5 ms·

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

by 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.
    - graemep 9mo ago
      I do not think rich people are accumulating wealth because they are following Marx.
  - 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.

by vidarh 9mo ago

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.
  - graemep 9mo ago
    I do not think rich people are accumulating wealth because they are following Marx.
- 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.