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The ratio of spending is a poor metric to measure equality. All it really shows is that the “poor” are getting milked for everything they earn and own. Energy c

The ratio of spending is a poor metric to measure equality. All it really shows is that the “poor” are getting milked for everything they earn and own. Energy costs, fuel, water, basics like bread and butter, insurance, even doing something nice - all at sky-high prices driven by nothing else but greed. Oh, and farewell to the middle class…

vidarh 9mo ago
Yeah, that struck me too. Measuring wealth by spending disguises inequality because higher earners have less reason to spend more, and the difference in freedom to choose not to spend more is a large part of the inequality. There are interesting aspects to the data, but they overstate what the numbers they present tell us about inequality.
- simianwords 9mo ago
  What would you rather use then? Ultimately you have money to spend right? What other point?
  - graemep 9mo ago
    Power. Why do you think people who already have huge amounts of money want more? Money is a way of acquiring power. That is why billionaires typically give money away by putting it in foundations they control (so they keep the power) rather than just giving it to poor people (which would be more effective as people could spend it on what they most need).
    - daymanstep 9mo ago
      Marx said that concentration of wealth can be a good thing as rich people can invest their money in capital heavy things, such as factories, whereas poor people tend not to do that.
      - vidarh 9mo ago
        Despite the common image, Marx was a huge fan of capitalism. He thought it was a huge step forward, and not least that capitalism was an absolute necessity to bring production to a level where he believed socialism would become possible... He just also thought it had flaws that he believed would eventually make it obsolete.
        Gud 9mo ago
        Yeah, typically people don’t understand the point of Marx at all. He saw capitalism as a natural and necessary step before developing communism. Hence why most criticism of soviet and Chinese communism is fundamentally flawed, since they tried to develop communism in feudal societies. FWIW I am libertarian leaning, but it is obvious to me capitalism has obvious defects that must be either compensated for, or be done away with entirely.
        kjshsh123 9mo ago
        Capitalism and socialism is a false ideological dichotomy. Mr. Beat has a good video on this. We live in a mixed economy. Not to fall into the "communism is when free stuff" trope, but... Most people like public schools, public roads, public transit, public parks, and public libraries. The benefits of public goods are well known. This is the whole field of public finance economics. Market failures are also well-known. Negative externalities, moral hazard, adverse selection etc. Hence carbon taxes, congestion charges, and universal healthcare. In other words, sometimes free trade capitalism works, other times it doesn't, and it's not a mystery when. Marx's whole spiel about contradictions is wrong and largely throws the baby out with the bath water, so to speak.
        vidarh 9mo ago
        The notion of a "mixed economy" is really orthogonal to Marx arguments over capitalism, though it is relevant to other socialist ideologues. To Marx, what mattered was the dominant "mode of production", and the result power dynamic resulting from that. The existence of public services doesn't change that. A socialist system with a free market remains socialist. A capitalist system with public services remain capitalist. Calling either "mixed" doesn't alter what the dominant mode of production is. As for Marx "spiel about contradictions", all he did was take capitalists seriously on the notion that competition in a truly free market will tend to drive down margins once the market is fully exploited. One can certainly disagree with his conclusions over the consequences of that - e.g. whether societies will succeed in continuing to mitigate the negative effects, or end up in crises, but the core theory of Marx on capitalism was that competition and markets works as advertised.
    - simianwords 9mo ago
      power is one aspect but i think it is valid for billionaires to have power. buying goods is the other aspect and the poor and the rich more or less consume similarly. i do want to live in the world where money doesn't dictate _consumption_ as much as power. money has to mean something, and its good that it goes into power more than consumption. that means the poor can have a dignified life to buy what they want but they don't get to dictate how money will be allocated.
      - atmavatar 9mo ago
        > power is one aspect but i think it is valid for billionaires to have power. Why? Owning a lot of wealth says little about how effectively you can wield power or whether you'll use said power to benefit all or just yourself.
  - vidarh 9mo ago
    Income. Wealth. The point is that the unspent income has significant value. I earn a multiple of the UK median. Above a lower multiple of the median, the primary increased value I got out of earning more was the freedom to stop thinking about what an increasing subset of things cost. I still need to think about what my housing cost, but I don't know what most groceries cost, because it doesn't matter to me. The mental cost of detail budgeting, planning, and saving for most smaller costs, as well as the associated anxiety, is something I never want to pay again. My actual spending thus tells a flawed story about the advantage I have over someone earning less.
- graemep 9mo ago
