5 ms·

Inequality worse now than on ‘Downton Abbey’

25 points by fraqed 13y ago

ataggart 13y ago
Strange how articles like this aren't taken as an argument against the utility of "inequality". Does anyone think that the poor of today would be better off in Czarist Russia? [1] I also find it interesting that "inequality" is based solely on "share of national income", as if there is just this big pile of ex nihilo money being apportioned out unfairly. [1] http://annualletter.gatesfoundation.org/~/media/Annual%20Letter%202014/Myth%201/Myth1Info1_Curves_Final_EN_0122.jpg http://annualletter.gatesfoundation.org/~/media/Annual%20Let...
- deleted 13y ago
  [deleted]
- JonnieCache 13y ago
  >as if there is just this big pile of ex nihilo money being apportioned out unfairly. I get the whole "wealth is not zero sum" thing, I can see how it applies at the level of a whole economy. However, at the level of an individual company, there is a finite amount of revenue, and it is divided up in a zero sum fashion. When workers see their own pay going down while the bosses pay leaps by hundreds of percent, all that stuff about fallacious piles of money doesnt really make sense.
- rbehrends 13y ago
  Just because the situation has improved with respect to absolute poverty doesn't mean that relative poverty isn't a problem, too. It's just a different kind of problem. First, rising income inequality/relative poverty is economically harmful. It's simply not sustainable forever, especially in the consumer economy that the US has. Capital gains in particular cannot continue to exceed general economic growth without something eventually giving. Second, relative poverty creates social exclusion, leading to social stratification, low social mobility, and a whole host of related problems. This is probably best seen in the rising cost of college tuition in the US, creating an ever higher barrier for access to the middle class (admittedly, exacerbated by the fact that the US has no VET system worth speaking of). Perversely, where the affluent European countries invest in the education of their citizens, some US states seem to try and position themselves as low-wage alternatives to Mexico and China. Especially considering the ever-increasing levels of automation, this is all kinds of crazy. Also, with respect to absolute poverty, while the American poor have it generally better than serfs in Czarist Russia or most of the people in your average third world country (not a very high bar, of course), there's still plenty of hunger and homelessness in the US.
  - yummyfajitas 13y ago
    Second, relative poverty creates social exclusion, leading to social stratification, low social mobility, and a whole host of related problems. This is probably best seen in the rising cost of college tuition in the US, creating an ever higher barrier for access to the middle class... If I gave you data showing that college consumption is at an all time high and mobility remains unchanged, in spite of a large increase in inequality, would that convince you your beliefs are incorrect? If not, what data (if any) would cause you to change your beliefs? http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf
    - rbehrends 13y ago
      Maybe you want to reconsider yours? I'm contrasting the US with comparatively affluent European countries; US social mobility has been comparatively low for quite some time, but inequality (as measured by the after-tax Gini) hasn't risen all that much over the past two decades, either; it's gotten slightly worse, but not massively. I'm talking about college tuition as a symptom here, not the primary cause (there are obviously many drivers of inequality and lack of social mobility). So it isn't surprising that social mobility is actually experiencing a slight downward trend [1]. But to elaborate: A college degree has become more crucial than ever for the chance at a middle class life in America, yet real wages have stagnated, despite higher college attendance, and a college degree isn't worth what it used to be, either [2], while student debt has exploded [3]. In fact, even life expectancy is correlated with education and has even fallen for the least educated [4]. As a result, colleges have a seller's market available to them (in part propped up by the student loan scheme, though it likely wouldn't be all that much different without). Conversely, people are willing to sacrifice current and future income to essentially tread water economically (=> stagnant real wages). [1] http://www.businessinsider.com/the-american-dream-is-now-a-myth-2012-6 http://www.businessinsider.com/the-american-dream-is-now-a-m... [2] http://www.thedailybeast.com/articles/2013/03/27/why-a-ba-is-now-a-ticket-to-a-job-in-a-coffee-shop.html http://www.thedailybeast.com/articles/2013/03/27/why-a-ba-is... [3] http://www.theatlantic.com/business/archive/2011/08/chart-of-the-day-student-loans-have-grown-511-since-1999/243821/ http://www.theatlantic.com/business/archive/2011/08/chart-of... [4] http://www.motherjones.com/kevin-drum/2013/01/not-everyone-living-longer http://www.motherjones.com/kevin-drum/2013/01/not-everyone-l...
deleted 13y ago
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Symmetry 13y ago
It's important to remember that those numbers only count taxable income, and don't include welfare and other government services. If the world today seems and indeed is meaningfully less unequal than the world of Downton Abbey its partly because of those things. And also because more of the income of the super rich these days goes into bidding up the price of positional goods[1] rather than having the biggest possible house or the most possible servants. [1]http://en.wikipedia.org/wiki/Positional_good http://en.wikipedia.org/wiki/Positional_good
