A Response to Paul Graham’s Article on Income Inequality(cryoshon.co)
cryoshon.co
A Response to Paul Graham’s Article on Income Inequality
http://cryoshon.co/2016/01/02/a-response-to-paul-grahams-article-on-income-inequality/
247 comments
"lower class are basically slaves"
You're going to compare working graveyards at 7-Eleven to slavery?
You should read a little bit about slavery and human trafficking. https://en.wikipedia.org/wiki/Slavery I suspect most slaves would not agree with you.
You're going to compare working graveyards at 7-Eleven to slavery?
You should read a little bit about slavery and human trafficking. https://en.wikipedia.org/wiki/Slavery I suspect most slaves would not agree with you.
> You're going to compare working graveyards at 7-Eleven to slavery?
> I suspect most slaves would not agree with you.
The abolitionist and former slave Frederick Douglass initially declared, "now I am my own master", upon taking a paying job. But later in life, he concluded to the contrary, "experience demonstrates that there may be a slavery of wages only a little less galling and crushing in its effects than chattel slavery, and that this slavery of wages must go down with the other"
https://en.wikipedia.org/wiki/Wage_slavery
> I suspect most slaves would not agree with you.
The abolitionist and former slave Frederick Douglass initially declared, "now I am my own master", upon taking a paying job. But later in life, he concluded to the contrary, "experience demonstrates that there may be a slavery of wages only a little less galling and crushing in its effects than chattel slavery, and that this slavery of wages must go down with the other"
https://en.wikipedia.org/wiki/Wage_slavery
It's true that post Civil War blacks weren't doing well. (Actually, a lot of whites weren't doing well either.)
But it's a real stretch of the imagination to say the current United States (especially post income tax and Social Security entitlements) is anywhere even close to post Civil War circumstances.
But it's a real stretch of the imagination to say the current United States (especially post income tax and Social Security entitlements) is anywhere even close to post Civil War circumstances.
His point was not about blacks, whites, or even the Civil War.
> Wage slavery refers to a situation where a person's livelihood depends on wages or a salary, especially when the dependence is total and immediate. It is a pejorative term used to draw an analogy between slavery and wage labor by focusing on similarities between owning and renting a person.
There is a difference between "slaves" in the popular sense (chains, beatings, whips, rape), and "slaves" in the economic sense, but both are premised upon the unjust abrogation of freedom at the hands of another.
This article describes the latter case quite well:
http://www.buzzfeed.com/jessicagarrison/the-new-american-sla...
> Wage slavery refers to a situation where a person's livelihood depends on wages or a salary, especially when the dependence is total and immediate. It is a pejorative term used to draw an analogy between slavery and wage labor by focusing on similarities between owning and renting a person.
There is a difference between "slaves" in the popular sense (chains, beatings, whips, rape), and "slaves" in the economic sense, but both are premised upon the unjust abrogation of freedom at the hands of another.
This article describes the latter case quite well:
http://www.buzzfeed.com/jessicagarrison/the-new-american-sla...
The quote was from Frederick Douglass, a black man living during the Civil War.
Impossible to know for certain, but I suspect he wouldn't be terribly pleased with a comparison of the current "lower class" to real slaves.
Impossible to know for certain, but I suspect he wouldn't be terribly pleased with a comparison of the current "lower class" to real slaves.
Comparing the lower class to real slaves was exactly and explicitly what he did do. Or are your scare quotes meant to imply that the modern lower class isn't a "real" lower class?
Masters actually bought slaves. They weren't cheap. So they had to, you know, feed them and care for them somewhat. Now when you aren't needed at the 7/11 you can almost just go die in a fire: have you seen was homelessness is like in the US? I have.
You do understand that this is basically the argument that slaveowners used to justify continuing slavery in the 19th century?
It would be a mistake to say I'm advocating slavery by making this comparison. The slave to a master is just like an automobile: you have to put gas into it to make it go. Turning a human being into something the equivalent of an automobile is an abomination. But I don't really think wage slavery is really all that different at the end of the day. My point is both are abominable.
that may have not been your intent, but it does reveal the error in your thinking. You may call both abominable, but do you not see the fundamental reason why one is categorically worse than the other? If not then you are doomed to advocate for the very problems that were the root of the atrocity of slavery, just in other, possibly more cryptic and slyly paternalistic forms.
Except that no one is justifying slavery, it's just the opposite.
You know it is a good time to re-think the current economical distribution when the slavery looks like a valid alternative to the status quo.
[deleted]
Slaves weren't cheap, but the income and wealth inequality of those times was incredibly larger than today. In many jurisdictions slaves actually were just property, not people. Wealthy slaves owners still could kill slaves just for fun, without feeling much financial loss. Like today someone could buy a Tesla and then decide to burn it.
(Though we should recall that the rights of slaves and whether slave-owner could be prosecuted for manslaughter obviously depended on era and jurisdiction).
I find it astonishing that people compare modern-day income equality and the position of the poor in our time, in the Western world, to that of historical slavery (slavery in United States, or slavery in other slave-based economies in the New World prior to 19th century, not to mention slavery in the Old World which continued officially well into later half of 20th century).
In the West, no one is legally killing, whipping or dismembering the poor workers for not being obedient. Even the poor are still free to leave a place if they find life there unsustainable. Modern-day comparisons to "slavery" typically involve something along the lines "you are expected to do something in exchange for money that is given to you and you feel unpleasant about it".
It just doesn't compare with the actual, terrible injustice of real slavery.
(Though we should recall that the rights of slaves and whether slave-owner could be prosecuted for manslaughter obviously depended on era and jurisdiction).
I find it astonishing that people compare modern-day income equality and the position of the poor in our time, in the Western world, to that of historical slavery (slavery in United States, or slavery in other slave-based economies in the New World prior to 19th century, not to mention slavery in the Old World which continued officially well into later half of 20th century).
In the West, no one is legally killing, whipping or dismembering the poor workers for not being obedient. Even the poor are still free to leave a place if they find life there unsustainable. Modern-day comparisons to "slavery" typically involve something along the lines "you are expected to do something in exchange for money that is given to you and you feel unpleasant about it".
It just doesn't compare with the actual, terrible injustice of real slavery.
The difference between slaves and workers is that dying or becoming too wounded to work is an expense, for slaves.
Why derail this over a word? Wage slavery is a well-known and widely-used term that is useful.
> I suspect most slaves would not agree with you.
No kidding! Believe it or not, even in 2016, there are tens of millions of people around the world living in actual slavery[0]. Most of them would probably still literally give a kidney to trade places with one of these lower-class people in the US.
[0] https://en.wikipedia.org/wiki/Contemporary_slavery
No kidding! Believe it or not, even in 2016, there are tens of millions of people around the world living in actual slavery[0]. Most of them would probably still literally give a kidney to trade places with one of these lower-class people in the US.
[0] https://en.wikipedia.org/wiki/Contemporary_slavery
yes - in order to say something that is true, I need to say something that is false. You'd be right to call me on it, and I'd have it no other way.
Back in the days of slavery you were expected to provide some care when they got old. If you're an employee you can be cast away to go die in the street.
"Fifty dollars reward, for the negro Jim Blake--has a piece cut out of each ear, and the middle finger of the left hand cut off to the second joint."
[deleted]
[deleted]
> in order to say something that is true, I need to say something that is false.
What does this mean?
What does this mean?
Language can be used in a rigorous, technical way with definitions and as close to accurately as possible. Like in a technical manual or programming language.
Or it can be used in an expressive way, the way that normal people write and talk and communicate, where people say things that are technically inaccurate but express meaning and and allow the listener or reader to understand the position, emotions, facts, thoughts and experiences of the speaker or writer.
For example, "I'm starving, let's get a bite to eat." Do you say "No you aren't, that's technically inaccurate, how dare you minimize the concerns of the starving multitudes across the globe" or do you say "Okay." because you understand what he means? That first response is how the "that's not real slavery!" thread of discussion here looks to the rest of us.
I think what he meant by that was he is communicating in the second, expressive way.
Or it can be used in an expressive way, the way that normal people write and talk and communicate, where people say things that are technically inaccurate but express meaning and and allow the listener or reader to understand the position, emotions, facts, thoughts and experiences of the speaker or writer.
For example, "I'm starving, let's get a bite to eat." Do you say "No you aren't, that's technically inaccurate, how dare you minimize the concerns of the starving multitudes across the globe" or do you say "Okay." because you understand what he means? That first response is how the "that's not real slavery!" thread of discussion here looks to the rest of us.
I think what he meant by that was he is communicating in the second, expressive way.
Church.
I wrote a blog post recently that somewhat excoriated the technical community for a blunt and mechanistic approach to argumentation along these lines:
http://likewise.am/2015/12/06/nitpicking-is-the-lowest-form-...
I wrote a blog post recently that somewhat excoriated the technical community for a blunt and mechanistic approach to argumentation along these lines:
http://likewise.am/2015/12/06/nitpicking-is-the-lowest-form-...
I use the term 'slavery' because its descriptive, not because its literally true.
I do understand that 711 shift workers don't have their feet cut off if they leave.
When I say things like "we need a bit of Socialism right about now" .. I don't mean hardcore enforced-total-equality Socialism, I mean nice Socialism like the kind Bernie Sanders has been raving about.
I do understand that 711 shift workers don't have their feet cut off if they leave.
When I say things like "we need a bit of Socialism right about now" .. I don't mean hardcore enforced-total-equality Socialism, I mean nice Socialism like the kind Bernie Sanders has been raving about.