  It also ignores a similar phenomenon among the poor. Decreased self-supply. In a rich country this might mean paying for childcare so you can work. Your expenditure has gone up, but you are only better off by the increased post tax income less the cost of childcare. Even worse is paid childcare has substituted for family provided (e.g. grandparents) childcare. In a poor country it might mean buying food instead of growing it. An industrial worker will buy their food, a subsistence farmer will grow their own. There is a huge increase in expenditure, but they might well end up with a worse diet. This is not new. The initial workforce for the industrialisation of Britain (the first country to industrialise) was available because of the enclosure of common land forced people to seek work in cities.
  - palmotea 9mo ago
    > In a rich country this might mean paying for childcare so you can work. Your expenditure has gone up, but you are only better off by the increased post tax income less the cost of childcare. Even worse is paid childcare has substituted for family provided (e.g. grandparents) childcare. That's a pretty clear illustration of the myopia of excessively quantitative economic thinking. The economist looks at easily-quantified numbers: WAGES - CHILDCARE_EXPENSE = POSITIVE_NUMBER, and concludes "PROFIT! EVERYONE WINS!" But the hard-to-quantify negatives are completely ignored: the poorer relationship between the kids and parents, negative psychological effects on the kids due to day care, etc. That's especially true when talking about things in aggregate.
    - graemep 9mo ago
      I very much agree with you (and that is reflected in my own life choices), but that is a different point. My point is that people are not even as much financially better off as the numbers say.
simianwords 9mo ago
Spending is the best way to measure prosperity. What else would you use? If a billionaire has similar health care, eats similar food and buys similar phones, then in reality they are actually quite similar to the poor.
- 123malware321 9mo ago
  if you think someone with 1B is the same as someone with every month a minus number on their account then you are deluded. A good measure of prosperity is quality of life, which sadly in our wonderful civilization one needs to buy with money. And a little note. Billionaires do not eat the same food, do not take the same healthcare, and do not buy similar consumer goods for the most part. Maybe they will get the iPhone, but if you think a poor person can afford an iPhone maybe you also don't really understand what it is to be poor. Poor people fighting hungerpains working their shit jobs. Poor people suffer from mental ailments induced by the stresses of being poor. There is no parallel.
  - simianwords 9mo ago
    how do you want to measure it? >A good measure of prosperity is quality of life, which sadly in our wonderful civilization one needs to buy with money. how do you propose measuring quality of life? by how the billionaire spends money right? that's exactly what they have done here.
- Arun2009 9mo ago
  This is as disingenuous as saying that both the rich and the poor consume the same amounts of calories, nutrients, oxygen and water, and hence they are not that different. The key issue is that money often translates to such things as power and leisure. Prosperity is not consumption - it is the command over power, resources and time. The poor have to sell their time in order to afford the basic necessities of life; the rich don't have to. So the rich have a lot more free time than the poor and the resources to use it well. The rich simply are freer than the poor, who are not unlike prisoners with no claim over their time. The rich also get to influence policies to a far greater extent than the poor. In a way, wealth is just stored influence. This in turn helps them perpetuate their privilege. For instance, they can fund narratives that normalize inequality and lobby for lower taxes. The lives of the rich are also far more secure than the lives of the poor. Many poor people are one major life crisis away from penury. This significantly affects the quality of their lives. Access to more wealth would mitigate this. One could also flip your argument as follows: wealth is a scarce resource. If the rich already have everything they need to live a happy life at low amounts of wealth, then letting them horde more wealth than necessary is unjustified. Instead, that should be distributed to those in need. This would make no difference to the well-being of the wealthy, but it would help others who need resources more.
roadbuster 9mo ago
> All it really shows is that the “poor” are getting milked for everything they earn and own How are you concluding that? The only way I can see that could be true is if the bottom 50% has shifted their meagre savings to spending in an effort to stay afloat. I find this to be dubious because the bottom 50% was never saving much at all in the first place. For context, the median income across planet earth is $850 USD _per year._ There's not a lot of room at the bottom for savings.
- deleted 9mo ago
  [deleted]
sceptic123 9mo ago
Seems like you need these kind of overly simplistic takes to get people to engage with this topic No-one's interested in a detailed report: https://news.ycombinator.com/from?site=wid.world https://news.ycombinator.com/from?site=wid.world
readthenotes1 9mo ago
I think the world you're talking about would be the intra country comparison which bears out what your saying. What the article is talking about is intercountry comparisons where, for instance, India as a nation now spends a lot more than it used to, and seeing as how they used to have nothing it means they probably have something now.

