Valuing Productivity, Not Profession, Could Reduce U.S. Inequality(citylab.com)
citylab.com
Valuing Productivity, Not Profession, Could Reduce U.S. Inequality
https://www.citylab.com/equity/2019/12/economic-inequality-jobs-educational-opportunities-rothwell/604099/
95 comments
> that implies there's some sort of authority - legal or otherwise - that determines "socially valuable."
Well, we already have a system that rewards “valuable” contributions: Money.
Just a lot of people don’t like that system much, as it turns out that system places little value on childcare, elder care and teaching; and huge value on executives who are fired for sexual harassment. Which doesn’t line up very precisely with a lot of people’s personal values.
Well, we already have a system that rewards “valuable” contributions: Money.
Just a lot of people don’t like that system much, as it turns out that system places little value on childcare, elder care and teaching; and huge value on executives who are fired for sexual harassment. Which doesn’t line up very precisely with a lot of people’s personal values.
Great childcare and elder care is very expensive and the people who do these jobs well are, in my experience, quite well compensated relative to other jobs available to them.
I agree childcare you pay for is often expensive - I was thinking more of the unpaid work done by stay-at-home parents and families caring for their own elders - who earn no direct salary for their efforts. But nobody would say they ought to stop.
>Great childcare and elder care is very expensive
It's hard even to find a way to buy "Great childcare and elder care". Mostly you end up paying as much as such a thing should cost but the money just goes to people who "administer" minimum wage workers delivering care that is mediocre at best.
It's hard even to find a way to buy "Great childcare and elder care". Mostly you end up paying as much as such a thing should cost but the money just goes to people who "administer" minimum wage workers delivering care that is mediocre at best.
I ran through the numbers when my kid started in childcare. It turned out there wasn't really a grand bureaucratic conspiracy. Instead, mainly labor is just really expensive.
When your kids are still infants, at childcare centers, the caretaker:child ratio can get as high as 1:2. Those caretakers gross nearly $30k/year plus benefits & other employer costs such as FICA & Medicare.
When your kids are still infants, at childcare centers, the caretaker:child ratio can get as high as 1:2. Those caretakers gross nearly $30k/year plus benefits & other employer costs such as FICA & Medicare.
$30k/year is not a lot of money - definitely not enough to raise your own kids on
Maybe not, but it's a lot of money for most families to pay someone else to take care of their kids.
No, but it does mean that as a parent, if (in this canned example) you are paying $18k/year- while the number initially sounds crazy- nearly all of it is going directly to caretaker compensation, not bloat & largess.
Aren't there childcare and elder care agencies that aim at families of different socioeconomic levels? I guess that the rich hire expensive nannies at expensive agencies.
What you comment sounds unlikely to me.
What you comment sounds unlikely to me.
I agree there’s a sourcing/matching problem that leads the administrators in these markets to capture a disproportionately large share of any value premiums paid.
That this is even arguable, I think, makes the OPs point.
Money certainly has it's drawbacks, but it does not have any kind of central authority that values it. It's the most distributed system there is.
> Just a lot of people don’t like that system much
Any other system would be more centralized, and even more open to abuse.
As they say: "Democracy is the worst form of government, except for all the others."
It's the same with money.
> places little value on childcare, elder care and teaching
Those things have a completely different problem: Those benefiting from them are not those paying for them.
> Just a lot of people don’t like that system much
Any other system would be more centralized, and even more open to abuse.
As they say: "Democracy is the worst form of government, except for all the others."
It's the same with money.
> places little value on childcare, elder care and teaching
Those things have a completely different problem: Those benefiting from them are not those paying for them.
yes, money is the mechanism we've defaulted to for measuring value, but economists admit that our economic systems, even capitalism, don't yet (properly) price everything that's valuable to humans (as you note).
a charitable reading of the parent comment would find they're mainly against centralization of authority rather than how to value intangibles or how to engineer fairness into economic systems.
but their first assumption that "'socially valuable contributions' [...] implies there's some sort of authority" is wholly unsupported. capitalism, for example, highly values rational resource distribution, but there is no central authority dictating that distribution.
in any case, the crux of the problem is that with concentration of wealth comes concentration of power. we're all very wary of concentrations of power, for good reason. we need to decouple that pairing for a more stable and balanced society.
a charitable reading of the parent comment would find they're mainly against centralization of authority rather than how to value intangibles or how to engineer fairness into economic systems.
but their first assumption that "'socially valuable contributions' [...] implies there's some sort of authority" is wholly unsupported. capitalism, for example, highly values rational resource distribution, but there is no central authority dictating that distribution.
in any case, the crux of the problem is that with concentration of wealth comes concentration of power. we're all very wary of concentrations of power, for good reason. we need to decouple that pairing for a more stable and balanced society.
In fact it's quite efficient, as the feedback time between when the signal is sent from the consumer to when it is received by the producer is very short compared to political systems.
Revealed preferences also show that what people say they want and what they actually want can be quantified very precisely using money as a proxy. And more generally, the vast majority of consumers show they prefer low prices over all other things, including priced in externalities, bad labor and management practices, unsustainable production etc...
More recently however (~100 years) the advertising and marketing industry has shown that preference hijacking is a real thing, so markets are skewed in this way.
Revealed preferences also show that what people say they want and what they actually want can be quantified very precisely using money as a proxy. And more generally, the vast majority of consumers show they prefer low prices over all other things, including priced in externalities, bad labor and management practices, unsustainable production etc...
More recently however (~100 years) the advertising and marketing industry has shown that preference hijacking is a real thing, so markets are skewed in this way.
> First, that implies there's some sort of authority - legal or otherwise - that determines "socially valuable."
Not necessarily. I agree that having values dictated by fiat is a recipe for disaster - such arrangements are bound to get corrupted over time. But on the other end of the spectrum, there is some sense of social value - a sense in which e.g. garbage collectors, firemen and doctors do more socially valuable jobs than athletes and entertainers. A sense that's easy to convey - imagine if suddenly, any one of the former three occupations disappeared; the death toll and suffering would quickly overshadow the largest of wars. Meanwhile, even if both of the latter occupations disappeared, the culture would be a bit poorer, but the society would function just fine.
Unfortunately, it seems that this concept of social value is very hard to robustly define. And if we can't define it, effectively optimizing for it is pretty much out of the question.
Not necessarily. I agree that having values dictated by fiat is a recipe for disaster - such arrangements are bound to get corrupted over time. But on the other end of the spectrum, there is some sense of social value - a sense in which e.g. garbage collectors, firemen and doctors do more socially valuable jobs than athletes and entertainers. A sense that's easy to convey - imagine if suddenly, any one of the former three occupations disappeared; the death toll and suffering would quickly overshadow the largest of wars. Meanwhile, even if both of the latter occupations disappeared, the culture would be a bit poorer, but the society would function just fine.
Unfortunately, it seems that this concept of social value is very hard to robustly define. And if we can't define it, effectively optimizing for it is pretty much out of the question.