> I don't mean hardcore enforced-total-equality Socialism, I mean nice Socialism like the kind Bernie Sanders has been raving about.
It's taboo to point this out, especially on HN, but I'm feeling bold today:
You can't discuss the socialist policies of Western European countries without addressing their wealth. And you can't discuss the current wealth of Western European countries without acknowledging the process by which they acquired that wealth.
The "nice socialism that Sanders has been raving about" is the kind that is practiced in countries with a long history of colonization and slavery[0]. During this timeframe, they "earned" a massive amount of money by extracting resources from people that they literally enslaved. This started before the 17th century and continued into the 20th century.
Those people who were colonized and enslaved (and their countries) are still feeling the effects of that today, and they would not be so quick to describe that kind of socialism as "nice".
[0] Denmark and Sweden are the two that Sanders has called out specifically by name.
It's taboo to point this out, especially on HN, but I'm feeling bold today:
You can't discuss the socialist policies of Western European countries without addressing their wealth. And you can't discuss the current wealth of Western European countries without acknowledging the process by which they acquired that wealth.
The "nice socialism that Sanders has been raving about" is the kind that is practiced in countries with a long history of colonization and slavery[0]. During this timeframe, they "earned" a massive amount of money by extracting resources from people that they literally enslaved. This started before the 17th century and continued into the 20th century.
Those people who were colonized and enslaved (and their countries) are still feeling the effects of that today, and they would not be so quick to describe that kind of socialism as "nice".
[0] Denmark and Sweden are the two that Sanders has called out specifically by name.
Many countries in Western Europe have been destroyed and rebuilt multiple times since the 19th century when slavery was practiced.
> Many countries in Western Europe have been destroyed and rebuilt multiple times
This doesn't change the fact that the current economic status of Denmark and Sweden today is directly linked to their status as colonial powers and slaveholders from the 17th-20th century.
> since the 19th century when slavery was practiced.
This entire subthread began with the claim that being "low-class" in the US is tantamount to slavery. If that's the case, there should be no problem with accepting colonialism, as it was practiced by Sweden into the late 19th century and Demark into the early 20th century, as a form of slavery, since it resembles slavery far more closely than being a member of the working poor in the US.
This doesn't change the fact that the current economic status of Denmark and Sweden today is directly linked to their status as colonial powers and slaveholders from the 17th-20th century.
> since the 19th century when slavery was practiced.
This entire subthread began with the claim that being "low-class" in the US is tantamount to slavery. If that's the case, there should be no problem with accepting colonialism, as it was practiced by Sweden into the late 19th century and Demark into the early 20th century, as a form of slavery, since it resembles slavery far more closely than being a member of the working poor in the US.
So perhaps you can explain why, whatever this wealth was providing Denmark's 'economic status' the Nazi's didn't plunder it when they occupied it during WWII?
https://en.wikipedia.org/wiki/Denmark_in_World_War_II
AFAICT, Denmark (and Germany, Japan, China, Singapore, South Korea, and everybody else) have whatever 'economic status' they have due to a lot more to what happened during the post WWII years than to colonial times.
https://en.wikipedia.org/wiki/Denmark_in_World_War_II
AFAICT, Denmark (and Germany, Japan, China, Singapore, South Korea, and everybody else) have whatever 'economic status' they have due to a lot more to what happened during the post WWII years than to colonial times.
Yes, and attributing Sweden's wealth to slave trade is disingenuous. Attributing it to WWII years and selling ball bearings to Nazis is more relevant - but then, who in their position wouldn't have done that? I.e. stay out of the nasty war and trade, if it helps to keep peace on borders.
Late 19th century, early 20th, Sweden was one of the poorest countries in Europe. The wealth of Sweden was accumulated post-WWII when the rest of Europe stood in ruins and needed to be rebuilt, not by being a colonial force to be reckoned with (it never was).
> Late 19th century, early 20th, Sweden was one of the poorest countries in Europe. not by being a colonial force to be reckoned with (it never was)
I mean, yes, if you compare Sweden only to the really lucrative colonizers, it'll look "poor" by comparison. But all you're really saying is that Sweden was less effective as a colonial power than its neighbors who were even "better" at it (England, France, etc.). That doesn't change the original point. If you look beyond simply Europe at where Sweden was with respect to the rest of the world, especially the regions that were colonized and enslaved, it's clear where they stood, and clear how much they benefited by being the ones who colonized, as opposed to the ones who were colonized.
The point is, you can't just look at "nice European socialism" in a vacuum and ignore the reasons why that philosophy has succeeded in Western Europe and why that exact same philosophy has been an empirical disaster in countries that were previously colonies of Western European powers and are still impoverished enough that they cannot export the working class down the economic chain any further (the way Western European powers - and the US as well - have).
I mean, yes, if you compare Sweden only to the really lucrative colonizers, it'll look "poor" by comparison. But all you're really saying is that Sweden was less effective as a colonial power than its neighbors who were even "better" at it (England, France, etc.). That doesn't change the original point. If you look beyond simply Europe at where Sweden was with respect to the rest of the world, especially the regions that were colonized and enslaved, it's clear where they stood, and clear how much they benefited by being the ones who colonized, as opposed to the ones who were colonized.
The point is, you can't just look at "nice European socialism" in a vacuum and ignore the reasons why that philosophy has succeeded in Western Europe and why that exact same philosophy has been an empirical disaster in countries that were previously colonies of Western European powers and are still impoverished enough that they cannot export the working class down the economic chain any further (the way Western European powers - and the US as well - have).
I think you're just really really attached to the idea that colonialism explains the modern world.
Over the course of the 20th century, the Ottomon and British empires crumbled. World War II happened. The US and Soviet Union became superpowers, there was a Cold War, and the Soviet Union split apart. The US pursued aggressively open trade. Western Europe unified to a common economic zone. World power structures have been reorganized several times over since colonial times.
For example, how does your theory explain Singapore going from a British colony, occupied by Japan during WWII, to US$56,319 GDP per capita in 2014?
https://en.wikipedia.org/wiki/Economy_of_Singapore
Over the course of the 20th century, the Ottomon and British empires crumbled. World War II happened. The US and Soviet Union became superpowers, there was a Cold War, and the Soviet Union split apart. The US pursued aggressively open trade. Western Europe unified to a common economic zone. World power structures have been reorganized several times over since colonial times.
For example, how does your theory explain Singapore going from a British colony, occupied by Japan during WWII, to US$56,319 GDP per capita in 2014?
https://en.wikipedia.org/wiki/Economy_of_Singapore
> you're just really really attached to the idea that colonialism explains the modern world.
You're putting words in my mouth. I never said anything of the sort.
I said that one can't understand Western European socialism (the kind which OP appears to advocate) without understanding this aspect of those countries' history. The implication is that calling such socialism "nice" is ignoring and whitewashing the negative side, both historical and contemporary.
In any case, I know better than to seriously engage in a discussion about this on HN; it's really not the forum for these sorts of conversations.
You're putting words in my mouth. I never said anything of the sort.
I said that one can't understand Western European socialism (the kind which OP appears to advocate) without understanding this aspect of those countries' history. The implication is that calling such socialism "nice" is ignoring and whitewashing the negative side, both historical and contemporary.
In any case, I know better than to seriously engage in a discussion about this on HN; it's really not the forum for these sorts of conversations.
I'm sorry to inform you that slavery is alive and well in Western Europe: http://www.theguardian.com/world/2015/may/16/lithuanian-guil...
No, you just linked to an article proving that it's illegal and prosecuted when it occurs.
Both have in common the order-giver and order-obeyer.
Of course, I agree wage slavery is better than chattel slavery. Better to have some choice of master than one imposed on you. (Though slaveowners made the interesting argument that they must take care of their workers because they own them, unlike the capitalist who merely rents them.)
In the US, the prison system replaced slavery as the mechanism to control the black population. So the US has not improved much in that regard, with even children killed in broad daylight by the state.
Of course, I agree wage slavery is better than chattel slavery. Better to have some choice of master than one imposed on you. (Though slaveowners made the interesting argument that they must take care of their workers because they own them, unlike the capitalist who merely rents them.)
In the US, the prison system replaced slavery as the mechanism to control the black population. So the US has not improved much in that regard, with even children killed in broad daylight by the state.
> In the US, the prison system replaced slavery as the mechanism to control the black population. So the US has not improved much in that regard, with even children killed in broad daylight by the state.
> So, just as "All Lives Matter" is not a good response to the "Black Lives Matter" movement,
It's tangential, but can you please explain this part? It seems to me that "All Lives Matter" really is the more apt phrase, because it shifts the focus from an us-versus-them conflict to actual justice.
Edit: Got it. I'll stop being part of the problem. The only remaining question is this: What's the most effective way to be part of the solution?
It's tangential, but can you please explain this part? It seems to me that "All Lives Matter" really is the more apt phrase, because it shifts the focus from an us-versus-them conflict to actual justice.
Edit: Got it. I'll stop being part of the problem. The only remaining question is this: What's the most effective way to be part of the solution?
Of course everyone believes that all lives matter. But the context is important. If someone says "black lives matter" and your response is "ALL lives matter", you're not just saying you think all lives matter, you're saying you don't think it's a racial issue. And willfully ignoring the problem of racism is what has allowed racism to flourish in, say, police departments.
