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I disagree that it doesn't actually do anything to impede peoples' ability to earn more for themselves. If someone handed you $50 million of tax-free money, you

I disagree that it doesn't actually do anything to impede peoples' ability to earn more for themselves. If someone handed you $50 million of tax-free money, you wouldn't go volunteer somewhere or travel or whatever instead of going into the office? Maybe ever again?

bedhead 13y ago
Something is getting lost in translation here. How does some kid inheriting a bunch of money adversely effect my or anyone else's ability to earn a better living? As distasteful as it may be that someone can win the genetic lottery, the reality is it doesn't preclude others from creating more wealth for themselves. This is one of the biggest economic misconceptions in the world...it's not a zero-sum game.
- swalkergibson 13y ago
  Oh, I thought you meant that inheriting the money did not impede their ability to create more wealth. I understand now. However, I still disagree with you. On a micro level, that is absolutely true, there is absolutely enough wealth to be created from different places that it is not a zero-sum game. That said, on a macro level, it is a zero-sum game. Your wealth had to come from someone somewhere else. Sheldon Adelson's came from people staying and gambling at his hotel. Mine comes from clients, and theirs comes from their customers. Your wealth is determined by the amount of money you can collect from other people. As far as I know, nobody is collecting wealth from a source that is not another human being. Well, except for the Federal Reserve, but that is a totally different topic.
  - bedhead 13y ago
    The rules cannot (and in fact do not) work differently on a macro and micro level. Your argument means that no one ever becomes wealthy over time because we are collectively stuck. The wealth is fixed, it just sloshes around from one party to the next. I hope it's self-evident that this is not reality. Wealth can be created, destroyed, or transferred. You seem to be confusing "collecting" and "creating". Wealth is created by people doing things that manage to satisfy demand...it's the right combination of labor and capital. This can take many forms, whether it's a guy building a casino or a starting a social network or a law firm. These are forms of creation, not transfer (or what you seem to be referring to as "collecting"). Transfer is entirely a governmental endeavor, a social mechanism for redistribution of the wealth that's actually been created. There is no labor, capital, ideas, or hard work behind it.
    - swalkergibson 13y ago
      You are right about the macro/micro point. That occurred to me during the writing of that post, but I decided to leave it in there because I was wrong and I did not want to confuse anyone else interested in the discussion. You are correct, obviously, that wealth is created by people doing things that satisfy demand. For the purposes of our discussion, wealth is measured in dollars. Let's say there are two people on earth. One has 100 dollars, the other has 0 dollars. The person with zero dollars creates some widget that the dude with 100 dollars wants and charges the other guy 80 dollars for it. Guy 1 now has 20 dollars and guy 2 now has 80 dollars. Guy 2 created his wealth (his 80 dollars) by doing/building/whatever something that guy 1 wanted. Am I thinking about this too simply? How is it possible that wealth (measured in dollars) is introduced into an economy without it coming from another participant in the market?
      - bedhead 13y ago
        I admit it's a bit abstract but here goes. Guy 2 (inventor) had to employ himself, other people, and capital in order to create the widget. He has to pay those people and the owners of the capital, and in turn they now have income which they do "stuff" with. Some of it's consumed (spent) and some is saved (invested), in each case having yet more downstream effects. Maybe Guy 2 realizes he can sell more widgets to more people but needs to employ more labor and capital in order to do so. Multiply this sort of ripple effect by a kajillion, every second of the day, and that's sort of how it works. It's never stagnant, and the more activity there is, generally speaking, the more wealth creation is taking place. But in a capitalist world, nothing is stopping anyone from being Guy 2, which is kind of my original point.
        swalkergibson 13y ago
        I see what you are saying, and after some additional reading on the subject can now see your point. I guess it breaks down for me when you actually bring dollars into the model. You are absolutely right, widgets made of resources come from the combination of those resources and ingenuity. However, in modern society, refined resources are quantified in terms of dollars and once dollars are part of the equation, it must be zero-sum because people cannot just create dollars for themselves to buy stuff. They must create stuff to convert into dollars so they can buy other stuff. You can absolutely create stuff from nothing, but that does not mean that anyone is going to buy it, which would convert it into dollar wealth.