What you are writing is another version of water/diamonds story. Basically WTF happened that diamonds, which nobody needs, are worth a lot, but water, which everyone needs, costs basically nothing?
The answer was something called marginalism. Well worth reading about, and I can't do justice to it in a few sentences.
Of course marginalism itself requires you to think about value in a certain way, often a very technical way (eg von Neuman-Morgenstern) that makes you forget that there are sometimes contradictions in how we think about value.
The answer was something called marginalism. Well worth reading about, and I can't do justice to it in a few sentences.
Of course marginalism itself requires you to think about value in a certain way, often a very technical way (eg von Neuman-Morgenstern) that makes you forget that there are sometimes contradictions in how we think about value.
Thanks, I didn't know the term "marginalism", I'll look it up.
Yes, but even these particular values embody subjective urbanist bias. For example, some towns run very effective volunteer fire departments, where the "payment" seems to be mutual aid and masculine pride. In some towns garbage disposal is mostly burn barrels and composting, which is bad for the environment but is not a service which can fail. And personally, having the privilege of education in biology, I feel like manufacturers of drugs and diagnostic equipment manufacturers are infinitely more valuable than doctors who are merely technicians trained in the use of these tools.
Perhaps the concept of "social value" is only useful in the context of societies small enough so that all participants can agree on values?
Perhaps the concept of "social value" is only useful in the context of societies small enough so that all participants can agree on values?
Huh, you're right about my "subjective urbanist bias", I didn't even notice it in my thinking. Thanks!
WRT. doctors vs. drug/diagnostic equipment manufacturers, a good point, but here I specifically picked my example - public health and safety vs. entertainment - to maximize the contrast.
> Perhaps the concept of "social value" is only useful in the context of societies small enough so that all participants can agree on values?
I think there might be a correlation between community size and the ease of agreeing on what is social value, but I wouldn't discount it for larger societies or even humanity as a whole. Humans do have a lot in common, and I feel you can get far in ranking jobs by social value by going along the gradient of reduction of suffering. And I say "jobs", not "professions", because IMO, professions are almost orthogonal to social value. For example, in terms of the social value, I'd rank a programmer working on diagnostic equipment > programmer working on a videogame > programmer working on advertising tech. The skillset and productivity may be similar or even the same, but these jobs occupy three very different point on the "making the world a better place" scale.
WRT. doctors vs. drug/diagnostic equipment manufacturers, a good point, but here I specifically picked my example - public health and safety vs. entertainment - to maximize the contrast.
> Perhaps the concept of "social value" is only useful in the context of societies small enough so that all participants can agree on values?
I think there might be a correlation between community size and the ease of agreeing on what is social value, but I wouldn't discount it for larger societies or even humanity as a whole. Humans do have a lot in common, and I feel you can get far in ranking jobs by social value by going along the gradient of reduction of suffering. And I say "jobs", not "professions", because IMO, professions are almost orthogonal to social value. For example, in terms of the social value, I'd rank a programmer working on diagnostic equipment > programmer working on a videogame > programmer working on advertising tech. The skillset and productivity may be similar or even the same, but these jobs occupy three very different point on the "making the world a better place" scale.
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"First, that implies there's some sort of authority - legal or otherwise - that determines "socially valuable.""
There is. The opinions of other people in your society - generally expressed via the ballot box in a democracy. All authority is, or should, derive directly from that source of truth.
That's sort of what society is - everybody else. Hence why we have social judgments on what is appropriate - like banning guns and the death penalty - and why we have different countries to encapsulate different views on those social judgments (my country bans the former, yours likely doesn't - but we both take a dim view of marrying off 12 year olds, something other societies are quite relaxed about).
There is no objective truth here. It's all a social creation by a set of people who have chosen to co-operate with each other and call themselves a country.
There is. The opinions of other people in your society - generally expressed via the ballot box in a democracy. All authority is, or should, derive directly from that source of truth.
That's sort of what society is - everybody else. Hence why we have social judgments on what is appropriate - like banning guns and the death penalty - and why we have different countries to encapsulate different views on those social judgments (my country bans the former, yours likely doesn't - but we both take a dim view of marrying off 12 year olds, something other societies are quite relaxed about).
There is no objective truth here. It's all a social creation by a set of people who have chosen to co-operate with each other and call themselves a country.
First, that implies there's some sort of authority - legal or otherwise - that determines "socially valuable."
Are literally saying we should live a society without either values or institutions that make judgements about values?
Right now, the justice system, the zoning system and the operations of private foundations, and beyond are engaging in leadership that makes value judgements about what is socially valuable. That is how society has worked historically and the US in earlier times made those judgements more explicit.
Point blank denying this is actually calling for even more social change than the article.
Are literally saying we should live a society without either values or institutions that make judgements about values?
Right now, the justice system, the zoning system and the operations of private foundations, and beyond are engaging in leadership that makes value judgements about what is socially valuable. That is how society has worked historically and the US in earlier times made those judgements more explicit.
Point blank denying this is actually calling for even more social change than the article.
> Are [you] literally saying we should live a society without either values or institutions that make judgements about values?
No, I did not say that literally or figuratively.
No, I did not say that literally or figuratively.
It remains very frustrating watching people organise against inequality as the evil of this era. Inequality isn't worth railing against and the focus of all this attention should be on living standards.
If everyone doubles their living standards over 10 years, absolute inequality rises (there is always going to be someone with no wealth/income because they want to live that way, so the absolute gap in wealth increases as the wealthiest member of society gets wealthier).
If the amount of wealth is doubled due to some center of extreme productivity (eg, a Silicon Valley) then that center is going to get preferential access to new wealth. Relative inequality rises.
In both of these scenarios, wealth inequality and living standards can raise in tandem. These are perfectly fine outcomes. Inequality is only interesting as a symptom of deeper issues affecting living standards. Should workers be rewarded according to their productivity? That would be nice, but then we would need to be very careful how we decided who got what job. There are jobs that are rare, highly productive and easy to do where the people holding them would be unfairly rewarded. That would be similar to what we have now. Focusing on median & minimum living standards will get much better results. If those are rising, inequality is not an issue.
If everyone doubles their living standards over 10 years, absolute inequality rises (there is always going to be someone with no wealth/income because they want to live that way, so the absolute gap in wealth increases as the wealthiest member of society gets wealthier).
If the amount of wealth is doubled due to some center of extreme productivity (eg, a Silicon Valley) then that center is going to get preferential access to new wealth. Relative inequality rises.
In both of these scenarios, wealth inequality and living standards can raise in tandem. These are perfectly fine outcomes. Inequality is only interesting as a symptom of deeper issues affecting living standards. Should workers be rewarded according to their productivity? That would be nice, but then we would need to be very careful how we decided who got what job. There are jobs that are rare, highly productive and easy to do where the people holding them would be unfairly rewarded. That would be similar to what we have now. Focusing on median & minimum living standards will get much better results. If those are rising, inequality is not an issue.