So when you say "all lives matter" you're essentially saying "This problem that effects specifically black people doesn't matter. Let's focus on the more general and still important but less urgent problem that effects white people too, and maybe the problems facing black people will go away". It's like if someone comes to you with statistics about how horribly out of proportion police brutality is towards African Americans and your response is an anecdote about this one time the cops beat up a white guy. Or if someone brings up how serious sexual assault and harassment is for women and all you talk about is how men can be sexually harassed too. If you willfully refuse to recognize the problem, you're part of it.
So when you say "all lives matter" you're essentially saying "This problem that effects specifically black people doesn't matter. Let's focus on the more general and still important but less urgent problem that effects white people too, and maybe the problems facing black people will go away". It's like if someone comes to you with statistics about how horribly out of proportion police brutality is towards African Americans and your response is an anecdote about this one time the cops beat up a white guy. Or if someone brings up how serious sexual assault and harassment is for women and all you talk about is how men can be sexually harassed too. If you willfully refuse to recognize the problem, you're part of it.
>you're saying you don't think it's a racial issue.
Correct, it isn't a racial issue. Take the two most well-known cases for instance, Trayvon Martin and Michael Brown.
Trayvon Martin assaulted Zimmerman unilaterally (Zimmerman never threw a punch,) had him in a ground-and-pound position and was bashing the back of Zimmerman's head onto the sidewalk while Zimmerman repeatedly screamed for help. If any white seventeen-year-old had done the same thing there would be zero outcry about recognizing the need for self-defense on the part of the neighborhood watchman. If a white kid in a hoodie was walking behind houses in the rain and looking into windows, nobody would label it "profiling" when a neighborhood watch leader called the police, since that's obviously questionable behavior.
Michael Brown had just committed robbery at a convenience store, then he assaulted a cop who asked him to walk on the sidewalk, then tried to wrestle away the cop's gun. Forensics shows Michael Brown didn't have his "hands up" when he was shot, meaning the witnesses all lied about the situation. Again, if a white teenager had committed strongarmed robbery and proceeded to try to grab a cops gun there would be literally zero sympathy or outcry when he was shot in self-defense by the cop. People would basically just call the dead teenager "trailer-trash," or something equally derogatory and move on.
The only factor race plays in any of this is that we would never have even discussed or heard of these absurd cases had the so-called "victims" not been black. If race enters into the narrative at all it's in the form of black privilege / supremacy, in that black communities seem to believe these incredibly violent assaults are fine and don't merit self-defense for some reason, solely due to skin color.
More accurately, it's all hyped up and manufactured by the media to stoke division because nothing sells ad space like impassioned controversy.
Correct, it isn't a racial issue. Take the two most well-known cases for instance, Trayvon Martin and Michael Brown.
Trayvon Martin assaulted Zimmerman unilaterally (Zimmerman never threw a punch,) had him in a ground-and-pound position and was bashing the back of Zimmerman's head onto the sidewalk while Zimmerman repeatedly screamed for help. If any white seventeen-year-old had done the same thing there would be zero outcry about recognizing the need for self-defense on the part of the neighborhood watchman. If a white kid in a hoodie was walking behind houses in the rain and looking into windows, nobody would label it "profiling" when a neighborhood watch leader called the police, since that's obviously questionable behavior.
Michael Brown had just committed robbery at a convenience store, then he assaulted a cop who asked him to walk on the sidewalk, then tried to wrestle away the cop's gun. Forensics shows Michael Brown didn't have his "hands up" when he was shot, meaning the witnesses all lied about the situation. Again, if a white teenager had committed strongarmed robbery and proceeded to try to grab a cops gun there would be literally zero sympathy or outcry when he was shot in self-defense by the cop. People would basically just call the dead teenager "trailer-trash," or something equally derogatory and move on.
The only factor race plays in any of this is that we would never have even discussed or heard of these absurd cases had the so-called "victims" not been black. If race enters into the narrative at all it's in the form of black privilege / supremacy, in that black communities seem to believe these incredibly violent assaults are fine and don't merit self-defense for some reason, solely due to skin color.
More accurately, it's all hyped up and manufactured by the media to stoke division because nothing sells ad space like impassioned controversy.
Regarding witnesses and lying. Check out this Ted talk https://www.ted.com/talks/scott_fraser_the_problem_with_eyew...
In the US, "Black Lives Matter" was a phrase adopted by a protest movement to draw attention quite specifically to the way black people are treated. Rather than addressing this injustice, the right wing responded by attacking the name of the movement. It was seen as diversionary and insincere, since the suggestion of the phrase "All Lives Matter" was not accompanied by any sincere effort to amend the situation.
The cost of saying "All Lives Matter" in response to "Black Lives Matter" is that you are seen to be ignoring the main issue.
Its not that its wrong, its that its perhaps insensitive - a certain amount of empathy and solidarity could be a start in acknowledging the problem.
So while "All Lives Matter" is truer, its less useful at the current moment in time when Black people are experiencing real pain, and we have a huge problem that needs to be addressed urgently.
Its not that its wrong, its that its perhaps insensitive - a certain amount of empathy and solidarity could be a start in acknowledging the problem.
So while "All Lives Matter" is truer, its less useful at the current moment in time when Black people are experiencing real pain, and we have a huge problem that needs to be addressed urgently.
"All lives matter," as a response to "Black lives matter," carries roughly the same implications as "Everybody hurts!" would, as a response to "I'm hurting real bad right now!"
It goes a little further than what the other people are saying. It's not just that the reply "All Lives Matter" is ignoring the issue of police violence against African Americans. It's being used as a defense of the police officers who did the killings, an apologistic post-hoc rationalization that the cop was defending himself. When a person uses "All Lives Matter", what they really mean is "cop's lives matter more".
The easiest thing you can do is donate to the ACLU. You could probably also find part-time volunteer work at any of the many institutions trying to end or mitigate poverty.
The easiest thing you can do is donate to the ACLU. You could probably also find part-time volunteer work at any of the many institutions trying to end or mitigate poverty.
>When a person uses "All Lives Matter", what they really >mean is "cop's lives matter more"
No, I understand it to be "police can sometimes use force unjustifiably towards anyone, of any race." If a cop murders someone, s/he should be held responsible (sadly, they are not). The reason that more black people get murdered by police is that they (blacks) get in trouble more often (which is NOT a justification to kill them)
https://en.wikipedia.org/wiki/Race_and_crime_in_the_United_S...
No, I understand it to be "police can sometimes use force unjustifiably towards anyone, of any race." If a cop murders someone, s/he should be held responsible (sadly, they are not). The reason that more black people get murdered by police is that they (blacks) get in trouble more often (which is NOT a justification to kill them)
https://en.wikipedia.org/wiki/Race_and_crime_in_the_United_S...
> No, I understand it to be "police can sometimes use force unjustifiably towards anyone, of any race."
This would be true if this is what the people saying it demonstrated beliefs that were congruent with their actions. However, the overwhelming majority (to the point where the counterparty is anecdotal and, frankly, possibly mythical) use it to establish a fundamentally conservative defense of the status quo. I mean--"All Lives Matter" sounds good. Except it is used as a direct and intentional response to the institutional prejudice and societal control via police that is applied to black people, and when you look at deeds instead of words, that's super fucked-up.
"All Lives Matter" requires intentionally misunderstanding "Black Lives Matter." What it means, and what they no-sell as hard as they possibly, possibly can, is that it's really "Black Lives Matter, Too". Because right now, to society at large, black lives don't matter.
Deeds, not words, and the deeds are uniformly bad.
This would be true if this is what the people saying it demonstrated beliefs that were congruent with their actions. However, the overwhelming majority (to the point where the counterparty is anecdotal and, frankly, possibly mythical) use it to establish a fundamentally conservative defense of the status quo. I mean--"All Lives Matter" sounds good. Except it is used as a direct and intentional response to the institutional prejudice and societal control via police that is applied to black people, and when you look at deeds instead of words, that's super fucked-up.
"All Lives Matter" requires intentionally misunderstanding "Black Lives Matter." What it means, and what they no-sell as hard as they possibly, possibly can, is that it's really "Black Lives Matter, Too". Because right now, to society at large, black lives don't matter.
Deeds, not words, and the deeds are uniformly bad.
> the overwhelming majority (to the point where the
> counterparty is anecdotal and, frankly, possibly
> mythical) use it to establish a fundamentally
> conservative defense of the status quo
http://www.npr.org/sections/itsallpolitics/2015/06/24/417112... http://www.cnn.com/2015/07/18/politics/bernie-sanders-netroo...
If it's a default response for you (the generic you, not you specifically) to say it rather than think through the problem...I mean, that says a lot about societal awareness, and I can't really find much sympathy for that, but you're right in that some well-meaning idiots might view it as a surface-level thing. But those well-meaning, superficial people aren't in the discussion in the first place. Even Hillary Clinton--who should have known better--isn't going to BLM events explicitly as counter-protestors to chant "All Lives Matter" at them. Right now, as 2016 opens, "All Lives Matter" is the dog whistle of dog whistles.
My point is that it's not just a question of societal awareness. The links in my GP post show Secretary Clinton and Governor O'Malley making exactly this mistake. They are not idiots and their ambitions depend on courting black voters, so they are acutely aware of the issues affecting black people.
The phrase is probably the best you can do in a slogan, but it is cryptic.
The phrase is probably the best you can do in a slogan, but it is cryptic.