bedhead 13y ago

Something is getting lost in translation here. How does some kid inheriting a bunch of money adversely effect my or anyone else's ability to earn a better living? As distasteful as it may be that someone can win the genetic lottery, the reality is it doesn't preclude others from creating more wealth for themselves. This is one of the biggest economic misconceptions in the world...it's not a zero-sum game.

swalkergibson 13y ago
Oh, I thought you meant that inheriting the money did not impede their ability to create more wealth. I understand now. However, I still disagree with you. On a micro level, that is absolutely true, there is absolutely enough wealth to be created from different places that it is not a zero-sum game. That said, on a macro level, it is a zero-sum game. Your wealth had to come from someone somewhere else. Sheldon Adelson's came from people staying and gambling at his hotel. Mine comes from clients, and theirs comes from their customers. Your wealth is determined by the amount of money you can collect from other people. As far as I know, nobody is collecting wealth from a source that is not another human being. Well, except for the Federal Reserve, but that is a totally different topic.
- bedhead 13y ago
  The rules cannot (and in fact do not) work differently on a macro and micro level. Your argument means that no one ever becomes wealthy over time because we are collectively stuck. The wealth is fixed, it just sloshes around from one party to the next. I hope it's self-evident that this is not reality. Wealth can be created, destroyed, or transferred. You seem to be confusing "collecting" and "creating". Wealth is created by people doing things that manage to satisfy demand...it's the right combination of labor and capital. This can take many forms, whether it's a guy building a casino or a starting a social network or a law firm. These are forms of creation, not transfer (or what you seem to be referring to as "collecting"). Transfer is entirely a governmental endeavor, a social mechanism for redistribution of the wealth that's actually been created. There is no labor, capital, ideas, or hard work behind it.
  - swalkergibson 13y ago
    You are right about the macro/micro point. That occurred to me during the writing of that post, but I decided to leave it in there because I was wrong and I did not want to confuse anyone else interested in the discussion. You are correct, obviously, that wealth is created by people doing things that satisfy demand. For the purposes of our discussion, wealth is measured in dollars. Let's say there are two people on earth. One has 100 dollars, the other has 0 dollars. The person with zero dollars creates some widget that the dude with 100 dollars wants and charges the other guy 80 dollars for it. Guy 1 now has 20 dollars and guy 2 now has 80 dollars. Guy 2 created his wealth (his 80 dollars) by doing/building/whatever something that guy 1 wanted. Am I thinking about this too simply? How is it possible that wealth (measured in dollars) is introduced into an economy without it coming from another participant in the market?
    - bedhead 13y ago
      I admit it's a bit abstract but here goes. Guy 2 (inventor) had to employ himself, other people, and capital in order to create the widget. He has to pay those people and the owners of the capital, and in turn they now have income which they do "stuff" with. Some of it's consumed (spent) and some is saved (invested), in each case having yet more downstream effects. Maybe Guy 2 realizes he can sell more widgets to more people but needs to employ more labor and capital in order to do so. Multiply this sort of ripple effect by a kajillion, every second of the day, and that's sort of how it works. It's never stagnant, and the more activity there is, generally speaking, the more wealth creation is taking place. But in a capitalist world, nothing is stopping anyone from being Guy 2, which is kind of my original point.
      - swalkergibson 13y ago
        I see what you are saying, and after some additional reading on the subject can now see your point. I guess it breaks down for me when you actually bring dollars into the model. You are absolutely right, widgets made of resources come from the combination of those resources and ingenuity. However, in modern society, refined resources are quantified in terms of dollars and once dollars are part of the equation, it must be zero-sum because people cannot just create dollars for themselves to buy stuff. They must create stuff to convert into dollars so they can buy other stuff. You can absolutely create stuff from nothing, but that does not mean that anyone is going to buy it, which would convert it into dollar wealth.