I'm going to speak directly to your point, which is the claim that only absolute wealth matters, but relative wealth does not.
Relative wealth buys you status, position, and power in society. That status protects you when things go wrong, when the system fails to measure or optimize for the things that you care about, or when the music suddenly stops and you find that you're the one left without a chair.
People deeply care about not being on the bottom of the pecking order, because if you look at history, when anything goes wrong, it's always those at the bottom who get hit the hardest - whether it's famine, war, economic recession, or any of the myriad of instabilities and ills that visit our societies from time to time.
Your contention that we should only care about minimum living standards requires a large amount of faith, not just in the system as it stands today, but that the system won't slowly erode those minimums over time because the poor lack the political and social power to keep their minimums. Without the power to protect your own interests, you're at the literal mercy of those who are better off than you to throw you a bone when you're most vulnerable.
And the best guarantor of social and political power is to be necessary - to be a critical component of the means of production. Automation, outsourcing, and foreign competition have all been chipping away at the competitive position of the median American worker.
A look at the path of inflation-adjusted minimum wage, the evisceration of unions, the opioid crisis, the recent Great Recession, the fact that standard housing, schooling, and medical care is becoming increasingly out of reach of the average wage-earners would suggest that in fact, life is not getting better for those at the bottom, despite the very large increase in absolute wealth since the 1970s.
Relative wealth buys you status, position, and power in society. That status protects you when things go wrong, when the system fails to measure or optimize for the things that you care about, or when the music suddenly stops and you find that you're the one left without a chair.
People deeply care about not being on the bottom of the pecking order, because if you look at history, when anything goes wrong, it's always those at the bottom who get hit the hardest - whether it's famine, war, economic recession, or any of the myriad of instabilities and ills that visit our societies from time to time.
Your contention that we should only care about minimum living standards requires a large amount of faith, not just in the system as it stands today, but that the system won't slowly erode those minimums over time because the poor lack the political and social power to keep their minimums. Without the power to protect your own interests, you're at the literal mercy of those who are better off than you to throw you a bone when you're most vulnerable.
And the best guarantor of social and political power is to be necessary - to be a critical component of the means of production. Automation, outsourcing, and foreign competition have all been chipping away at the competitive position of the median American worker.
A look at the path of inflation-adjusted minimum wage, the evisceration of unions, the opioid crisis, the recent Great Recession, the fact that standard housing, schooling, and medical care is becoming increasingly out of reach of the average wage-earners would suggest that in fact, life is not getting better for those at the bottom, despite the very large increase in absolute wealth since the 1970s.
> Relative wealth buys you status, position
> pecking order
Some of this can't really be fixed: the top 10% of status only has room for 10% of the people, by definition. The pecking order, by definition, orders people.
> and power in society.
This seems like a better focus. How much extra power you gain by being on top varies a great deal between different societies (including earlier and later versions of any one country). This seems like the relevant variable.
I'm not sure that this inequality of power is very well measured by monetary inequality. There is some correlation, because power can usually be turned into material comfort. But I'm not sure how much higher taxes or whatever remedy like that is proposed for moving money around, will move power around.
> the best guarantor of social and political power is to be necessary
I hear what you're saying, roughly about changes in the last 50 years in western countries. But it is also easy to think of large classes of absolutely necessary workers who had very little power, in many places and times. So I'm not sure that that's enough.
Some of this can't really be fixed: the top 10% of status only has room for 10% of the people, by definition. The pecking order, by definition, orders people.
> and power in society.
This seems like a better focus. How much extra power you gain by being on top varies a great deal between different societies (including earlier and later versions of any one country). This seems like the relevant variable.
I'm not sure that this inequality of power is very well measured by monetary inequality. There is some correlation, because power can usually be turned into material comfort. But I'm not sure how much higher taxes or whatever remedy like that is proposed for moving money around, will move power around.
> the best guarantor of social and political power is to be necessary
I hear what you're saying, roughly about changes in the last 50 years in western countries. But it is also easy to think of large classes of absolutely necessary workers who had very little power, in many places and times. So I'm not sure that that's enough.
As we've moved towards greater wealth inequality, it is also argued that we've moved towards wealth having greater access to power. (Citizens United, one dollar one vote, decline of unions, etc) You can go after wealth inequality, or you can go after the power-wealth connection. I'm not sure which is easier.
I'm not sure these connections are as clear as you seem to take them to be. I guess I should cite PG instead of re-typing... maybe we're still unwinding the world of WWII, which produces lots of correlated changes [1]. Maybe inequality is more about technology than tax laws [2].
[1] http://paulgraham.com/re.html [2] http://paulgraham.com/ineq.html
[1] http://paulgraham.com/re.html [2] http://paulgraham.com/ineq.html
As I watch pop culture media I can’t help but think that the desire for relative wealth/status is driven primarily by the desire to attract sexual and romantic partners. I don’t think people in their 20s and 30s are as worried about war and famine as they are about being undesirable, unpopular, rejected, and lonely. At least not in the US. I suppose sex tech and AR/VR tech could advance to the point where some of these fears are obliviated and humans begin to deprogram the desire for status within a social hierarchy. That would be quite a radical evolution.
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> Relative wealth buys you status, position, and power in society.
Social cohesion (including political involvement, etc.) buys these things far more effectively than money or any market mechanism. "Relative wealth" is a highly imperfect substitute for high social capital.
Social cohesion (including political involvement, etc.) buys these things far more effectively than money or any market mechanism. "Relative wealth" is a highly imperfect substitute for high social capital.
> Your contention that we should only care about minimum living standards requires a large amount of faith, not just in the system as it stands today, but that the system won't slowly erode those minimums over time because the poor lack the political and social power to keep their minimums. Without the power to protect your own interests, you're at the literal mercy of those who are better off than you to throw you a bone when you're most vulnerable.
Yeah, exactly. The focus should be on stuff like that rather than on wealth/income inequality; I can see we are on the same wavelength here. The natural solution to what you are talking about is to find ways to increase the standards of people who are not well off.
The natural solution to inequality is to disenfranchise the wealthy, which doesn't put food on the table (literally, in the extreme China/Russia/Zimbabwe style cases). It works really badly & everyone important tries to migrate somewhere capitalist when it is tried, which is a contributing factor to why it generally isn't the done thing.
If the focus is on inequality, then realising that a policy is not working will take a long time. If the focus is on living standards, feedback will be quick.
Yeah, exactly. The focus should be on stuff like that rather than on wealth/income inequality; I can see we are on the same wavelength here. The natural solution to what you are talking about is to find ways to increase the standards of people who are not well off.
The natural solution to inequality is to disenfranchise the wealthy, which doesn't put food on the table (literally, in the extreme China/Russia/Zimbabwe style cases). It works really badly & everyone important tries to migrate somewhere capitalist when it is tried, which is a contributing factor to why it generally isn't the done thing.
If the focus is on inequality, then realising that a policy is not working will take a long time. If the focus is on living standards, feedback will be quick.