> they are acutely aware of the issues affecting black people
See...I really don't think they are (or at least were before they got shellacked). I think it's so profoundly pervasive that even at the highest levels it hasn't been An Issue until very recently. So it's pretty tough for me to see that. (While I don't know O'Malley, I don't pay attention to inconsequentials, I think Hillary Clinton is a status-quo-favoring moderate on most things, which probably doesn't make me more sympathetic.)
See...I really don't think they are (or at least were before they got shellacked). I think it's so profoundly pervasive that even at the highest levels it hasn't been An Issue until very recently. So it's pretty tough for me to see that. (While I don't know O'Malley, I don't pay attention to inconsequentials, I think Hillary Clinton is a status-quo-favoring moderate on most things, which probably doesn't make me more sympathetic.)
yes, of course
What's interesting about this election is that so much of the anger, especially from lower class whites, is being channeled into the Republican party. It's not a cry for wealth distribution, it's a cry against immigrants supposedly taking our jobs. And that's a big failing by the Democrats to tap into that anger.
But I think this is going to be typical of elections going forward, red hot anger being directed at the system. It's not healthy for society and I don't see it ending up anywhere good.
But I think this is going to be typical of elections going forward, red hot anger being directed at the system. It's not healthy for society and I don't see it ending up anywhere good.
Wealth distribution is a big problem, because the richest can essentially buy the government (and that's exactly what they have been doing) [http://www.nytimes.com/interactive/2015/10/11/us/politics/20...]
But if you took the money from the 1% and distributed it to everyone, it would probably amount to a few thousand dollars each, at best.
The reason for lack of jobs is the they all went to India, China, etc.
As for immigrants, don;t you think there is something awfully wrong with the fact that Massachusetts for years provided housing and money to the Tsarnaev family (the Boston bombers and their parents), yet war veterans are often homeless, because there is never any money left to take care of them?
But if you took the money from the 1% and distributed it to everyone, it would probably amount to a few thousand dollars each, at best.
The reason for lack of jobs is the they all went to India, China, etc.
As for immigrants, don;t you think there is something awfully wrong with the fact that Massachusetts for years provided housing and money to the Tsarnaev family (the Boston bombers and their parents), yet war veterans are often homeless, because there is never any money left to take care of them?
This buying the government is terrifyingly real. In university I once went to a dinner/seminar hosted by one of the top three law firms in DC, where we were instructed on how exactly to bribe congressmen. It turns out to buy a vote, a Representative is 10k and a Senator is 20k. They walked us through how we could give bonuses to employees with the understanding that part of that money would be written as maximum individual size checks to the campaigns. We were assured that it was not illegal as long as these bonuses and donations to not match in space and time. The law firm offered to prepare the appropriation text to be inserted into an omnibus. Then once it passed the money would be laundered through the Dept of Education, the Dept Labor, the Dept of Defense, or other Dept that would take a 15% cut for the service. Then we would be awarded the money, or get a tax credit, or so on. The law firm charged another 15% for their service, and would charge half now half on delivery.
This is the instruction that the children of the ruling elite are getting at Ivy Leagues, it permeates the entire culture of the privileged class.
This is the instruction that the children of the ruling elite are getting at Ivy Leagues, it permeates the entire culture of the privileged class.
We were assured that it was not illegal as long as these
bonuses and donations to not match in space and time.
Yes that is true, bribery is illegal and this kind of conspiracy is bad. But if you spread it out and do not put anything in writing, it will be hell for the IRS to prove this. And if you are the type of person who attended this, you have a personal lawyer that you got when you turned 16. It will be very difficult to ever press this to a conviction. And remember, the various departments of the executive branch are in on this, they are the ones laundering the money and further removing it from the original bill that released the funds from the treasury.
> But if you took the money from the 1% and distributed it to everyone, it would probably amount to a few thousand dollars each, at best.
That's patently absurd, given that the top 1% own 90%+ of the wealth.
That's patently absurd, given that the top 1% own 90%+ of the wealth.
> given that the top 1% own 90%+ of the wealth.
Citation, please? https://publications.credit-suisse.com/tasks/render/file/?fi... page 24 claims that globally the top 8.1% own 84.6% of the wealth, while the top 0.7% own 45.2%. So the top 1% owns something between those two numbers.
Within the US, the top 1% owns an even smaller fraction (of a bigger per-capita pie), because there are many fewer poor people.
That said, the top 1% do own quite a bit of wealth. Same report, page 15, figure 2, looks to me like total global wealth is about $260 trillion as of 2015. World population is 7.3 billion. That comes out to $35000 per person or so. So globally this number would in fact come out higher than a few thousand dollars; per our calculations above it's about 0.5 to 0.85 times $35k (but note that this is including the the "1%" quite a large number of US retirees, for example; the threshold for 1% global wealth is not that high).
If you look at the US, https://en.wikipedia.org/wiki/Wealth_in_the_United_States#We... has numbers for 2007 saying that the top 1% owned 34.6% of the total wealth but that grew to 37.1% after the Great Recession. Total wealth in the US according to the above Credit Suisse report is about $86 trillion; that gives about $100,000 per person if you redistribute the wealth of the top 1%.
Citation, please? https://publications.credit-suisse.com/tasks/render/file/?fi... page 24 claims that globally the top 8.1% own 84.6% of the wealth, while the top 0.7% own 45.2%. So the top 1% owns something between those two numbers.
Within the US, the top 1% owns an even smaller fraction (of a bigger per-capita pie), because there are many fewer poor people.
That said, the top 1% do own quite a bit of wealth. Same report, page 15, figure 2, looks to me like total global wealth is about $260 trillion as of 2015. World population is 7.3 billion. That comes out to $35000 per person or so. So globally this number would in fact come out higher than a few thousand dollars; per our calculations above it's about 0.5 to 0.85 times $35k (but note that this is including the the "1%" quite a large number of US retirees, for example; the threshold for 1% global wealth is not that high).
If you look at the US, https://en.wikipedia.org/wiki/Wealth_in_the_United_States#We... has numbers for 2007 saying that the top 1% owned 34.6% of the total wealth but that grew to 37.1% after the Great Recession. Total wealth in the US according to the above Credit Suisse report is about $86 trillion; that gives about $100,000 per person if you redistribute the wealth of the top 1%.
> It's not healthy for society and I don't see it ending
> up anywhere good.
[deleted]
> I really think we are headed for bloody revolution, because most of the populace are angry, and its a rational anger because their survival needs are barely being met, in many cases.
From someone who grew up poor and identifies strongly with outlaws, I concur.
But unlike OP I think it needs to happen.
From someone who grew up poor and identifies strongly with outlaws, I concur.
But unlike OP I think it needs to happen.
Surely a cool, calculated, orderly effort to solve the problems described by the GP would be better than bloody revolution, which is a mere outpouring of anger that might not even solve the problems and would probably create entirely new ones. Do you think that no other option is possible at this point?
Edit: Talk of revolution makes me think of the song "Won't Get Fooled Again" by the Who, particularly the closing lines, "Meet the new boss. Same as the old boss."
Edit: Talk of revolution makes me think of the song "Won't Get Fooled Again" by the Who, particularly the closing lines, "Meet the new boss. Same as the old boss."
Revolution may or may not improve things for the underclass, but it certainly ruins things for the upper class -- at least they are forced into playing political games all over again and cannot rest on previous political success (though, yes, if they are trained or predisposed towards politics at least they have a chance). And the credible threat of revolution forces that cool, calculated, and orderly effort to go somewhere, instead of merely watching the arc of history bend as slowly as the earth's surface.
Britain, for instance, was not irredeemably terrible during the American Revolution, as evidenced by them being basically as reasonable a place as America today and not having had a revolution of their own since then. And they even managed to do some things better (e.g., they banned slavery before America did). But the American Revolution was still worthwhile, and that gave credibility to the American approach instead of the imperial one.
Britain, for instance, was not irredeemably terrible during the American Revolution, as evidenced by them being basically as reasonable a place as America today and not having had a revolution of their own since then. And they even managed to do some things better (e.g., they banned slavery before America did). But the American Revolution was still worthwhile, and that gave credibility to the American approach instead of the imperial one.
>Surely a cool, calculated, orderly effort to solve the problems described by the GP would be better than bloody revolution
Well yes, but talking about cool, calculated, orderly solutions has a tendency to get you labeled a "dirty socialist" by the Right and a "dirty reformist" by the Left, with the former being overwhelmingly stronger.
Well yes, but talking about cool, calculated, orderly solutions has a tendency to get you labeled a "dirty socialist" by the Right and a "dirty reformist" by the Left, with the former being overwhelmingly stronger.
Wait, are we talking about humans or our nascent AIs? Humans need hope and social / political pressure-release-valves or else ... bloody revolution.
> People aren't asking for "income equality" they are asking for some level of humanity and democracy to be restored to our version of Capitalism, to strengthen that capitalism.
That phrase could mean anything in practice that anyone wants it to mean. If we're going to discuss these things, we should be specific. What specific policy is desired, and how is it going to help? "Humanity" and "democracy" are not economic policies, nor are they specific enough goals to design policies around.
I am unsure whether economic equality is a goal that we should strive toward. I wonder if a better measure for our economy would be how well off people are at each place in the distribution. Almost all middle class people in America today still have really nice TVs, mobile phones, Internet, etc., which suggests that their standard of living is quite good in absolute terms. We should be looking at absolute terms, not relative terms.
