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> And why do you care about inequality, and not eg the absolute livings standards of the least well off? The two are connected. You can either transfer more we

> And why do you care about inequality, and not eg the absolute livings standards of the least well off? The two are connected. You can either transfer more wealth to the poorer people without taxing the rich (lets say by helicopter money), or transfer it from the rich to the poor. In both cases the rich become less rich in relative terms. It should also make intuitive sense - if the rich (lets say top 5%) hold 95% of wealth it means there is less for everyone else - less wealth that is because the resources like land, apartments and good education are finite and not abundant.

Kinrany 1y ago
You can of course create wealth in such a way that inequality stays the same. Not all types of wealth are finite for practical purposes.
- psb217 1y ago
  But, if empirically our current system for net wealth creation tends to also produce wealth concentration, it makes sense to consider ways of modifying the system to mitigate some of the wealth concentration while maintaining as much of the wealth creation as possible.
  - eru 1y ago
    The target you should look for is how much wealth gets created for the least well-off (or for some low percentile representative person). Just don't worry about what the rich people doing at all. No need to punish them.
    - voidhorse 1y ago
      Where is the "wealth created for the least well off" going to come from? Necessarily, that must be wealth that did' go to the rich instead (it could have!). So, necessarily, you are "punishing" them by doing so. You mainly seem to be against some kind of hypothetical robinhoodesque style redistribution because you worry it's unfair to the rich. Any solution, though, will have to take this shape, whether it targets the existing wealth or wealth generated going forward. It's all about redistribution of access no matter how you slice You don't need to be so protective of the rich. They are doing just fine and they have plenty of resource and mechanisms in place to protect themselves. If the world's wealthiest people were made even just a tiny bit less wealth by redistribution of assets they would still be living like absolute kings.
      - eru 1y ago
        > Where is the "wealth created for the least well off" going to come from? Well, mostly where everyone's wealth is coming from: from the fruits of their own labour. > You mainly seem to be against some kind of hypothetical robinhoodesque style redistribution because you worry it's unfair to the rich. No, I haven't started worrying about fairness, yet. No, I'm afraid that a tax system designed by what sounds good instead of what works will leave the poor even worse off. Check out https://en.wikipedia.org/wiki/Tax_incidence https://en.wikipedia.org/wiki/Tax_incidence for an example: who you officially levy the taxes on isn't necessarily the person shouldering the economic burden.
        johnecheck 1y ago
        Only tiny fraction of a billionaire's wealth tends to be the fruit of their personal labor. It's the labor of their employees and machines that create the wealth. To my understanding, this is broadly accepted. Now, billionaires do supply a different key ingredient to the wealth creation - risk. Without investment and risk, wealth cannot be created. In terms of $ investment, billionaires take on the vast majority of the risk and deserve the bulk of the rewards, the argument goes. Workers take on far less risk with their guaranteed* paycheck . But which is the bigger risk? A billionaire's $100,000,000? Or your home, your health, and your retirement savings were you to lose your job in a bad market? I'm interested in company structures that incentivize distributing risk, profit, and power across a larger group than we tend to see in modern companies.
        eru 1y ago
        > I'm interested in company structures that incentivize distributing risk, profit, and power across a larger group than we tend to see in modern companies. Please feel free to start your own company or cooperative.
        johnecheck 1y ago
        Working on it ;)
        1y ago
    - andrepd 1y ago