> The natural solution to inequality is to disenfranchise the wealthy, which doesn't put food on the table
To use an example from the leftmost mainstream politicians in the United States, a current proposal is to enact a wealth tax on fortunes over $X million to fund a larger social safety net.
You can argue that ideologically the focus should be on standards of living, not on inequality, but realistically a wealth tax fulfills both.
To use an example from the leftmost mainstream politicians in the United States, a current proposal is to enact a wealth tax on fortunes over $X million to fund a larger social safety net.
You can argue that ideologically the focus should be on standards of living, not on inequality, but realistically a wealth tax fulfills both.
Why not simply accommodate the savings rather than constantly trying to confiscate them? A dynamic monetary system can do that.
I don't understand this obsession on the left with behaving like Robin Hood. Wealth taxes will not alter the power position of the rich. All it does is get up the nose of the rich and require us to pay those people who want to play Robin Hood.
QE labour hours however, and the power of the wealthy to deny others an income by not spending their haul is removed. They can count their coin and the poor still get to work and eat.
I don't understand this obsession on the left with behaving like Robin Hood. Wealth taxes will not alter the power position of the rich. All it does is get up the nose of the rich and require us to pay those people who want to play Robin Hood.
QE labour hours however, and the power of the wealthy to deny others an income by not spending their haul is removed. They can count their coin and the poor still get to work and eat.
I'm not sure I understand what your proposal is but the answer to your question of "why wealth tax", the answer is pretty much because it's simple to convey and rally behind.
Deficit spending (or straight up "money printing") could provide benefits to those who need it without taxation, but decades of political obsession over "how are we gonna pay for it" means that people feel better if a policy of "buy X" is followed by "while taking money from Y to pay for it"
For Republicans, the Y is some nefarious unnamed government bloat or waste, but never military. Most recently it's food stamps, and as I understand it there's a lot of hungry gazes staring at social security and medicaid.
For Democrats, the Y is some nefarious wealthy entity, either Big Corporations or The Rich. So, ambitious far left proposals involve taxing wealth, adding very high marginal tax rates at the top, and taxing corporations and investment vehicles. This is often silly for obvious reasons. For example, Bernie suggests taxing stock transactions, bond trades, and derivatives transactions, by a (low) percentage, which sounds insane personally. But that stocks and derivatives sounds like Evil Wall Street Bullshit to some voters so they eat it up.
Deficit spending (or straight up "money printing") could provide benefits to those who need it without taxation, but decades of political obsession over "how are we gonna pay for it" means that people feel better if a policy of "buy X" is followed by "while taking money from Y to pay for it"
For Republicans, the Y is some nefarious unnamed government bloat or waste, but never military. Most recently it's food stamps, and as I understand it there's a lot of hungry gazes staring at social security and medicaid.
For Democrats, the Y is some nefarious wealthy entity, either Big Corporations or The Rich. So, ambitious far left proposals involve taxing wealth, adding very high marginal tax rates at the top, and taxing corporations and investment vehicles. This is often silly for obvious reasons. For example, Bernie suggests taxing stock transactions, bond trades, and derivatives transactions, by a (low) percentage, which sounds insane personally. But that stocks and derivatives sounds like Evil Wall Street Bullshit to some voters so they eat it up.
By definition if you spend more, you tax more. Every amount of govt spending is matched by an increase in taxation to the penny for any positive tax rate. The only thing that stops that is increases in private saving along the route.
Why do you want to stop increased saving?
The 'wealth tax' doesn't work because it doesn't stop the 'wealthy' from bidding on the thing government is trying to buy. So you are just going to cause inflation.
Why not try explaining to people how the system actually works?
Why do you want to stop increased saving?
The 'wealth tax' doesn't work because it doesn't stop the 'wealthy' from bidding on the thing government is trying to buy. So you are just going to cause inflation.
Why not try explaining to people how the system actually works?
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But we can ignore the need to increase productivity enough (which is hard) in order to achieve better standards for all if we just take from those at the tippy top who hoard wealth that could be used to help those in need. We have enough resources/wealth and productivity now to help the rest but we don’t. The issue is that despite the continuous increase in wealth and productivity, the distribution is inequal enough to make sure that the worst never reach the conditions that they deserve as human beings. We can solve the problem with resources that exist now and the unequal distribution is getting worse, we shouldn’t keep kicking the can down the road and not focusing on inequality.
Over the past 20 years, the amount of wealth has increased substansally, and almost none of the gain has gone to those at the bottom of society. Inequality is growing every year.
Don't the bottom of society all have access to the advancements in technology now e.g. 4g, high speed internet, smart phones, mobile apps, video games
Access to technology is a form of wealth.
Access to technology is a form of wealth.
Your discussion along with the your GP treat "wealth" as an undifferentiated substance, where a greater total amount inherently involves a better life.
The problem with this is that human beings are limited biological creatures with a variety of wants and needs each of which is not interchangeable with the other. Having a powerful smart phone with access to the Internet no doubt give a person greater variety of stimulous, the potential for entertainment, connection with those in near and distant land and whatever else. It satisfies what we might call the desire for entertainment, creativity or whatever. But it can't be directly substituted for food, clothing, shelter or a temperature controlled environment. So the situation of a homeless person with a smart phone freezing at night is better than a middle class person in the 1950s - even if we count the homeless person as having $1 million dollars in wealth measured by 1950s standard - since hey, that smart phone is lots of "wealth".
The problem with this is that human beings are limited biological creatures with a variety of wants and needs each of which is not interchangeable with the other. Having a powerful smart phone with access to the Internet no doubt give a person greater variety of stimulous, the potential for entertainment, connection with those in near and distant land and whatever else. It satisfies what we might call the desire for entertainment, creativity or whatever. But it can't be directly substituted for food, clothing, shelter or a temperature controlled environment. So the situation of a homeless person with a smart phone freezing at night is better than a middle class person in the 1950s - even if we count the homeless person as having $1 million dollars in wealth measured by 1950s standard - since hey, that smart phone is lots of "wealth".
The top 1% has taken most of the growth. The top 10% have received some table-scraps. The bottom 90% have lost income.
That’s clearly not true, at least in the US. Total compensation has outpaced inflation significantly.
Wages after inflation haven't budged in 44 years: https://www.forbes.com/sites/joshbersin/2018/10/31/why-arent...
I know the UK situation much better than the US situation.
I know the UK situation much better than the US situation.
This seems like a non sequitur. Total compensation vs. inflation is not a measure of inequality.
Yes, but the grandparent claimed that
> and almost none of the gain has gone to those at the bottom of society
which is not true, since real compensation at the bottom of society has also gone up.
> and almost none of the gain has gone to those at the bottom of society
which is not true, since real compensation at the bottom of society has also gone up.
By all the numbers I've seen, that's not really the case. For one example, according to the Congressional Research Service[1], inflation-adjusted wages for the bottom 10% of earners have been stagnant since the start of the 1980s, and inflation-adjusted wages for the bottom 50% have been nearly stagnant, with small gains that consist almost entirely of women's income getting closer to parity with men's.