- fennecfoxen 13y ago
  In other words, inequality is at an all-time high if you ignore all the measures we take to make it better and spread the wealth around. Clearly we should elect more politicians who promise to spread the wealth around. Better start stumping for Hilary 2016. Oh, wait, look! We already are! cough :b
- amalag 13y ago
  I think income of the super rich may go into positional goods, but their wealth goes into commodities which does raise prices across the board. And that percentage may be greater than it was in the past.
  - fennecfoxen 13y ago
    Pfft. No it doesn't. Does Bill Gates have a billion dollars' worth of soybeans sitting around in silos somewhere? Did Steve Jobs buy up $50 million worth of crude oil at some point and no one told me? Does Warren Buffett have a freezer with $333,000,000 worth of pork bellies hanging in it? No. Even an ETF like PHCU has ~$15.24 million worth of copper - a drop in the ocean next to the wealth of a single billionaire. The only commodity the rich put anything approaching a substantial amount of money into... is gold. (Oooh, no, the price of gold is too high! think of the children!) No no. The super-rich put their wealth into BUSINESSES, which is why they remain super-wealthy. Also, they put it into: taxes (incl. the estate tax), charities, their heirs, corporate bonds, government bonds, and positional goods like fine art or NYC penthouses.
deleted 13y ago
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justin_vanw 13y ago
The #1 plot point that comes up again and again on Downton Abbey is that the 'rich' aristocrat family can't even afford to keep up the cost of their day to day lifestyle, and they only manage to fund it by marrying into money from America, miraculous unexpected wills, etc etc. It's a show about the end of the period of great inequality, where rising incomes made it far more expensive to employ a team of servants. So while this article is trying to make it sound like we should all be worried about how inequality is rising, being more unequal than 'Downton Abbey' is a pretty meaningless criterion. As to the substance of the article, it's using a very arbitrary definition of inequality, looking at the % of total wealth controlled by the richest 0.01%. That is one in ten thousand rich. It's also meaningless to talk about what share of the total wealth the bottom 90% of people had when comparing time periods so far from each other. A single person today in the US who is considered below the poverty line makes around $11,000/yr before taxes. In 1911, to be in the same percentile of income that person would have been working 11 hours per day with one 30 minute break, 7 days per week, often in completely unregulated and dangerous conditions. There was no Social Security or unemployment insurance any other kind of safety net, which meant if you were injured during your mandatory 77 hour work week, which was incredibly likely sooner or later, or even if you were just sick or unable to work for any reason, you would have had no income. Having become sick or injured, you certainly would not be able to afford even the rudimentary and almost completely ineffective medical care which existed at that time. To put it in perspective, someone working the same hours as their doppelgänger from 1911 (77 hours per week, 51 weeks per year), that hard worker living today, earning only minimum wage, would make around $29,000/yr. Whether they work 77 hours or 4 hours per week, today they also have automatic insurance should they become disabled (SSI), automatic medical coverage if they are injured on the job (everyone has workeman's comp insurance whether or not they have healthcare), and on and on. I'm not trying to paint some picture of perfection, but if you look at the realities of life then and now, it's completely absurd to try to make it seem like one % being lower than another % means life in 2014 has somehow regressed. The trend is clearly to more access to healthcare, better and safer work environments, far less hours spent working despite an improving standard of living, higher quality food, better access to education, less violence and crime, less hunger. In fact, the condition of humans in the world today is better than the in 1911 using literally any measure whatsoever. So while if you could hop in a time machine, if you are in the Nth percentile today, and you went back to be in the the same Nth percentile in 1911, in 1911 you would own a larger share of the total wealth of the entire country. I don't think that would really make a bit of difference to you, since you would have to work twice as many hours, face a constant threat of complete ruin from common illnesses and likely injuries, and most almost certainly die at a far younger age. So that's why these types of comparisons are meaningless.
pswenson 13y ago
don't forget poverty in the 1920s is way different than poverty in 2014. getting the basic needs like shelter, food, water, heat are a lot easier to come by these days (many government services). And many of the poor have TVs (cable even), cell phones, cars, etc. my point isn't that being poor is no big deal... my point is the rich AND poor both have it better off than they a hundred years ago. As I (vaguely) recall, PG made a similar point in Hackers and Painters.