      You clearly believe you're very objective and applying very "rational" thinking to the problem. It's about the dollar value of the income of the least well-off, so what are these stupid people even talking about inequality? Don't they realise making a poor person 10% worse off and Bezos 11% worse off reduces inequality but lowers the floor (the pedestrian argument you've made several times in this thread)? But please consider that the problem is slightly (i.e. a lot) more complicated than you think. Economics is a very very hard discipline and perhaps more closely related to philosophy than the natural sciences. There have been countless books written on the topic of inequality by people smarter than you or me, so it's highly it's all so simple as your dismissive "just do X" line imagines it to be. A simple, almost trivial observation: very high inequality of wealth also means very high inequality of power, meaning the rich elite can and will influence the political process to enrich themselves further at the expense of the "low percentile" less well-off, which will be denied political power. This is one example of why you should care about inequality.
      - eru 1y ago
        > But please consider that the problem is slightly (i.e. a lot) more complicated than you think. Economics is a very very hard discipline [...] Yes, and that's why I am saying that it's far from an obvious conclusion that making rich people worse off is a good thing for poor people. And once you admit that this ain't trivial, you can look at topics like deadweight losses or tax incidence. Different tax and redistribution system have different effects. It's not just 'more tax = more revenue to redistribute'. For example, I actually think you can drive overall tax rates (eg as percentage of GDP) a lot higher than they are today in most countries without harming the economy, _if_ you switch to something as efficient as land value taxes for the vast majority of your government revenue (and lower other taxes). Property taxes are a second best approximation. In contrast, capital gains taxes and income taxes are less efficient. Tariffs are even worse (by a large margin!), even if they could theoretically raise some revenue. Stamp duties or other taxes on transactions are also pretty bad. And silly things like price controls just hurt the economy without raising any revenue at all. But that's all vastly simplified. As you suggest, there's lots of theory and practice you can investigate for the actual effects. They might also differ in different times and places. > There have been countless books written on the topic of inequality by people smarter than you or me, so it's highly it's all so simple as your dismissive "just do X" line imagines it to be. That's why I'm saying exactly the opposite: I'm arguing against the naive 'just tax the rich'.
eru 1y ago
> You can either transfer more wealth to the poorer people without taxing the rich (lets say by helicopter money), [...] Helicopter money transfers real wealth from the people who previously held cash. It creates nominal wealth, but not real wealth. > It should also make intuitive sense - if the rich (lets say top 5%) hold 95% of wealth it means there is less for everyone else - less wealth that is because the resources like land, apartments and good education are finite and not abundant. Let's invert that: if I make everyone's lives 10% more miserable, but the lives of the richest 1% a whopping 20% more miserable, that will have decreased inequality. But it's not a good idea. That's basically just the idea from https://news.ycombinator.com/item?id=44411538 https://news.ycombinator.com/item?id=44411538 inverted. Many people have a hard time seeing that wealth can increase, but it's pretty easy to see that total wealth can decrease: I can set fire to my piano, and no one else gets any better because of it.
- voidhorse 1y ago
  > Let's invert that: if I make everyone's lives 10% more miserable, but the lives of the richest 1% a whopping 20% more miserable, that will have decreased inequality. But it's not a good idea. You are conflating two different things, wealth and misery. Wealth is about material resources not misery or happiness. This is about giving more people access to more material resources by taking away some of the exclusive access to those resource by the rich. Will preventing the uber rich families from buying their seventeenth fleet of housing complexes and their twentieth estate make them "more miserable" sure, probably, but it also secures the independence of the people you make that house available to (rather than make them permanent wage slaves to the landed class that just scoops up homes that they don't materially need need to extract rents etc).
  - xienze 1y ago
    > This is about giving more people access to more material resources by taking away some of the exclusive access to those resource by the rich. You realize most of this wealth is tied up in stocks and other assets that anyone can purchase, right? > Will preventing the uber rich families from buying their seventeenth fleet of housing complexes But ARE the likes of Bezos and Musk actually buying housing complexes in the first place, nevermind ones that anyone who isn’t already rich are able to afford? > and their twentieth estate And who but the extremely rich would be able to buy these estates in the first place?