[1]: https://crsreports.congress.gov/search/#/?termsToSearch=r450...
[1]: https://crsreports.congress.gov/search/#/?termsToSearch=r450...
Economic power is leveraged into political power. This power is used to maintain the status quo in favor of the currently economically powerful through regulatory capture, patronage, and increasingly outright corruption.
We cannot remain an egalitarian democracy if economic power continues to concentrate as it has, regardless of median living standards.
We cannot remain an egalitarian democracy if economic power continues to concentrate as it has, regardless of median living standards.
There's only so much power in society, and when inequality goes up, the power of the affluent rises, while the power of the poor and working class wanes.
This isn't an issue that can be fixed by a rising tide lifting all boats.
This isn't an issue that can be fixed by a rising tide lifting all boats.
Wealth translates to political influence. If most of the wealth in a society belongs to a few people, those people have outsized influence on the those in power. Conversely, the more distributed wealth is within the society, the more representative the government will be.
In a deep sense wealth distribution is about what form of government you want to have. If you want an oligopoly, then you let the majority if the wealth go to a few people. If you want a government that looks after most of the citizens, then you want a more equitable distribution of wealth.
In a deep sense wealth distribution is about what form of government you want to have. If you want an oligopoly, then you let the majority if the wealth go to a few people. If you want a government that looks after most of the citizens, then you want a more equitable distribution of wealth.
There is plenty of evidence showing that huge gaps in equality are highly correlated with increased unhappiness at both ends of the spectrum, along with other negatives like increased crime. Humans are social animals, so a part of living standards will always be around power structures and fairness. You can't just give people at the bottom nice things to erase that.
From a purely macro-economic capitalistic viewpoint, there's a lot of evidence that a high level of inequality actually depresses economic growth. This means a very strong argument can be made that addressing inequality is likely to increase both relative AND absolute living standards in the long run.
The reason people care about inequality is that under capitalism, it's the measure that best tracks with quality of life in the lowest standards of living.
Why is capitalism relevant? Because the driving economic force under capitalism is that the rich (capital owners) want to get richer (earn returns on their capital investments).
Why doesn't a rising tide lift all boats, in practice? Because that doesn't maximize return on capital. The people who financed development and operation of a hospital get the best returns on their investments by pricing things out of reach of those with the least. You don't maximize area of a rectangle under an income distribution curve by making the lowest point of the curve the top of the rectangle.
Perhaps the best way to think of it is "a rising tide lifts all boats, but some of them aren't lifted by as much as the water level has risen." Not quite as snappy, is it? It does get the point across, though. Inequality functions as a measure of how many boats aren't keeping up with the rising water level.
That's why so many people care about it. It's the same thing as your goal, but bundled up as an aggregate and easy to track, instead of involving hundreds of subjective measures. No measure is perfect, of course, but it's a lot harder to game than something like the CPI is.
Why is capitalism relevant? Because the driving economic force under capitalism is that the rich (capital owners) want to get richer (earn returns on their capital investments).
Why doesn't a rising tide lift all boats, in practice? Because that doesn't maximize return on capital. The people who financed development and operation of a hospital get the best returns on their investments by pricing things out of reach of those with the least. You don't maximize area of a rectangle under an income distribution curve by making the lowest point of the curve the top of the rectangle.
Perhaps the best way to think of it is "a rising tide lifts all boats, but some of them aren't lifted by as much as the water level has risen." Not quite as snappy, is it? It does get the point across, though. Inequality functions as a measure of how many boats aren't keeping up with the rising water level.
That's why so many people care about it. It's the same thing as your goal, but bundled up as an aggregate and easy to track, instead of involving hundreds of subjective measures. No measure is perfect, of course, but it's a lot harder to game than something like the CPI is.
Inequality in living standards is exactly what they’re talking about when they talk about inequality.
Perhaps you should familiarize yourself with the nuanced discourse of groups tackling these problems directly at the political level, instead of taking textbook definitions of words and none of the context of the broader social movements behind the effort.
“Wealth” is a measure of relative living standards. You’re talking about the same damn thing these groups do but somehow seem annoyed at your own lack of experience with the political conversation.
DRY can apply to more than code. No reason to reinvent definitions and quantify problems when people have already spent a lifetime discussing these things.
Get off HN and engage directly maybe, rather than getting circle and repetitive.
Humanity built bridges and roads and trade before it had any answers like we do about physics and math. We do not need or rely on the uptight definitions in academia. Language is mushed up as needed.
STEM headed nerds would be wise to forget their academia a bit and their propensity for falling into functional fixedness when it comes to language
Perhaps you should familiarize yourself with the nuanced discourse of groups tackling these problems directly at the political level, instead of taking textbook definitions of words and none of the context of the broader social movements behind the effort.
“Wealth” is a measure of relative living standards. You’re talking about the same damn thing these groups do but somehow seem annoyed at your own lack of experience with the political conversation.
DRY can apply to more than code. No reason to reinvent definitions and quantify problems when people have already spent a lifetime discussing these things.
Get off HN and engage directly maybe, rather than getting circle and repetitive.
Humanity built bridges and roads and trade before it had any answers like we do about physics and math. We do not need or rely on the uptight definitions in academia. Language is mushed up as needed.
STEM headed nerds would be wise to forget their academia a bit and their propensity for falling into functional fixedness when it comes to language
>"Wealth" is a measure of relative living standards.
No, it is not. This is like saying wealth is a measure of how fancy your car is. Correlated, sure, but calling it a measure is inaccurate at best and at worst an attempt to eschew nuance in favor of ideological conformity.
No, it is not. This is like saying wealth is a measure of how fancy your car is. Correlated, sure, but calling it a measure is inaccurate at best and at worst an attempt to eschew nuance in favor of ideological conformity.
You emotionally qualify it isn’t and that’s it.
If you have something quantifiable to peddle here that never brushes up against human ideology, go for it.
Otherwise your reply is no different than mine.
See politically I can label it with as much nuance as I want. So can anyone. There is no “one way” to view things. There’s very meticulous and nuanced ways, but I don’t have to adopt them as part of my political tool belt.
Any ideas and nuance we hold onto in our head outside of what physics and chemistry say the structure of matter looks like at various speeds relative to light, is subjective human ideology.
Whichever ideology holds official power “wins.” Largely by saying some other ideology is deficient we’re picking this one instead.
So... quantify it with something other than a human ideology then?
Pure math economics models are invalid. Human biology doesn’t need to conform to the behaviors within. It’s academic economists trying to find a causative conclusion from physics to wealth accumulation to defend political ideology.
If you have something quantifiable to peddle here that never brushes up against human ideology, go for it.
Otherwise your reply is no different than mine.
See politically I can label it with as much nuance as I want. So can anyone. There is no “one way” to view things. There’s very meticulous and nuanced ways, but I don’t have to adopt them as part of my political tool belt.