vidarh 9mo ago

Yeah, that struck me too. Measuring wealth by spending disguises inequality because higher earners have less reason to spend more, and the difference in freedom to choose not to spend more is a large part of the inequality. There are interesting aspects to the data, but they overstate what the numbers they present tell us about inequality.

simianwords 9mo ago
What would you rather use then? Ultimately you have money to spend right? What other point?
- graemep 9mo ago
  Power. Why do you think people who already have huge amounts of money want more? Money is a way of acquiring power. That is why billionaires typically give money away by putting it in foundations they control (so they keep the power) rather than just giving it to poor people (which would be more effective as people could spend it on what they most need).
  - daymanstep 9mo ago
    Marx said that concentration of wealth can be a good thing as rich people can invest their money in capital heavy things, such as factories, whereas poor people tend not to do that.
    - vidarh 9mo ago
      Despite the common image, Marx was a huge fan of capitalism. He thought it was a huge step forward, and not least that capitalism was an absolute necessity to bring production to a level where he believed socialism would become possible... He just also thought it had flaws that he believed would eventually make it obsolete.
      - Gud 9mo ago
        Yeah, typically people don’t understand the point of Marx at all. He saw capitalism as a natural and necessary step before developing communism. Hence why most criticism of soviet and Chinese communism is fundamentally flawed, since they tried to develop communism in feudal societies. FWIW I am libertarian leaning, but it is obvious to me capitalism has obvious defects that must be either compensated for, or be done away with entirely.
        kjshsh123 9mo ago
        Capitalism and socialism is a false ideological dichotomy. Mr. Beat has a good video on this. We live in a mixed economy. Not to fall into the "communism is when free stuff" trope, but... Most people like public schools, public roads, public transit, public parks, and public libraries. The benefits of public goods are well known. This is the whole field of public finance economics. Market failures are also well-known. Negative externalities, moral hazard, adverse selection etc. Hence carbon taxes, congestion charges, and universal healthcare. In other words, sometimes free trade capitalism works, other times it doesn't, and it's not a mystery when. Marx's whole spiel about contradictions is wrong and largely throws the baby out with the bath water, so to speak.
        vidarh 9mo ago
        The notion of a "mixed economy" is really orthogonal to Marx arguments over capitalism, though it is relevant to other socialist ideologues. To Marx, what mattered was the dominant "mode of production", and the result power dynamic resulting from that. The existence of public services doesn't change that. A socialist system with a free market remains socialist. A capitalist system with public services remain capitalist. Calling either "mixed" doesn't alter what the dominant mode of production is. As for Marx "spiel about contradictions", all he did was take capitalists seriously on the notion that competition in a truly free market will tend to drive down margins once the market is fully exploited. One can certainly disagree with his conclusions over the consequences of that - e.g. whether societies will succeed in continuing to mitigate the negative effects, or end up in crises, but the core theory of Marx on capitalism was that competition and markets works as advertised.
  - simianwords 9mo ago
    power is one aspect but i think it is valid for billionaires to have power. buying goods is the other aspect and the poor and the rich more or less consume similarly. i do want to live in the world where money doesn't dictate _consumption_ as much as power. money has to mean something, and its good that it goes into power more than consumption. that means the poor can have a dignified life to buy what they want but they don't get to dictate how money will be allocated.
    - atmavatar 9mo ago
      > power is one aspect but i think it is valid for billionaires to have power. Why? Owning a lot of wealth says little about how effectively you can wield power or whether you'll use said power to benefit all or just yourself.
- vidarh 9mo ago
  Income. Wealth. The point is that the unspent income has significant value. I earn a multiple of the UK median. Above a lower multiple of the median, the primary increased value I got out of earning more was the freedom to stop thinking about what an increasing subset of things cost. I still need to think about what my housing cost, but I don't know what most groceries cost, because it doesn't matter to me. The mental cost of detail budgeting, planning, and saving for most smaller costs, as well as the associated anxiety, is something I never want to pay again. My actual spending thus tells a flawed story about the advantage I have over someone earning less.
graemep 9mo ago
It also ignores a similar phenomenon among the poor. Decreased self-supply. In a rich country this might mean paying for childcare so you can work. Your expenditure has gone up, but you are only better off by the increased post tax income less the cost of childcare. Even worse is paid childcare has substituted for family provided (e.g. grandparents) childcare. In a poor country it might mean buying food instead of growing it. An industrial worker will buy their food, a subsistence farmer will grow their own. There is a huge increase in expenditure, but they might well end up with a worse diet. This is not new. The initial workforce for the industrialisation of Britain (the first country to industrialise) was available because of the enclosure of common land forced people to seek work in cities.
- palmotea 9mo ago
  > In a rich country this might mean paying for childcare so you can work. Your expenditure has gone up, but you are only better off by the increased post tax income less the cost of childcare. Even worse is paid childcare has substituted for family provided (e.g. grandparents) childcare. That's a pretty clear illustration of the myopia of excessively quantitative economic thinking. The economist looks at easily-quantified numbers: WAGES - CHILDCARE_EXPENSE = POSITIVE_NUMBER, and concludes "PROFIT! EVERYONE WINS!" But the hard-to-quantify negatives are completely ignored: the poorer relationship between the kids and parents, negative psychological effects on the kids due to day care, etc. That's especially true when talking about things in aggregate.
  - graemep 9mo ago
    I very much agree with you (and that is reflected in my own life choices), but that is a different point. My point is that people are not even as much financially better off as the numbers say.