Kinrany 1y ago

You can of course create wealth in such a way that inequality stays the same. Not all types of wealth are finite for practical purposes.

psb217 1y ago
But, if empirically our current system for net wealth creation tends to also produce wealth concentration, it makes sense to consider ways of modifying the system to mitigate some of the wealth concentration while maintaining as much of the wealth creation as possible.
- eru 1y ago
  The target you should look for is how much wealth gets created for the least well-off (or for some low percentile representative person). Just don't worry about what the rich people doing at all. No need to punish them.
  - voidhorse 1y ago
    Where is the "wealth created for the least well off" going to come from? Necessarily, that must be wealth that did' go to the rich instead (it could have!). So, necessarily, you are "punishing" them by doing so. You mainly seem to be against some kind of hypothetical robinhoodesque style redistribution because you worry it's unfair to the rich. Any solution, though, will have to take this shape, whether it targets the existing wealth or wealth generated going forward. It's all about redistribution of access no matter how you slice You don't need to be so protective of the rich. They are doing just fine and they have plenty of resource and mechanisms in place to protect themselves. If the world's wealthiest people were made even just a tiny bit less wealth by redistribution of assets they would still be living like absolute kings.
    - eru 1y ago
      > Where is the "wealth created for the least well off" going to come from? Well, mostly where everyone's wealth is coming from: from the fruits of their own labour. > You mainly seem to be against some kind of hypothetical robinhoodesque style redistribution because you worry it's unfair to the rich. No, I haven't started worrying about fairness, yet. No, I'm afraid that a tax system designed by what sounds good instead of what works will leave the poor even worse off. Check out https://en.wikipedia.org/wiki/Tax_incidence https://en.wikipedia.org/wiki/Tax_incidence for an example: who you officially levy the taxes on isn't necessarily the person shouldering the economic burden.
      - johnecheck 1y ago
        Only tiny fraction of a billionaire's wealth tends to be the fruit of their personal labor. It's the labor of their employees and machines that create the wealth. To my understanding, this is broadly accepted. Now, billionaires do supply a different key ingredient to the wealth creation - risk. Without investment and risk, wealth cannot be created. In terms of $ investment, billionaires take on the vast majority of the risk and deserve the bulk of the rewards, the argument goes. Workers take on far less risk with their guaranteed* paycheck . But which is the bigger risk? A billionaire's $100,000,000? Or your home, your health, and your retirement savings were you to lose your job in a bad market? I'm interested in company structures that incentivize distributing risk, profit, and power across a larger group than we tend to see in modern companies.
        eru 1y ago
        > I'm interested in company structures that incentivize distributing risk, profit, and power across a larger group than we tend to see in modern companies. Please feel free to start your own company or cooperative.
        johnecheck 1y ago
        Working on it ;)
        1y ago
  - andrepd 1y ago
    You clearly believe you're very objective and applying very "rational" thinking to the problem. It's about the dollar value of the income of the least well-off, so what are these stupid people even talking about inequality? Don't they realise making a poor person 10% worse off and Bezos 11% worse off reduces inequality but lowers the floor (the pedestrian argument you've made several times in this thread)? But please consider that the problem is slightly (i.e. a lot) more complicated than you think. Economics is a very very hard discipline and perhaps more closely related to philosophy than the natural sciences. There have been countless books written on the topic of inequality by people smarter than you or me, so it's highly it's all so simple as your dismissive "just do X" line imagines it to be. A simple, almost trivial observation: very high inequality of wealth also means very high inequality of power, meaning the rich elite can and will influence the political process to enrich themselves further at the expense of the "low percentile" less well-off, which will be denied political power. This is one example of why you should care about inequality.
    - eru 1y ago
      > But please consider that the problem is slightly (i.e. a lot) more complicated than you think. Economics is a very very hard discipline [...] Yes, and that's why I am saying that it's far from an obvious conclusion that making rich people worse off is a good thing for poor people. And once you admit that this ain't trivial, you can look at topics like deadweight losses or tax incidence. Different tax and redistribution system have different effects. It's not just 'more tax = more revenue to redistribute'. For example, I actually think you can drive overall tax rates (eg as percentage of GDP) a lot higher than they are today in most countries without harming the economy, _if_ you switch to something as efficient as land value taxes for the vast majority of your government revenue (and lower other taxes). Property taxes are a second best approximation. In contrast, capital gains taxes and income taxes are less efficient. Tariffs are even worse (by a large margin!), even if they could theoretically raise some revenue. Stamp duties or other taxes on transactions are also pretty bad. And silly things like price controls just hurt the economy without raising any revenue at all. But that's all vastly simplified. As you suggest, there's lots of theory and practice you can investigate for the actual effects. They might also differ in different times and places. > There have been countless books written on the topic of inequality by people smarter than you or me, so it's highly it's all so simple as your dismissive "just do X" line imagines it to be. That's why I'm saying exactly the opposite: I'm arguing against the naive 'just tax the rich'.

eru 1y ago

> You can either transfer more wealth to the poorer people without taxing the rich (lets say by helicopter money), [...] Helicopter money transfers real wealth from the people who previously held cash. It creates nominal wealth, but not real wealth. > It should also make intuitive sense - if the rich (lets say top 5%) hold 95% of wealth it means there is less for everyone else - less wealth that is because the resources like land, apartments and good education are finite and not abundant. Let's invert that: if I make everyone's lives 10% more miserable, but the lives of the richest 1% a whopping 20% more miserable, that will have decreased inequality. But it's not a good idea. That's basically just the idea from https://news.ycombinator.com/item?id=44411538 https://news.ycombinator.com/item?id=44411538 inverted. Many people have a hard time seeing that wealth can increase, but it's pretty easy to see that total wealth can decrease: I can set fire to my piano, and no one else gets any better because of it.

voidhorse 1y ago
> Let's invert that: if I make everyone's lives 10% more miserable, but the lives of the richest 1% a whopping 20% more miserable, that will have decreased inequality. But it's not a good idea. You are conflating two different things, wealth and misery. Wealth is about material resources not misery or happiness. This is about giving more people access to more material resources by taking away some of the exclusive access to those resource by the rich. Will preventing the uber rich families from buying their seventeenth fleet of housing complexes and their twentieth estate make them "more miserable" sure, probably, but it also secures the independence of the people you make that house available to (rather than make them permanent wage slaves to the landed class that just scoops up homes that they don't materially need need to extract rents etc).
- xienze 1y ago
  > This is about giving more people access to more material resources by taking away some of the exclusive access to those resource by the rich. You realize most of this wealth is tied up in stocks and other assets that anyone can purchase, right? > Will preventing the uber rich families from buying their seventeenth fleet of housing complexes But ARE the likes of Bezos and Musk actually buying housing complexes in the first place, nevermind ones that anyone who isn’t already rich are able to afford? > and their twentieth estate And who but the extremely rich would be able to buy these estates in the first place?