Any ideas and nuance we hold onto in our head outside of what physics and chemistry say the structure of matter looks like at various speeds relative to light, is subjective human ideology.
Whichever ideology holds official power “wins.” Largely by saying some other ideology is deficient we’re picking this one instead.
So... quantify it with something other than a human ideology then?
Pure math economics models are invalid. Human biology doesn’t need to conform to the behaviors within. It’s academic economists trying to find a causative conclusion from physics to wealth accumulation to defend political ideology.
These statements about 'absolute living standards' are utter crap because they absolutely ignore the law of rent. Simply stated the more people in a given city make the higher the rents, fees and cost of living in general. The more the middle class makes the more is taken away from them. Middle class then keeps only paying fees left and right and witnessing ever increasing poverty around them.
The resulting state of prospering areas filled with poverty has been called the paradox of progress and poverty because the more prosperous area you have the more homelessness and disgusting living conditions you find. Whether it is San Francisco with their smelly homeless neighborhoods, Hong Kong with 4sqft apartments or London during industrial revolution as described by Dickens in Oliver Twist.
Sadly the 'absolute living standard' fairy tale is perpetuated by people on the economical right which makes anyone on the left dismiss anything further they say. (I'm on the right myself, but this crap infuriates me).
The relevant items to study in order to understand this effect 1. Law of Rent by David Ricardo 2. Henry George theorem
The resulting state of prospering areas filled with poverty has been called the paradox of progress and poverty because the more prosperous area you have the more homelessness and disgusting living conditions you find. Whether it is San Francisco with their smelly homeless neighborhoods, Hong Kong with 4sqft apartments or London during industrial revolution as described by Dickens in Oliver Twist.
Sadly the 'absolute living standard' fairy tale is perpetuated by people on the economical right which makes anyone on the left dismiss anything further they say. (I'm on the right myself, but this crap infuriates me).
The relevant items to study in order to understand this effect 1. Law of Rent by David Ricardo 2. Henry George theorem
How would "productivity" be measured?
And who would measure it?
Assuming that additional government bureaucracy would be created for this (noble) purpose, what guarantee would we have that their decisions would be any more "rational" or "efficient" than the so-called "free market" system that currently exists in the US for determining salaries?
This is not a criticism of the author's underlying arguments, just a question about how he would implement the proposed remedy.
And who would measure it?
Assuming that additional government bureaucracy would be created for this (noble) purpose, what guarantee would we have that their decisions would be any more "rational" or "efficient" than the so-called "free market" system that currently exists in the US for determining salaries?
This is not a criticism of the author's underlying arguments, just a question about how he would implement the proposed remedy.
Heck, even as a software developer, which HN heavily skews to, how would we measure productivity? Many fields are very creatively driven, it's incredibly difficult to put a number on it.
Lines of code? That was shown to be a total failure years ago. Jira tickets closed? Some tickets are much harder than others. Hours of butt in seat? Well, sadly that still seems to be a bit in vongue, but is thankfully dying out.
Vlue collar jobs are easier to put a number one, but a lot of white collar jobs don't, and the USA is rapidly shifting to white collar work.
Lines of code? That was shown to be a total failure years ago. Jira tickets closed? Some tickets are much harder than others. Hours of butt in seat? Well, sadly that still seems to be a bit in vongue, but is thankfully dying out.
Vlue collar jobs are easier to put a number one, but a lot of white collar jobs don't, and the USA is rapidly shifting to white collar work.
Exactly. At best you can ask teammates, but as soon as this becomes an important measure, people are incentivized to back scratch. Plus, people would have radically different standards for productivity based on their own experiences.
Within a company, revenue/person, weighted by one or more of:
salary
Number of colleagues performing the same function
Percentage of revenue due to a department
salary
Number of colleagues performing the same function
Percentage of revenue due to a department
> Blue collar jobs are easier to put a number on
But still very far from easy. The standard story here involves a shoe factory in a communist country of your choice, who met their quota by making only left-foot size-3 shoes... You can plug any particular hole, but the general problem remains.
But still very far from easy. The standard story here involves a shoe factory in a communist country of your choice, who met their quota by making only left-foot size-3 shoes... You can plug any particular hole, but the general problem remains.
> I think we can have a society that rewards people for productive or otherwise socially valuable contributions while also taking care of the poor and those who can’t work. If people were paid based on performance and we removed the political advantages that certain professional elites have carved out for themselves, we’d be much better off in terms of both inequality and economic growth.
What does this actually mean? Sure, a few professions like doctors have managed to protect their high salaries by constraining supply, but programmers are paid very well in the US and have no such protections.
It's hard to think of many more examples like doctors; lawyers, for example, have definitely not constrained their own supply and it's debatable how lucrative the profession as a whole really is, despite still having somewhat of an 'elite' connotation.
What does this actually mean? Sure, a few professions like doctors have managed to protect their high salaries by constraining supply, but programmers are paid very well in the US and have no such protections.
It's hard to think of many more examples like doctors; lawyers, for example, have definitely not constrained their own supply and it's debatable how lucrative the profession as a whole really is, despite still having somewhat of an 'elite' connotation.
[deleted]
My feeling has always been that no matter how you decide to allocate resources, some people are going to be 'better' at winning the game we design than others; maybe they have some skill that is highly valued in the system we set up, or they are lucky, or have connections, or have a higher drive succeed, or whatever else might factor into success.
Instead of trying to figure out those factors and mitigate them so everyone has an equal chance, why don't we just say fuck it, and tax the winners more heavily? We don't know why you were able to win in the system so well, but since you did, you get to contribute a lot more to helping the people who don't succeed in the system. Give a universal basic income, tax the winners to fund it, and call it a day.
Instead of trying to figure out those factors and mitigate them so everyone has an equal chance, why don't we just say fuck it, and tax the winners more heavily? We don't know why you were able to win in the system so well, but since you did, you get to contribute a lot more to helping the people who don't succeed in the system. Give a universal basic income, tax the winners to fund it, and call it a day.
This is essentially what social democracies do, like in the Nordic countries, and it seems to work great at achieving good results in a variety of societal dimensions.
The counter-arguments from fiscal conservatives generally take one of two tacks: either a plainly disingenuous one where they argue that this is somehow only possible in those specific countries (e.g. due to being small and/or relatively homogeneous), or an ideological one where they argue that even if this is beneficial to the society as a whole, they're against it because taxing the winners more is fundamentally wrong, taxation is theft etc.
Well, the Nordic countries don't do the UBI part, but taxing the winners heavily and funding policies that are effectively redistributionist because they treat everyone more or less equally (like public transportation or universal healthcare), yeah they do that for sure.
The counter-arguments from fiscal conservatives generally take one of two tacks: either a plainly disingenuous one where they argue that this is somehow only possible in those specific countries (e.g. due to being small and/or relatively homogeneous), or an ideological one where they argue that even if this is beneficial to the society as a whole, they're against it because taxing the winners more is fundamentally wrong, taxation is theft etc.