25 points by fraqed 13y ago

Strange how articles like this aren't taken as an argument against the utility of "inequality". Does anyone think that the poor of today would be better off in Czarist Russia? [1] I also find it interesting that "inequality" is based solely on "share of national income", as if there is just this big pile of ex nihilo money being apportioned out unfairly. [1] http://annualletter.gatesfoundation.org/~/media/Annual%20Letter%202014/Myth%201/Myth1Info1_Curves_Final_EN_0122.jpg http://annualletter.gatesfoundation.org/~/media/Annual%20Let...

deleted 13y ago
[deleted]
JonnieCache 13y ago
>as if there is just this big pile of ex nihilo money being apportioned out unfairly. I get the whole "wealth is not zero sum" thing, I can see how it applies at the level of a whole economy. However, at the level of an individual company, there is a finite amount of revenue, and it is divided up in a zero sum fashion. When workers see their own pay going down while the bosses pay leaps by hundreds of percent, all that stuff about fallacious piles of money doesnt really make sense.
rbehrends 13y ago
Just because the situation has improved with respect to absolute poverty doesn't mean that relative poverty isn't a problem, too. It's just a different kind of problem. First, rising income inequality/relative poverty is economically harmful. It's simply not sustainable forever, especially in the consumer economy that the US has. Capital gains in particular cannot continue to exceed general economic growth without something eventually giving. Second, relative poverty creates social exclusion, leading to social stratification, low social mobility, and a whole host of related problems. This is probably best seen in the rising cost of college tuition in the US, creating an ever higher barrier for access to the middle class (admittedly, exacerbated by the fact that the US has no VET system worth speaking of). Perversely, where the affluent European countries invest in the education of their citizens, some US states seem to try and position themselves as low-wage alternatives to Mexico and China. Especially considering the ever-increasing levels of automation, this is all kinds of crazy. Also, with respect to absolute poverty, while the American poor have it generally better than serfs in Czarist Russia or most of the people in your average third world country (not a very high bar, of course), there's still plenty of hunger and homelessness in the US.
- yummyfajitas 13y ago
  Second, relative poverty creates social exclusion, leading to social stratification, low social mobility, and a whole host of related problems. This is probably best seen in the rising cost of college tuition in the US, creating an ever higher barrier for access to the middle class... If I gave you data showing that college consumption is at an all time high and mobility remains unchanged, in spite of a large increase in inequality, would that convince you your beliefs are incorrect? If not, what data (if any) would cause you to change your beliefs? http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf
  - rbehrends 13y ago
    Maybe you want to reconsider yours? I'm contrasting the US with comparatively affluent European countries; US social mobility has been comparatively low for quite some time, but inequality (as measured by the after-tax Gini) hasn't risen all that much over the past two decades, either; it's gotten slightly worse, but not massively. I'm talking about college tuition as a symptom here, not the primary cause (there are obviously many drivers of inequality and lack of social mobility). So it isn't surprising that social mobility is actually experiencing a slight downward trend [1]. But to elaborate: A college degree has become more crucial than ever for the chance at a middle class life in America, yet real wages have stagnated, despite higher college attendance, and a college degree isn't worth what it used to be, either [2], while student debt has exploded [3]. In fact, even life expectancy is correlated with education and has even fallen for the least educated [4]. As a result, colleges have a seller's market available to them (in part propped up by the student loan scheme, though it likely wouldn't be all that much different without). Conversely, people are willing to sacrifice current and future income to essentially tread water economically (=> stagnant real wages). [1] http://www.businessinsider.com/the-american-dream-is-now-a-myth-2012-6 http://www.businessinsider.com/the-american-dream-is-now-a-m... [2] http://www.thedailybeast.com/articles/2013/03/27/why-a-ba-is-now-a-ticket-to-a-job-in-a-coffee-shop.html http://www.thedailybeast.com/articles/2013/03/27/why-a-ba-is... [3] http://www.theatlantic.com/business/archive/2011/08/chart-of-the-day-student-loans-have-grown-511-since-1999/243821/ http://www.theatlantic.com/business/archive/2011/08/chart-of... [4] http://www.motherjones.com/kevin-drum/2013/01/not-everyone-living-longer http://www.motherjones.com/kevin-drum/2013/01/not-everyone-l...

deleted 13y ago

[deleted]

