places to live and their Gini coefficient hovers around 0.3, while places with very high inequality, like Brazil and South Africa, tend to be poor and violent.

MacsHeadroom 2y ago
Nordic countries are made of homogeneous populations whose ancestors somewhat uniquely developed prosocial long term planning preferences to survive harsh winters thanks to natural selection. Nordic equality is as natural as the inequality we see everywhere else.
- Jensson 2y ago
  I think it has more to do with boat culture, when you are on the same boat you all die the same if it sinks no matter the ranks.
- dsign 2y ago
  > Nordic countries are made of homogeneous populations Once upon a time, it was so. Today, not so much. If that's a good or a bad thing, it's an entirely different can of worms. I think diversity in the Nordics is beautiful, but Japan has managed without it and they have great artisans. In the Nordics, in addition to long barbaric winters, having long barbaric Middle Ages helps foster social discipline. See what beloved King Vasa of Sweden did to peasants that weren't happy with their Gini coefficient: https://en.wikipedia.org/wiki/Dalecarlian_rebellions https://en.wikipedia.org/wiki/Dalecarlian_rebellions
- angra_mainyu 2y ago
  > Nordic countries are made of homogeneous populations Something like 25%-32% of Sweden is non-ethnic Swedish. Maybe once upon a time they were homogeneous, but they are probably one of the most heterogeneous countries (outside of the New World countries, which are an entirely different category), though I'd wager most of Western Europe is catching up (see: UK, France, Germany, Belgium, Spain).

DeathArrow 2y ago

Inequality is somehow a consequence of the nature. People and animals have each different traits. One is faster when running, another is cleverly ambushing prey. Trying to artificially reduce inequalities as in communism didn't yield good results as everything was reduced to the lowest common denominator.

justinrubek 2y ago
Let's see some concrete examples rather than bringing up communism as a general idea and claiming that it reduces inequality and that it is a bad thing. There's no substance provided for the argument you've made.

appleorchard46 2y ago

Well yes, I do assume inequality is bad. In what situations / with what values is inequality a good thing?

esafak 2y ago
To play the devil's advocate, one could argue you are attempting to subvert the natural order of things. Try making an argument for your case rather than shifting the burden. edit: I'm saying don't just assume it. Otherwise I can simply assume the counterposition.
- appleorchard46 2y ago
  OP asserted that equality amongst humans is not necessarily a good thing. I am not trying to argue otherwise - not yet, at least - I am asking them to expand upon and clarify the claim as to understand better. Because I do assume equality to be a good thing; if that is an incorrect assumption I would like to know.
  - Y_Y 2y ago
    Fair enough. I do think that "equality is good" is the claim that would need to be justified if this were a formal debate, but I can give some more details on what I think. Roughly, my feeling is that perfect equality is unstable, or at least enforcing it would cost a lot more than allowing for (limited) inequality. I don't think that perfectly free markets are desirable (or efficient) but I think that how do distribute resources in a way that maintains equality while also keeping the median wellbeing high (relative to other systems) is a huge ask.
    - appleorchard46 2y ago
      It's a good thing this isn't a formal debate then, because neither I nor the paper claim equality is good nor am I debating the assertion otherwise. Thank you for the clarification, your position makes more sense now. It sounds like you're not saying there's something inherently bad about equality, but rather that the practical cost of enforcing absolute equality top-down makes it actually a net negative in well-being for the population of a state? (I can't help but point out that if there's someone with the power to enforce it, things are very far from equal - but I'm guessing you mean 'equality' more in a monetary / real goods sense)

DoneWithAllThat 2y ago

Income inequality is perforce a problem from a socialist worldview. So yes, for the sort of people who abhor capitalism, all income inequality (and class inequality) is bad.

TFYS 2y ago

Inevitability and naturalness are not valid arguments for anything, unless you think naturalness has intrinsic value. You probably don't, because then you'd be against most things humans do these days. Diseases are inevitable and natural, yet you don't see anyone rational using those facts as arguments against cures. You also seem to assume that inequality has benefits (rain is good), but we haven't really had a truly equal society since we started farming. The attempts at communism were just as if not more unequal as anything we have today. We don't know what it would be like, we just assume and we just believe the ones benefiting from inequality when they tell us how everything would fall apart if we tried to pursue such a thing. Any amount of inequality can be used as leverage to gain more power and increase inequality, so there's no way to have any natural equilibrium of inequality. People who have the most power will always seek more and be in the best position to get it. We need true equality to have an equilibrium.

Y_Y 2y ago
I appreciate your points, and you correctly assume that I'm not treating naturality as an intrinsic good. You may already appreciate this point, but I think that even without having a modern example of a truly equal society we can reason about what it might be like. Specifically I believe that it's been well argued (though I don't have a reference to hand) that wealth equality is an unstable equilibrium. It should follow from the tendency of inequality exacerbate itself, as you mention. Of course you can make a the equilibrium stable with a sufficient restoring force, but I haven't been convinced that such a thing is possible. I would be glad to hear ideas on that though (maybe income/wealth tax with negative rates below the average and then a sharp increase?).
- TFYS 2y ago
  My belief is that our inability to make good decisions collectively is what causes inequality to arise. Large groups of people don't have any way of making decisions beyond very simple ones with obvious answers. Because of this the group must give decision-making power to a smaller group, and the rise of inequality begins. Before we can create an equal society without forcing it in some way, we need to figure out a system of decision-making that doesn't have to centralize power and can produce high quality decisions. Throughout history this has been impossible, but I think now with current technology it could be done if we put enough effort into it. A decision-making process in which anyone can participate, and which somehow makes sure participants have the required knowledge to make good decisions (or gathers all knowledge from participants and can figure out the good, relevant parts of it).

tokai 2y ago

Its well covered in scholarly literature that inequality reduce growth, health and social mobility, and increase violent crime. The naturalness of is meaningless, pneumonia is natural too.

rayiner 2y ago
The link between inequality and crime is a maybe: https://www.sciencedirect.com/science/article/pii/S0305750X23003388 https://www.sciencedirect.com/science/article/pii/S0305750X2... “To address this puzzle, I conducted a meta-analysis based on 1,341 estimates drawn from 43 studies in economics journals. The findings indicate a statistically significant but economically insignificant true effect of inequality on crime, ranging between 0.007 and 0.123 using UWLS FAT-PET and advanced methods. In essence, if there is an impact of inequality on crime, it is, at best, minimal.”
Y_Y 2y ago
I'm not invoking the naturalistic fallacy, I'm saying that without external intervention economies will tend towards a non-uniform distribution of wealth. If you really desired to have everyone have the same amount of wealth you'd have to continually redistribute it, at some cost. I don't know what exact scholarly literature you're referring to, but I'd guess that they're talking about local properties, i.e. starting from where we are increasing inequality would decrease growth etc. On the other hand we know from history that technological and social innovation comes for production surpluses and specialisation allowing innovation. Taxing subsistence farmers to pay scientists and philosophers is cruel, but it seems to be how societal progress comes about. If you accept that (hopefully anodyne) premise then you'll agree that starting from relative wealth equality we can (long term) increase growth and social mobility and overall wellbeing by increasing inequality.
- tokai 2y ago
  >I'm not invoking the naturalistic fallacy But you are.

LightBug1 2y ago

I can't help but add a massive facepalm ... downvote me, I don't care.