Taxing the wealthy has undesirable effects. It's not as if wealthy people take their money and put it under their mattress. No, they invest it. That investment money flows to other corporations who then spend it on goods and services, or spend it on their employees. All of the wealth that the rich accumulate makes its way back into the economy, except it's at the direction of the rich according to their investment decisions. The alternative, if you tax the rich, is that the same money flows to the government and the government spends it on programs.
That's certainly valuable, and I believe it makes sense for the government to have tax revenue to spend on its programs, but I don't necessarily think that more revenue for more programs will lead to better results. I'd rather that we spend substantially less on wars, for example, and redirect that money into infrastructure for our own country.
Take the F-35 development program - the government has basically thrown over a trillion dollars down the drain (I'm being hyperbolic, but it's really pretty bad). A trillion dollars!! The government would have plenty of tax revenue to spend on smart infrastructure investments if it stopped throwing money away on programs like that.
I'd hazard a guess that wealthy investors through their investments are more effective at creating wealth and raising the standard of living in the country than the government is (on a marginal basis from where we are today). Investors are far better at examining where their money goes, what effect it has, and doubling down on investments that demonstrate promising results, and pulling the plug on pointless ones. The government by comparison keeps burning more and more money on programs that are clearly ineffective - examine the Healthcare.gov or F-35 boondoggles. Private investors do better. Let them keep their money to invest it smartly.
That phrase could mean anything in practice that anyone wants it to mean. If we're going to discuss these things, we should be specific. What specific policy is desired, and how is it going to help? "Humanity" and "democracy" are not economic policies, nor are they specific enough goals to design policies around.
I am unsure whether economic equality is a goal that we should strive toward. I wonder if a better measure for our economy would be how well off people are at each place in the distribution. Almost all middle class people in America today still have really nice TVs, mobile phones, Internet, etc., which suggests that their standard of living is quite good in absolute terms. We should be looking at absolute terms, not relative terms.
Taxing the wealthy has undesirable effects. It's not as if wealthy people take their money and put it under their mattress. No, they invest it. That investment money flows to other corporations who then spend it on goods and services, or spend it on their employees. All of the wealth that the rich accumulate makes its way back into the economy, except it's at the direction of the rich according to their investment decisions. The alternative, if you tax the rich, is that the same money flows to the government and the government spends it on programs.
That's certainly valuable, and I believe it makes sense for the government to have tax revenue to spend on its programs, but I don't necessarily think that more revenue for more programs will lead to better results. I'd rather that we spend substantially less on wars, for example, and redirect that money into infrastructure for our own country.
Take the F-35 development program - the government has basically thrown over a trillion dollars down the drain (I'm being hyperbolic, but it's really pretty bad). A trillion dollars!! The government would have plenty of tax revenue to spend on smart infrastructure investments if it stopped throwing money away on programs like that.
I'd hazard a guess that wealthy investors through their investments are more effective at creating wealth and raising the standard of living in the country than the government is (on a marginal basis from where we are today). Investors are far better at examining where their money goes, what effect it has, and doubling down on investments that demonstrate promising results, and pulling the plug on pointless ones. The government by comparison keeps burning more and more money on programs that are clearly ineffective - examine the Healthcare.gov or F-35 boondoggles. Private investors do better. Let them keep their money to invest it smartly.
It's not as if wealthy people take their money and put it under their mattress. No, they invest it. That investment money flows to other corporations who then spend it on goods and services, or spend it on their employees.
No they don't. From what I've read (Piketty etc) they do not re-circulate it into the general economy. They use investment vehicles which are increasingly divorced from "real world" economics and more like moving chips around on a poker table. It's wealth in the service of wealth creation. All of that happens in an almost separate level of the economy. No poor or middle class person is even involved.
I'd "hazard a guess" that wealthy investors might be more effective at creating more wealth, but not at raising the standard of living of the countries they are in. In fact, the standard of living in the United States is declining.
Approximately 100% of the money that poor and middle class people spend goes to corporations. If you give them money, they spend it on goods and services. That's pretty efficient.
The alternative, if you tax the rich, is that the same money flows to the government and the government spends it on programs.
Is that the only alternative? At this point, probably. I don't trust the government either, it's a bloated plutocracy. But you could still make a completely economic/utility theory argument that the benefit to 100M+ people outweighs the overall good for the 1K+ people at the top of the current hierarchy.
No they don't. From what I've read (Piketty etc) they do not re-circulate it into the general economy. They use investment vehicles which are increasingly divorced from "real world" economics and more like moving chips around on a poker table. It's wealth in the service of wealth creation. All of that happens in an almost separate level of the economy. No poor or middle class person is even involved.
I'd "hazard a guess" that wealthy investors might be more effective at creating more wealth, but not at raising the standard of living of the countries they are in. In fact, the standard of living in the United States is declining.
Approximately 100% of the money that poor and middle class people spend goes to corporations. If you give them money, they spend it on goods and services. That's pretty efficient.
The alternative, if you tax the rich, is that the same money flows to the government and the government spends it on programs.
Is that the only alternative? At this point, probably. I don't trust the government either, it's a bloated plutocracy. But you could still make a completely economic/utility theory argument that the benefit to 100M+ people outweighs the overall good for the 1K+ people at the top of the current hierarchy.
> They use investment vehicles which are increasingly divorced from "real world" economics and more like moving chips around on a poker table.
Which investment vehicles are those?
You cannot in general invest money into vehicles which earn a good return but which are divorced from the real world. Imagine if you invest in a company like Apple. Apple developed products like the iPod and iPhone, and the company's value comes from the fact that 500 million people gave their money to Apple in exchange for an iPhone. Apple's $233 billion dollar revenue, and resulting net income, leads to their valuation, which leads to the return on our hypothetical investment.
The investment profits because Apple developed a useful product that people chose to spend money on - the people who bought the products benefited, and the investor benefited from a return. Everyone is better off, and the standard of living has risen. Technology makes things cheaper over time, so that more people can afford such devices. A vast majority of people living in poverty in America own cell phones.
Can you describe how these investment vehicles work such that they're earning a return while being disconnected from the real world? Where does the money come from for the returns?
Which investment vehicles are those?
You cannot in general invest money into vehicles which earn a good return but which are divorced from the real world. Imagine if you invest in a company like Apple. Apple developed products like the iPod and iPhone, and the company's value comes from the fact that 500 million people gave their money to Apple in exchange for an iPhone. Apple's $233 billion dollar revenue, and resulting net income, leads to their valuation, which leads to the return on our hypothetical investment.
The investment profits because Apple developed a useful product that people chose to spend money on - the people who bought the products benefited, and the investor benefited from a return. Everyone is better off, and the standard of living has risen. Technology makes things cheaper over time, so that more people can afford such devices. A vast majority of people living in poverty in America own cell phones.
Can you describe how these investment vehicles work such that they're earning a return while being disconnected from the real world? Where does the money come from for the returns?
> Which investment vehicles are those?
Hedge funds and the like.
> leads to their valuation, which leads to the return on our hypothetical investment.
'Return' on an increase in valuation isn't a real return. It's exactly like poker.
The way markets are supposed to work is you invest in an IPO, then you get a dividend sometime in the future, and then maybe the company buys back your shares.
The way it generally works for most people is you buy shares on the open market, then someone else buys those shares from you. This has nothing to do with the 'reality' of the company because both of you are speculators, neither has given money to the company, and neither has received money from the company. You're both just playing with poker chips.
> Can you describe how these investment vehicles work such that they're earning a return while being disconnected from the real world? Where does the money come from for the returns?
You buy into the market (non-IPO). When the value goes up, you sell. You're selling to other investors.
So the answer is, much of the money for the returns comes from other investors (not unlike a Ponzi scheme, however since you're both speculating, it's more akin to a poker table).
On a large scale the way it works is that hedge funds and traders are the ones making money, at the expense of less sophisticated traders, like mutual funds, pension funds, and retail traders.
Of course, this doesn't include the fact the dividends and buybacks actually are real, and do represent a non-trivial portion of the market, but there certainly is a large enough amount of investment vehicles which are divorced from the 'real world'.
Hedge funds and the like.
> leads to their valuation, which leads to the return on our hypothetical investment.
'Return' on an increase in valuation isn't a real return. It's exactly like poker.
The way markets are supposed to work is you invest in an IPO, then you get a dividend sometime in the future, and then maybe the company buys back your shares.
The way it generally works for most people is you buy shares on the open market, then someone else buys those shares from you. This has nothing to do with the 'reality' of the company because both of you are speculators, neither has given money to the company, and neither has received money from the company. You're both just playing with poker chips.
> Can you describe how these investment vehicles work such that they're earning a return while being disconnected from the real world? Where does the money come from for the returns?
You buy into the market (non-IPO). When the value goes up, you sell. You're selling to other investors.
So the answer is, much of the money for the returns comes from other investors (not unlike a Ponzi scheme, however since you're both speculating, it's more akin to a poker table).
On a large scale the way it works is that hedge funds and traders are the ones making money, at the expense of less sophisticated traders, like mutual funds, pension funds, and retail traders.
Of course, this doesn't include the fact the dividends and buybacks actually are real, and do represent a non-trivial portion of the market, but there certainly is a large enough amount of investment vehicles which are divorced from the 'real world'.
> 'Return' on an increase in valuation isn't a real return. It's exactly like poker.
Completely false. Let's talk about how investment money is used, and how that impacts valuation.