simianwords 9mo ago

Spending is the best way to measure prosperity. What else would you use? If a billionaire has similar health care, eats similar food and buys similar phones, then in reality they are actually quite similar to the poor.

123malware321 9mo ago
if you think someone with 1B is the same as someone with every month a minus number on their account then you are deluded. A good measure of prosperity is quality of life, which sadly in our wonderful civilization one needs to buy with money. And a little note. Billionaires do not eat the same food, do not take the same healthcare, and do not buy similar consumer goods for the most part. Maybe they will get the iPhone, but if you think a poor person can afford an iPhone maybe you also don't really understand what it is to be poor. Poor people fighting hungerpains working their shit jobs. Poor people suffer from mental ailments induced by the stresses of being poor. There is no parallel.
- simianwords 9mo ago
  how do you want to measure it? >A good measure of prosperity is quality of life, which sadly in our wonderful civilization one needs to buy with money. how do you propose measuring quality of life? by how the billionaire spends money right? that's exactly what they have done here.
Arun2009 9mo ago
This is as disingenuous as saying that both the rich and the poor consume the same amounts of calories, nutrients, oxygen and water, and hence they are not that different. The key issue is that money often translates to such things as power and leisure. Prosperity is not consumption - it is the command over power, resources and time. The poor have to sell their time in order to afford the basic necessities of life; the rich don't have to. So the rich have a lot more free time than the poor and the resources to use it well. The rich simply are freer than the poor, who are not unlike prisoners with no claim over their time. The rich also get to influence policies to a far greater extent than the poor. In a way, wealth is just stored influence. This in turn helps them perpetuate their privilege. For instance, they can fund narratives that normalize inequality and lobby for lower taxes. The lives of the rich are also far more secure than the lives of the poor. Many poor people are one major life crisis away from penury. This significantly affects the quality of their lives. Access to more wealth would mitigate this. One could also flip your argument as follows: wealth is a scarce resource. If the rich already have everything they need to live a happy life at low amounts of wealth, then letting them horde more wealth than necessary is unjustified. Instead, that should be distributed to those in need. This would make no difference to the well-being of the wealthy, but it would help others who need resources more.

roadbuster 9mo ago

> All it really shows is that the “poor” are getting milked for everything they earn and own How are you concluding that? The only way I can see that could be true is if the bottom 50% has shifted their meagre savings to spending in an effort to stay afloat. I find this to be dubious because the bottom 50% was never saving much at all in the first place. For context, the median income across planet earth is $850 USD _per year._ There's not a lot of room at the bottom for savings.

deleted 9mo ago
[deleted]

sceptic123 9mo ago

Seems like you need these kind of overly simplistic takes to get people to engage with this topic No-one's interested in a detailed report: https://news.ycombinator.com/from?site=wid.world https://news.ycombinator.com/from?site=wid.world

readthenotes1 9mo ago

I think the world you're talking about would be the intra country comparison which bears out what your saying. What the article is talking about is intercountry comparisons where, for instance, India as a nation now spends a lot more than it used to, and seeing as how they used to have nothing it means they probably have something now.