Symmetry 13y ago

It's important to remember that those numbers only count taxable income, and don't include welfare and other government services. If the world today seems and indeed is meaningfully less unequal than the world of Downton Abbey its partly because of those things. And also because more of the income of the super rich these days goes into bidding up the price of positional goods[1] rather than having the biggest possible house or the most possible servants. [1]http://en.wikipedia.org/wiki/Positional_good http://en.wikipedia.org/wiki/Positional_good

fennecfoxen 13y ago
In other words, inequality is at an all-time high if you ignore all the measures we take to make it better and spread the wealth around. Clearly we should elect more politicians who promise to spread the wealth around. Better start stumping for Hilary 2016. Oh, wait, look! We already are! cough :b
amalag 13y ago
I think income of the super rich may go into positional goods, but their wealth goes into commodities which does raise prices across the board. And that percentage may be greater than it was in the past.
- fennecfoxen 13y ago
  Pfft. No it doesn't. Does Bill Gates have a billion dollars' worth of soybeans sitting around in silos somewhere? Did Steve Jobs buy up $50 million worth of crude oil at some point and no one told me? Does Warren Buffett have a freezer with $333,000,000 worth of pork bellies hanging in it? No. Even an ETF like PHCU has ~$15.24 million worth of copper - a drop in the ocean next to the wealth of a single billionaire. The only commodity the rich put anything approaching a substantial amount of money into... is gold. (Oooh, no, the price of gold is too high! think of the children!) No no. The super-rich put their wealth into BUSINESSES, which is why they remain super-wealthy. Also, they put it into: taxes (incl. the estate tax), charities, their heirs, corporate bonds, government bonds, and positional goods like fine art or NYC penthouses.

deleted 13y ago

[deleted]

justin_vanw 13y ago

The #1 plot point that comes up again and again on Downton Abbey is that the 'rich' aristocrat family can't even afford to keep up the cost of their day to day lifestyle, and they only manage to fund it by marrying into money from America, miraculous unexpected wills, etc etc. It's a show about the end of the period of great inequality, where rising incomes made it far more expensive to employ a team of servants. So while this article is trying to make it sound like we should all be worried about how inequality is rising, being more unequal than 'Downton Abbey' is a pretty meaningless criterion. As to the substance of the article, it's using a very arbitrary definition of inequality, looking at the % of total wealth controlled by the richest 0.01%. That is one in ten thousand rich. It's also meaningless to talk about what share of the total wealth the bottom 90% of people had when comparing time periods so far from each other. A single person today in the US who is considered below the poverty line makes around $11,000/yr before taxes. In 1911, to be in the same percentile of income that person would have been working 11 hours per day with one 30 minute break, 7 days per week, often in completely unregulated and dangerous conditions. There was no Social Security or unemployment insurance any other kind of safety net, which meant if you were injured during your mandatory 77 hour work week, which was incredibly likely sooner or later, or even if you were just sick or unable to work for any reason, you would have had no income. Having become sick or injured, you certainly would not be able to afford even the rudimentary and almost completely ineffective medical care which existed at that time. To put it in perspective, someone working the same hours as their doppelgänger from 1911 (77 hours per week, 51 weeks per year), that hard worker living today, earning only minimum wage, would make around $29,000/yr. Whether they work 77 hours or 4 hours per week, today they also have automatic insurance should they become disabled (SSI), automatic medical coverage if they are injured on the job (everyone has workeman's comp insurance whether or not they have healthcare), and on and on. I'm not trying to paint some picture of perfection, but if you look at the realities of life then and now, it's completely absurd to try to make it seem like one % being lower than another % means life in 2014 has somehow regressed. The trend is clearly to more access to healthcare, better and safer work environments, far less hours spent working despite an improving standard of living, higher quality food, better access to education, less violence and crime, less hunger. In fact, the condition of humans in the world today is better than the in 1911 using literally any measure whatsoever. So while if you could hop in a time machine, if you are in the Nth percentile today, and you went back to be in the the same Nth percentile in 1911, in 1911 you would own a larger share of the total wealth of the entire country. I don't think that would really make a bit of difference to you, since you would have to work twice as many hours, face a constant threat of complete ruin from common illnesses and likely injuries, and most almost certainly die at a far younger age. So that's why these types of comparisons are meaningless.

pswenson 13y ago

don't forget poverty in the 1920s is way different than poverty in 2014. getting the basic needs like shelter, food, water, heat are a lot easier to come by these days (many government services). And many of the poor have TVs (cable even), cell phones, cars, etc. my point isn't that being poor is no big deal... my point is the rich AND poor both have it better off than they a hundred years ago. As I (vaguely) recall, PG made a similar point in Hackers and Painters.