Say that a friend has started a new farm as a business and he's seeking investment. He'd like a cash investment in order to buy a tractor, harvester, and combine for the farm, which he can't afford himself. So I make the investment and the farm buys the equipment, which enables the farm to grow substantially more crops (vs tilling, planting, and harvesting by hand). By growing more crops with that equipment, the farm has vastly more revenue and earnings.
This farm has actually grown more crops than it could have otherwise - the investment led to the creation of wealth. The crops are net additional wealth, and the farm's ability to grow and sell them for revenue leads directly to the increase in the farm's valuation.
The farm grows and hires more employees; it's also an engine of job creation. All made possible by the investment, without which the farm could not have gotten started.
> Hedge funds and the like.
And what do hedge funds do with the investment money they receive from the wealthy? Do they put that cash under their mattress and somehow generate returns by doing that? No, they invest it in companies which use the cash to create wealth.
Completely false. Let's talk about how investment money is used, and how that impacts valuation.
Say that a friend has started a new farm as a business and he's seeking investment. He'd like a cash investment in order to buy a tractor, harvester, and combine for the farm, which he can't afford himself. So I make the investment and the farm buys the equipment, which enables the farm to grow substantially more crops (vs tilling, planting, and harvesting by hand). By growing more crops with that equipment, the farm has vastly more revenue and earnings.
This farm has actually grown more crops than it could have otherwise - the investment led to the creation of wealth. The crops are net additional wealth, and the farm's ability to grow and sell them for revenue leads directly to the increase in the farm's valuation.
The farm grows and hires more employees; it's also an engine of job creation. All made possible by the investment, without which the farm could not have gotten started.
> Hedge funds and the like.
And what do hedge funds do with the investment money they receive from the wealthy? Do they put that cash under their mattress and somehow generate returns by doing that? No, they invest it in companies which use the cash to create wealth.
You just described what happens when you receive an initial investment, like an IPO. You also didn't describe how the hedge fund gets a return. What you described could also be accomplished through debt.
I was talking about something different.
I was talking about something different.
Many hedge funds do invest in IPOs. They also invest in all sorts of debt: corporate, municipal, sovereign, emerging market.
It's true that hedge funds and mutual funds also invest in the stock market, which is a secondary market where the money doesn't go to the original issuers. However the existence of a healthy and liquid secondary market is what gives primary investors the confidence to buy stakes (or lend) to start-ups in the first instance. Who would want these assets if they literally had no choice but to hold onto them forever (or until maturity or acquisition or bankruptcy).
It's true that hedge funds and mutual funds also invest in the stock market, which is a secondary market where the money doesn't go to the original issuers. However the existence of a healthy and liquid secondary market is what gives primary investors the confidence to buy stakes (or lend) to start-ups in the first instance. Who would want these assets if they literally had no choice but to hold onto them forever (or until maturity or acquisition or bankruptcy).
Not saying it's a bad thing, only that it's a thing, and the availability of these types of funds to the rich and lack of availability to the average investor is one of the reasons for inequality, as the original poster was saying.
Becoming 'increasingly divorced' from economic reality doesn't mean that it's completely separate, only that even in times of low growth, the ultra rich have high yield funds available to them which exacerbates economic inequality. It's just a trend. Or as Piketty states, r > g. Hedge funds used to be entirely defensive against market downturns, today they're increasingly run by speculative traders, many of whom offer outsized returns.
Becoming 'increasingly divorced' from economic reality doesn't mean that it's completely separate, only that even in times of low growth, the ultra rich have high yield funds available to them which exacerbates economic inequality. It's just a trend. Or as Piketty states, r > g. Hedge funds used to be entirely defensive against market downturns, today they're increasingly run by speculative traders, many of whom offer outsized returns.
Say that a friend has started a new farm as a business and he's seeking investment.
That's really not a good example of what we're talking about here. A single family farm is not a profitable business at all. There was an HN story about it just a couple of days ago. https://news.ycombinator.com/item?id=10823747
He'd like a cash investment in order to buy a tractor, harvester, and combine for the farm, which he can't afford himself. So I make the investment and the farm buys the equipment, which enables the farm to grow substantially more crops.
No you don't. He might get a bank loan, in which case he is actually paying a fee in order to borrow that money. Now, if you were talking about the profitability of people paying you to borrow money, now you're in the right ballpark. I hear it's quite a profitable business.
Look I'm not talking about hypothetical small business hand wavy stuff, I'm talking about the trillions of dollars floating around at the top end. Most of which is currently flowing into real estate, powering various bubbles around the world.
I'll give you an example: from what I understand, Larry Ellison doesn't actually sell his stock in order to buy islands. He uses it as collateral to secure a loan. Those loans (something like 10 billion dollars worth at this point) can be spent/invested/leveraged, but it's not directly taxable because it's a loan. That's the kind of thing that you can do when you have a few billion. You don't even have to spend your own money. The net increase in the value of his real estate holdings is more than enough to pay the interest. Now, try playing that game if you have zero billions.
http://www.bloomberg.com/news/articles/2014-09-25/larry-elli...
No, they invest it in companies which use the cash to create wealth.
Apple isn't a good example either. Companies do get cash from IPO's. After that, having a valuable stock is certainly nice. Apple doesn't fund operations by selling their stock. If the stock doubles, Apple doesn't get that money. Indirectly, of course Apple does issue stock as bonuses to employees, and buys back stock to return cash to investors. If Apple was privately held they'd make just as much money. They don't need the stock at all, it's just a side benefit that they can take advantage of when they make compensation packages.
That's really not a good example of what we're talking about here. A single family farm is not a profitable business at all. There was an HN story about it just a couple of days ago. https://news.ycombinator.com/item?id=10823747
He'd like a cash investment in order to buy a tractor, harvester, and combine for the farm, which he can't afford himself. So I make the investment and the farm buys the equipment, which enables the farm to grow substantially more crops.
No you don't. He might get a bank loan, in which case he is actually paying a fee in order to borrow that money. Now, if you were talking about the profitability of people paying you to borrow money, now you're in the right ballpark. I hear it's quite a profitable business.
Look I'm not talking about hypothetical small business hand wavy stuff, I'm talking about the trillions of dollars floating around at the top end. Most of which is currently flowing into real estate, powering various bubbles around the world.
I'll give you an example: from what I understand, Larry Ellison doesn't actually sell his stock in order to buy islands. He uses it as collateral to secure a loan. Those loans (something like 10 billion dollars worth at this point) can be spent/invested/leveraged, but it's not directly taxable because it's a loan. That's the kind of thing that you can do when you have a few billion. You don't even have to spend your own money. The net increase in the value of his real estate holdings is more than enough to pay the interest. Now, try playing that game if you have zero billions.
http://www.bloomberg.com/news/articles/2014-09-25/larry-elli...
No, they invest it in companies which use the cash to create wealth.
Apple isn't a good example either. Companies do get cash from IPO's. After that, having a valuable stock is certainly nice. Apple doesn't fund operations by selling their stock. If the stock doubles, Apple doesn't get that money. Indirectly, of course Apple does issue stock as bonuses to employees, and buys back stock to return cash to investors. If Apple was privately held they'd make just as much money. They don't need the stock at all, it's just a side benefit that they can take advantage of when they make compensation packages.
> I'll give you an example: from what I understand, Larry Ellison doesn't actually sell his stock in order to buy islands. He uses it as collateral to secure a loan. Those loans (something like 10 billion dollars worth at this point) can be spent/invested/leveraged, but it's not directly taxable because it's a loan.
Right, but if he converts money into land, the land does get taxed. Additionally, he pays a sales tax when he purchases the land.
> That's the kind of thing that you can do when you have a few billion. You don't even have to spend your own money. The net increase in the value of his real estate holdings is more than enough to pay the interest.
False. He is spending his own money, because he still pays back the loan. He borrows money, buys some land, then pays the loan back.
Right, but if he converts money into land, the land does get taxed. Additionally, he pays a sales tax when he purchases the land.
> That's the kind of thing that you can do when you have a few billion. You don't even have to spend your own money. The net increase in the value of his real estate holdings is more than enough to pay the interest.
False. He is spending his own money, because he still pays back the loan. He borrows money, buys some land, then pays the loan back.
[deleted]
[deleted]
The analogy with poker is a poor one. Poker is a zero-sum game. Capital markets are not zero sum. Capital allocation can create (or destroy) wealth, and the transactions to which you point make that process more efficient. If there were no secondary market for shares, there would less money invested in IPOs and other primary investments.
> Which investment vehicles are those?
I wonder if this explains why the money supply is increasing without any accompanying inflation. The money is just getting turned into economic dead weight.
I think it's fairly well established that money supply increase has led to asset price inflation (but not consumer price inflation like you said), but that has also meant bond yields have stayed low, letting companies and countries borrow cheaply to fund their various projects. So I don't think 'dead weight' is the correct description.
Of course, it may have had other, less pleasant, effects.
Of course, it may have had other, less pleasant, effects.
Erm in that case why do the Rothschilds run RIT Capital Partners - which is explicitly set up to allow non family members to invest (as I do )
Picketty explicitly claims the opposite of this. According to Picketty, the rich invest in the economy and achieve a growth rate r. As a result the level of capital stock grows more rapidly than incomes (which grow only at the rate g, for r > g).
In contrast, money spent on consumption does not grow at the rate r. Picketty even speculates (providing no real evidence however) that only the rich can achieve growth rate r - investments by others will only achieve r' < r.
Did you even read Picketty? (The math parts, not the mood affiliation.)