Well, the Nordic countries don't do the UBI part, but taxing the winners heavily and funding policies that are effectively redistributionist because they treat everyone more or less equally (like public transportation or universal healthcare), yeah they do that for sure.
No, the Nordic countries don't really tax the winners more. The marginal tax rates for top earners there are about the same as in the US. The real difference is that they, along with most other European welfare states, tax the middle class much more than the US does.
> either a plainly disingenuous one where they argue that this is somehow only possible in those specific countries (e.g. due to being small and/or relatively homogeneous)
No, of course it is possible in other countries too. For example, people of Swedish ancestry in the US not only do better than average American, but in fact do much better than Swedes in Sweden.
> either a plainly disingenuous one where they argue that this is somehow only possible in those specific countries (e.g. due to being small and/or relatively homogeneous)
No, of course it is possible in other countries too. For example, people of Swedish ancestry in the US not only do better than average American, but in fact do much better than Swedes in Sweden.
Hmm, is that true?
> So on average, those in the highest earnings bracket will pay 56 percent of their taxable income to the taxman (31 percent in local income tax plus 25 percent in national income tax), but a top earner living in Dorotea would pay 60.15 percent.
https://www.thelocal.se/20180111/does-swedens-tax-system-rea...
That sounds higher than the US. Maybe not that much higher than particularly high tax places like NYC, but compared to the US on average, yeah that sounds high.
That taxes there are also higher on the middle class, yeah I don't dispute that.
> So on average, those in the highest earnings bracket will pay 56 percent of their taxable income to the taxman (31 percent in local income tax plus 25 percent in national income tax), but a top earner living in Dorotea would pay 60.15 percent.
https://www.thelocal.se/20180111/does-swedens-tax-system-rea...
That sounds higher than the US. Maybe not that much higher than particularly high tax places like NYC, but compared to the US on average, yeah that sounds high.
That taxes there are also higher on the middle class, yeah I don't dispute that.
Marginal tax rate in places with most top earners, like California and New York, is around 50%, if you add together both federal and state taxes.
Just used a tax calculator, in Stockholm gross of 500k USD annually was net 210k USD: https://se.neuvoo.com/tax-calculator/?iam=&uet_calculate=cal...
In NYC it'd be net 284k: https://smartasset.com/taxes/new-york-tax-calculator#xyAZi4N...
So yeah, it's much higher in Sweden. The effective tax rates are 58% vs 43%.
In NYC it'd be net 284k: https://smartasset.com/taxes/new-york-tax-calculator#xyAZi4N...
So yeah, it's much higher in Sweden. The effective tax rates are 58% vs 43%.
> Instead of trying to figure out those factors and mitigate them so everyone has an equal chance, why don't we just say fuck it, and tax the winners more heavily?
Because it reduces the incentive to try to be a winner. The government might get a bigger piece of the pie, but the whole pie will be smaller. More importantly, since we live in regime of economic growth, this kind of policy can have extremely significant impact down the line: over 30 years, the difference between 2% and 3% economic growth is really, really large. Thus, increasing taxes today might result in money to redistribute today, but less money to redistribute 30 years from now.
Most governments fortunately understand it, and so in 1980s and 90s significantly reduced income tax rates in top brackets, and are in no mood for raising them. The tax rates for top earners in Sweden and Norway are about the same as they are in the US. The biggest difference between them and the US in terms of taxation is that Sweden, Norway, and other European welfare states typically tax the middle class much, much more than the US does. The welfare state in Germany, France, Norway or Sweden is not funded primarily by the "winners", it is funded by high taxes on people with incomes rather close to the median.
Because it reduces the incentive to try to be a winner. The government might get a bigger piece of the pie, but the whole pie will be smaller. More importantly, since we live in regime of economic growth, this kind of policy can have extremely significant impact down the line: over 30 years, the difference between 2% and 3% economic growth is really, really large. Thus, increasing taxes today might result in money to redistribute today, but less money to redistribute 30 years from now.
Most governments fortunately understand it, and so in 1980s and 90s significantly reduced income tax rates in top brackets, and are in no mood for raising them. The tax rates for top earners in Sweden and Norway are about the same as they are in the US. The biggest difference between them and the US in terms of taxation is that Sweden, Norway, and other European welfare states typically tax the middle class much, much more than the US does. The welfare state in Germany, France, Norway or Sweden is not funded primarily by the "winners", it is funded by high taxes on people with incomes rather close to the median.
I see people make the argument that it will reduce 'incentives to do well' all the time... but why is that so accepted? The net gain for 'winning' is always going to be positive, so it will always be better to win than to not... most people who work really hard to 'win' have that drive in them to succeed regardless of the actual amount of money they make.
Really, after enough millions, the extra money isn't really changing their life... yet many still are driven to keep 'winning'... it clearly isn't about having the money to buy things at that point, it is about an internal drive. That won't change if we tax at a higher rate.
As for it hurting the economy, what evidence do you have of that? If we use the extra tax dollars to provide UBI, this will cause economic growth as there are more consumers with money to spend. While inflation would be a worry, our modern economy has shown that we have a lot of latent productive capacity (and a lot of goods that don't require more resources to produce, like digital goods) that mitigate the inflation risk.
Really, after enough millions, the extra money isn't really changing their life... yet many still are driven to keep 'winning'... it clearly isn't about having the money to buy things at that point, it is about an internal drive. That won't change if we tax at a higher rate.
As for it hurting the economy, what evidence do you have of that? If we use the extra tax dollars to provide UBI, this will cause economic growth as there are more consumers with money to spend. While inflation would be a worry, our modern economy has shown that we have a lot of latent productive capacity (and a lot of goods that don't require more resources to produce, like digital goods) that mitigate the inflation risk.
> I see people make the argument that it will reduce 'incentives to do well' all the time... but why is that so accepted?
Maybe insights from microeconomics 101 about what happens with supply curve when you drive a tax wedge into it, along with hundreds of papers published estimating the elasticity of labor supply have something to do with it. Yes, labor is elastic.
See for example this review from Congressional Budget Office, i.e. people who actually care a lot about what taxes are: https://www.cbo.gov/sites/default/files/112th-congress-2011-...
> The net gain for 'winning' is always going to be positive, so it will always be better to win than to not...
Yes, but is it better than taking some time off to do some yacht sailing? If government takes most of your winnings, why not reduce your hours slightly and use it for more leisure instead?
> Really, after enough millions, the extra money isn't really changing their life... yet many still are driven to keep 'winning'... it clearly isn't about having the money to buy things at that point, it is about an internal drive. That won't change if we tax at a higher rate.
For some, it won't, but for others, it will. Lots of people in fact do give up after enough millions. You cannot only focus on things that are seen, like Elon Musk's drive, but you also have to think about things that are unseen, like that apartment building developer worth a few millions whose name nobody knows outside his local industry, who'll simply decide to retire early instead of putting effort into organizing construction of another apartment complex.