In contrast, money spent on consumption does not grow at the rate r. Picketty even speculates (providing no real evidence however) that only the rich can achieve growth rate r - investments by others will only achieve r' < r.
Did you even read Picketty? (The math parts, not the mood affiliation.)
I shouldn't have name dropped that particular book since I haven't read it, only summaries/reviews of it.
But the question still remains of how "rich people invest in the economy". Do they really? Or is it entirely indirect? Not one of them is giving small farmers money to buy tractors. Maybe they're building hotels which eventually employ housekeepers, sure. That's what I think of as the general economy. There's probably a more specific technical term for this. But I think using a billion dollars to give small farmers loans would be the worst possible use for it. You'd probably speculate in oil futures or whatever. While it's technically all the economy, sure, I'd argue that the super-wealthy generally don't add much to the economy, they extract value from the economy using their existing wealth as leverage.
What I'm getting at is that money spent on stuff/food/buildings/etc is different than money used as a tool/leverage/instrument just to make more money. I get the sense that it's an entirely different game (again, mostly an intuition from reading a lot of commentary about economic issues).
Sure, we all earn money and pay rent in dollars. Those dollars and that activity are only tangentially related to what a hedge fund uses dollars for.
But the question still remains of how "rich people invest in the economy". Do they really? Or is it entirely indirect? Not one of them is giving small farmers money to buy tractors. Maybe they're building hotels which eventually employ housekeepers, sure. That's what I think of as the general economy. There's probably a more specific technical term for this. But I think using a billion dollars to give small farmers loans would be the worst possible use for it. You'd probably speculate in oil futures or whatever. While it's technically all the economy, sure, I'd argue that the super-wealthy generally don't add much to the economy, they extract value from the economy using their existing wealth as leverage.
What I'm getting at is that money spent on stuff/food/buildings/etc is different than money used as a tool/leverage/instrument just to make more money. I get the sense that it's an entirely different game (again, mostly an intuition from reading a lot of commentary about economic issues).
Sure, we all earn money and pay rent in dollars. Those dollars and that activity are only tangentially related to what a hedge fund uses dollars for.
According to Piketty, rich people invest secretly into large mysterious companies. This pretty much precludes public markets, so they probably own lots of smaller businesses (e.g. hotels).
Why do you believe lending to farmers is a bad use for resources?
Investing in oil futures is transmitting information to the markets. It encourages current users to avoid unnecessary use of oil and produces to produce more. That's a valuable service.
What exactly do you think a hedge fund does?
Why do you believe lending to farmers is a bad use for resources?
Investing in oil futures is transmitting information to the markets. It encourages current users to avoid unnecessary use of oil and produces to produce more. That's a valuable service.
What exactly do you think a hedge fund does?
"Almost all middle class people in America today still have really nice TVs, mobile phones, Internet, etc., which suggests that their standard of living is quite good in absolute terms. We should be looking at absolute terms, not relative terms."
Absolute terms are meaningless in this context. It's like comparing a poor person living in Appalachia to an indigenous person living on a remote island. Does the Appalachian resident have a better standard of living ? Absolutely. Does it matter in the context of the US ? Absolutely not.
Also, you conveniently leave out some of the largest symptoms of wealth inequality. It's not consumer goods that define our standard of living, it's things like:
- Being able to pay for college without going into significant amounts of debt
- Not living paycheck to paycheck and being able to save money each month
- Eating well and not being forced to live on substandard food products that are extremely unhealthy
- Being able to afford quality health insurance, and being able to afford the deductibles and co-pays associated with it
- Being able to save up for a down-payment on a home, and then being able to afford to both pay the mortgage and keep the home in decent shape (new roof, water heater, furnace, etc.)
- Being able to afford transportation that doesn't constantly break down and result in more unplanned expenses that one cannot afford
- Being able to retire (if one wants to)
- And, most importantly, not having to work 2 or 3 jobs and have quality free time that can be used to explore hobbies and/or better oneself
Absolute terms are meaningless in this context. It's like comparing a poor person living in Appalachia to an indigenous person living on a remote island. Does the Appalachian resident have a better standard of living ? Absolutely. Does it matter in the context of the US ? Absolutely not.
Also, you conveniently leave out some of the largest symptoms of wealth inequality. It's not consumer goods that define our standard of living, it's things like:
- Being able to pay for college without going into significant amounts of debt
- Not living paycheck to paycheck and being able to save money each month
- Eating well and not being forced to live on substandard food products that are extremely unhealthy
- Being able to afford quality health insurance, and being able to afford the deductibles and co-pays associated with it
- Being able to save up for a down-payment on a home, and then being able to afford to both pay the mortgage and keep the home in decent shape (new roof, water heater, furnace, etc.)
- Being able to afford transportation that doesn't constantly break down and result in more unplanned expenses that one cannot afford
- Being able to retire (if one wants to)
- And, most importantly, not having to work 2 or 3 jobs and have quality free time that can be used to explore hobbies and/or better oneself
According to two different 'Outlook of M&A' panels I attended in the past two months, corporations have more uninvested cash on their balance sheets than is typical. I mention that because even the money invested by the wealthy into corporations does not necessarily get spent by corporations. This is part of the reason why the argument for 'tax cuts for the wealthy' doesn't hold up under current conditions.
Thinking about it in terms of supply and demand of goods, increasing wealth of the middle class increases overall demand, and increasing wealth of the wealthy increases supply, but only to the extent that demand will support.
Source from 2013 but still applicable: https://www.stlouisfed.org/Publications/Regional-Economist/J...
Thinking about it in terms of supply and demand of goods, increasing wealth of the middle class increases overall demand, and increasing wealth of the wealthy increases supply, but only to the extent that demand will support.
Source from 2013 but still applicable: https://www.stlouisfed.org/Publications/Regional-Economist/J...
On the other hand that uninvested cash should help more companies weather the storm in times of crisis, which should save jobs.
I think it's useful to draw a bright line around the 'value creation' that PG is referring to, also. It's not just creating chairs, it's aggregating great wealth by 'disrupting' traditional industries. Those traditional industries have workers and shareholders who lose out.
What makes successful startups so profitable is they displace a large and less-efficient system with a small, efficient one. Efficient in terms of human capital, oftentimes: look how few people AirBNB employs directly, yet have a market cap larger than Marriott. The returns on capital its investors have seen is a result of the substitution of capital for labor (in part).
Of course, to the extent that the creation of a marketplace unlocks value, it can create value de novo, rather than shifting wealth from one sector/company to another. But with 'smart' startup founders seeking monopoly rents (cf. Peter Thiel, writing/speaking virtually anywhere), those returns are also concentrated, and will not trickle down to the larger population.
Furthermore, the wealth inequality cryoshon is writing about is not driven by startups, it's driven by a general breakdown in the implicit social contract between capital and labor. As OP notes, Piketty goes into great detail about the historical causes and likely effects, but the tl;dr (and his book is _very_ tl) break down to: when returns on capital are higher than overall economic growth, wealth will tend to aggregate.
As fans of numbers and algorithms, I hope HN readers can appreciate the simple beauty of that formulation. Piketty's suggested policy response is simple: high taxes on aggregated wealth. Which, after reading (~80%, honestly) of his book, I have to agree with.
What makes successful startups so profitable is they displace a large and less-efficient system with a small, efficient one. Efficient in terms of human capital, oftentimes: look how few people AirBNB employs directly, yet have a market cap larger than Marriott. The returns on capital its investors have seen is a result of the substitution of capital for labor (in part).
Of course, to the extent that the creation of a marketplace unlocks value, it can create value de novo, rather than shifting wealth from one sector/company to another. But with 'smart' startup founders seeking monopoly rents (cf. Peter Thiel, writing/speaking virtually anywhere), those returns are also concentrated, and will not trickle down to the larger population.
Furthermore, the wealth inequality cryoshon is writing about is not driven by startups, it's driven by a general breakdown in the implicit social contract between capital and labor. As OP notes, Piketty goes into great detail about the historical causes and likely effects, but the tl;dr (and his book is _very_ tl) break down to: when returns on capital are higher than overall economic growth, wealth will tend to aggregate.
As fans of numbers and algorithms, I hope HN readers can appreciate the simple beauty of that formulation. Piketty's suggested policy response is simple: high taxes on aggregated wealth. Which, after reading (~80%, honestly) of his book, I have to agree with.
> Piketty's suggested policy response is simple: high taxes on aggregated wealth.
You need to go one step further and outline where and how the federal government should put this new tax revenue to work.
How much should we raise taxes? Which brackets? What form of wealth do we tax? Why taxation rather than issuing bonds?
What percent of gov revenue should we allocate to the DoD? How much to Social Security and Medicare? How much to public schools? Do we continue to subsidize higher education? Will this leave us weak to the threat of foreign attack? Will we have enough left to pay for the increasing number of elderly and obese?
A bad government with no plan, no cohesion, and no foresight will destroy value as the increased tax pool is simply drained out by cronyism, bureaucracy, lobbying, and dead-end projects. The money might be better left to a benevolent dictator, or to the private sector in the hopes of it "trickling down".
It's easy to say "raise taxes". It's hard to say where the new revenue should be invested, by whom, and how.
You need to go one step further and outline where and how the federal government should put this new tax revenue to work.
How much should we raise taxes? Which brackets? What form of wealth do we tax? Why taxation rather than issuing bonds?