> As for it hurting the economy, what evidence do you have of that?
If you increase taxes, then, since labor supply is not perfectly inelastic, people will work less, so less work will be done. This is some basic economics. The discussion on this question in the field is not about whether taxes hurt the economy, but rather how much they do. Some people think that they don't hurt much, others think that they hurt a lot, but that they do is really a consensus view, and in fact common sense.
> If we use the extra tax dollars to provide UBI, this will cause economic growth as there are more consumers with money to spend.
No, this is just the broken window fallacy. At best, there's exactly the same amount of money to spend, you're simply moving the money around between people. If you tax some people to provide UBI for others, the same money is spent either way, it's just different people who spend it. In reality, since taxes have distortionary effects, there will be less money to spend overall: since redistribution is typically from more to less wealthy, and since less wealthy typically spend more on consumption than on investment than more wealthy people, reduced investment will in fact reduce the growth.
Maybe insights from microeconomics 101 about what happens with supply curve when you drive a tax wedge into it, along with hundreds of papers published estimating the elasticity of labor supply have something to do with it. Yes, labor is elastic.
See for example this review from Congressional Budget Office, i.e. people who actually care a lot about what taxes are: https://www.cbo.gov/sites/default/files/112th-congress-2011-...
> The net gain for 'winning' is always going to be positive, so it will always be better to win than to not...
Yes, but is it better than taking some time off to do some yacht sailing? If government takes most of your winnings, why not reduce your hours slightly and use it for more leisure instead?
> Really, after enough millions, the extra money isn't really changing their life... yet many still are driven to keep 'winning'... it clearly isn't about having the money to buy things at that point, it is about an internal drive. That won't change if we tax at a higher rate.
For some, it won't, but for others, it will. Lots of people in fact do give up after enough millions. You cannot only focus on things that are seen, like Elon Musk's drive, but you also have to think about things that are unseen, like that apartment building developer worth a few millions whose name nobody knows outside his local industry, who'll simply decide to retire early instead of putting effort into organizing construction of another apartment complex.
> As for it hurting the economy, what evidence do you have of that?
If you increase taxes, then, since labor supply is not perfectly inelastic, people will work less, so less work will be done. This is some basic economics. The discussion on this question in the field is not about whether taxes hurt the economy, but rather how much they do. Some people think that they don't hurt much, others think that they hurt a lot, but that they do is really a consensus view, and in fact common sense.
> If we use the extra tax dollars to provide UBI, this will cause economic growth as there are more consumers with money to spend.
No, this is just the broken window fallacy. At best, there's exactly the same amount of money to spend, you're simply moving the money around between people. If you tax some people to provide UBI for others, the same money is spent either way, it's just different people who spend it. In reality, since taxes have distortionary effects, there will be less money to spend overall: since redistribution is typically from more to less wealthy, and since less wealthy typically spend more on consumption than on investment than more wealthy people, reduced investment will in fact reduce the growth.
I have a huge problem with someone who says, "We should just make compensation merit-based rather than based on accidents of birth", because it refuses to acknowledge that we already live in that system. It's just that the "merit" is stuff that happens to correlate strongly to accidents of birth (like IQ, speaking the "correct" dialect, being well-educated, and so forth).
It turns into, "our system is broken, we need to system _harder_", and is just as much nonsense.
It turns into, "our system is broken, we need to system _harder_", and is just as much nonsense.
This sounds like a great idea. Take away the ability to freely enter into contracts with other people and come to a mutually agreeable price. Rather, replace that with top down price controls.
Never been done before!
Never been done before!
There's a new book out by an econ prof with an Italian sounding name that is very relevant to this. It revisits economic ideas about value and reminds us that the path we're down, completely subjective utility value, is possibly not how we ought to think about it. Of course neither is eg labour theory of value, but it sounds like there's some in-depth discussion of the historical idea of value in there. Totally forgot the lady's name.
Thomas Piketty?
https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
That came out in 2013, and he's a man.
Mariana Mazzucato
https://www.goodreads.com/book/show/29502362-the-value-of-ev...
Mariana Mazzucato
https://www.goodreads.com/book/show/29502362-the-value-of-ev...
I considered that perhaps there was a misremembered gender, and the ending of Piketty can be interpreted as Italian sounding, and it's the most talked about economic book of the last 10 years or so.
The Value of Everything - Mariana Mazzucato
Valuing productivity is already reducing U.S. inequality. Lawyers and doctors can’t prevent people from getting better educated nor can they completely bar technological advances. Sure they can take short-term measures like regulating DNA or law-tech companies, etc. But many people have an inherent desire to get higher quality health and legal help for cheaper. Regulators can’t and won’t ever completely stop the decentralization movement.
Ok, we just ignore bunch of people who don't give a damn about being productive. Bunch of people who don't give a damn about society. Bunch of people who don't give a damn about anything.
For me biggest problem with this interview is ... not everyone wants to be productive, not everyone wants to have a new car, not everyone wants to have an education.
Guess what, society still has to care about those people and still has to allow them to "not give a damn". Pink colored glasses and saying "job hierarchy is to blame, we can all be productive" is foolish. You cannot force people to work "because inequality". (there were people who tried to do that but where I live we call them nazis and commies)
On the other hand I agree, most important thing is economic mobility, if someone wants a new car and he works for it, he should get it. If someone wants to be Phd in physics and she works hard and has results, no one should prevent that. But we are just water bags with silly emotions so we get together with other bags of water to feel important and to prevent other bags of water from having nice things to feel even more important.
For me biggest problem with this interview is ... not everyone wants to be productive, not everyone wants to have a new car, not everyone wants to have an education.
Guess what, society still has to care about those people and still has to allow them to "not give a damn". Pink colored glasses and saying "job hierarchy is to blame, we can all be productive" is foolish. You cannot force people to work "because inequality". (there were people who tried to do that but where I live we call them nazis and commies)
On the other hand I agree, most important thing is economic mobility, if someone wants a new car and he works for it, he should get it. If someone wants to be Phd in physics and she works hard and has results, no one should prevent that. But we are just water bags with silly emotions so we get together with other bags of water to feel important and to prevent other bags of water from having nice things to feel even more important.
[deleted]
I feel valuing humanity, not productivity, could reduce inequality still further. Are disabled ("differently" abled) people to be starved because they are not productive enough?
Start taxing the very wealthy
virmundi(1)
Isn't this sort of a capitalist's spin on Marx's Labor Power theory? In such a system, a worker's productivity is roughly equal to their "power" in the marketplace.
Valuing PEOPLE over productivity, could reduce global inequality.
I find "socially valuable contributions" to be a disturbing phrase.
First, that implies there's some sort of authority - legal or otherwise - that determines "socially valuable."
Second, quite often society is wrong in what "it" values or finds popular.
Finally, I use "wrong" from my point of view. Obviously there are many definitions of "wrong" based on your ethics, morality, religion (or lack thereof), values, and preferences.
It sounds like yet another social credit system.. whoever runs it wins.