What percent of gov revenue should we allocate to the DoD? How much to Social Security and Medicare? How much to public schools? Do we continue to subsidize higher education? Will this leave us weak to the threat of foreign attack? Will we have enough left to pay for the increasing number of elderly and obese?
A bad government with no plan, no cohesion, and no foresight will destroy value as the increased tax pool is simply drained out by cronyism, bureaucracy, lobbying, and dead-end projects. The money might be better left to a benevolent dictator, or to the private sector in the hopes of it "trickling down".
It's easy to say "raise taxes". It's hard to say where the new revenue should be invested, by whom, and how.
It's easy to say "raise taxes". It's hard to say where the new revenue should be invested, by whom, and how.
It's also easy, when someone proposes solving one problem, to say "well, you're not allowed to solve that one until you've solved every other problem in the world first". It's hard to say "OK, you seem to be prioritizing this problem, let's both make our arguments and because we live in a democracy whoever sways the most people to their side will win".
It's also easy, when someone proposes solving one problem, to say "well, you're not allowed to solve that one until you've solved every other problem in the world first". It's hard to say "OK, you seem to be prioritizing this problem, let's both make our arguments and because we live in a democracy whoever sways the most people to their side will win".
I'm not saying OP should not be allowed to think about or solve this problem - rather, I am pushing him to think harder and deeper about his solution and its possible consequences.
It's easy to provide a possible step 1 of the solution to a complex problem. Brilliance and wisdom lies in explaining why your proposed step 1 is the best way to get to steps 2,3, and 4.
It's easy to provide a possible step 1 of the solution to a complex problem. Brilliance and wisdom lies in explaining why your proposed step 1 is the best way to get to steps 2,3, and 4.
Don't push _me_. Read Piketty; the explicit goal (and solutions) are aimed at leveling wealth inequality.
Yes, good governance is better than bad governance. But problems of inequality -- and reduced social mobility, and the role of human labor vs capital -- are real, and require real solutions.
That said, Piketty's proposed solutions aren't currently practical. Did you see the recent estimate that 8% of global wealth is parked in tax havens?
http://www.nybooks.com/articles/2016/01/14/parking-the-big-m...
Yes, the problem is large, and does involve good governance. I was only sharing one proposed solution. The sad fact is, the best solution looks intractable. I'm open to suggestions.
Yes, good governance is better than bad governance. But problems of inequality -- and reduced social mobility, and the role of human labor vs capital -- are real, and require real solutions.
That said, Piketty's proposed solutions aren't currently practical. Did you see the recent estimate that 8% of global wealth is parked in tax havens?
http://www.nybooks.com/articles/2016/01/14/parking-the-big-m...
Yes, the problem is large, and does involve good governance. I was only sharing one proposed solution. The sad fact is, the best solution looks intractable. I'm open to suggestions.
The fallacy of relative privation: http://rationalwiki.org/wiki/Not_as_bad_as
> You need to go one step further and outline where and how
> the federal government should put this new tax revenue to
> work.
Since it is inequality were talking about, the simplest thing to do would be pure redistribution. Put the money in the hands of everyone equally as a dividend.
yes, we should do all the thinking, impact analysis and projections for the government because they are too busy not wanting to change the status quo. ridiculous.
No, not all the thinking, impact analysis, and projections. I asked for an outline, a sketch of a thesis for his plan beyond "raise taxes".
Please do not be hyperbolic and sarcastic.
Please do not be hyperbolic and sarcastic.
>Furthermore, the wealth inequality cryoshon is writing about is not driven by startups, it's driven by a general breakdown in the implicit social contract between capital and labor. As OP notes, Piketty goes into great detail about the historical causes and likely effects, but the tl;dr (and his book is _very_ tl) break down to: when returns on capital are higher than overall economic growth, wealth will tend to aggregate.
Yes, this is exactly it. I also agree re: Piketty being quite verbose... many of the same old points rehashed again and again.
Yes, this is exactly it. I also agree re: Piketty being quite verbose... many of the same old points rehashed again and again.
> Efficient in terms of human capital, oftentimes: look how few people AirBNB employs directly, yet have a market cap larger than Marriott.
Of course, the "directly" there is quite a nasty word, as AirBNB arguably makes quite a lot of money off shadow-work[0].
[0] -- https://en.wikipedia.org/wiki/Shadow_work
Of course, the "directly" there is quite a nasty word, as AirBNB arguably makes quite a lot of money off shadow-work[0].
[0] -- https://en.wikipedia.org/wiki/Shadow_work
Peter Thiel encourages founders to seek (legal) monopoly rents, but he acknowledges that they don't last forever, nor can extract 100% of the value created. I don't know why you think the public doesn't capture a good chunk, or even most, of that value.
Disruption is merely skirting the law and pocketing what you would have spent on compliance as profit. AirBnB cleverly disguises its actual employees - the people cleaning its hotel rooms - as independent contractors. They are employees in every sense apart from having rights. And the genius of it is, they do it to themselves!
This is not "creating value", it is destroying it.
This is not "creating value", it is destroying it.
It is creating value. Every new cleaning job means a cleaner gets another job to choose between. So his/her salary will be better, and ditto for working conditions.
THANKYOU for this, Paul Graham is a genius in many things, but you really hit the nail on the head with this article. -- AS a self-trained developer trying to get my first job and never earning over 40k (yet) between myself AND my wife's income -- it's hard to move up, when you feel so much pressure to stay where you are if not move down. I learned coding to start my own startup, it's the only way I'd ever be able to afford a prototype..
But I think Bernie said it best: "NOBODY working 40 hours per week should be living in poverty" -- there is no reason for this, in fact it makes that person a slave to whoever is paying them sub-par wages, they have to work whether they want to or not, it's not a choice, it's enslavement, they stop and they lose their apartment, and food. If the lowest 40 hour/weekers earned enough to put money away, and not worry about living paycheck to paycheck, then it wouldn't be such a problem. Also the fact is -- the poor spend the most money per dollar - meaning the more money the have to spend, the more money goes directly back into the local economies.
This along with increased tech advances that wipe away the need for some employees and 40% of the workforce(estimated) by 2040, a guaranteed basic income isn't just a good idea - it is crucial to our economy, and if it doesn't happen there WILL come a day when American's demand it, and pick up a gun to fight for it, I'm not sure when or what the tipping point will be, but it's coming someday.
But I think Bernie said it best: "NOBODY working 40 hours per week should be living in poverty" -- there is no reason for this, in fact it makes that person a slave to whoever is paying them sub-par wages, they have to work whether they want to or not, it's not a choice, it's enslavement, they stop and they lose their apartment, and food. If the lowest 40 hour/weekers earned enough to put money away, and not worry about living paycheck to paycheck, then it wouldn't be such a problem. Also the fact is -- the poor spend the most money per dollar - meaning the more money the have to spend, the more money goes directly back into the local economies.
This along with increased tech advances that wipe away the need for some employees and 40% of the workforce(estimated) by 2040, a guaranteed basic income isn't just a good idea - it is crucial to our economy, and if it doesn't happen there WILL come a day when American's demand it, and pick up a gun to fight for it, I'm not sure when or what the tipping point will be, but it's coming someday.
I agree with a lot of what you are saying, but you haven't made over 40k between both you and your wifes income? That seems extremely unlikely with any coding skills. I don't know any juniors that are making less than 50k from php to javascript.
It's true. My first role was to work an unpaid intern for a year. Then my first salary was $20k, followed by $35k only after working there for a couple years. It was going to be $30k but I was able to negotiate.
I think pg is correct, however.
I think pg is correct, however.
An HFT isn't entirely useless.
You might want to sell 66 shares of Apple stock and somebody else wants to buy 145 and for you both to get a timely fill, there has to be some kind of middleman.
If you think HFTs are bad, just take a look at floor traders -- the kind of people who will front run you if they see you coming and they know what you want, or will take a bathroom break if they don't want to trade with you.
Reg NMS, which set the stage for HFT passed because of a scandal involving the members of the New York Stock Exchange which is as good of a group of rent seekers as you'll find anywhere. Plenty of hanky-panky goes on with HFT, but it is a less corrupt system than what it replaces.
You might want to sell 66 shares of Apple stock and somebody else wants to buy 145 and for you both to get a timely fill, there has to be some kind of middleman.
If you think HFTs are bad, just take a look at floor traders -- the kind of people who will front run you if they see you coming and they know what you want, or will take a bathroom break if they don't want to trade with you.
Reg NMS, which set the stage for HFT passed because of a scandal involving the members of the New York Stock Exchange which is as good of a group of rent seekers as you'll find anywhere. Plenty of hanky-panky goes on with HFT, but it is a less corrupt system than what it replaces.
This. For more details, read "Flash Boys: Not So Fast" by Peter Kovac (http://www.amazon.fr/Flash-Boys-Insiders-Perspective-High-Fr...).
Alternatively, Chris Stucchio's blog posts (starting with https://www.chrisstucchio.com/blog/2012/hft_apology.html and https://www.chrisstucchio.com/blog/2012/hft_apology2.html) work.
We have been told so much that HFT were the bad guys by the media that we ended up believing it, but it is more of a scapegoat for the rest of the financial world.
Alternatively, Chris Stucchio's blog posts (starting with https://www.chrisstucchio.com/blog/2012/hft_apology.html and https://www.chrisstucchio.com/blog/2012/hft_apology2.html) work.
We have been told so much that HFT were the bad guys by the media that we ended up believing it, but it is more of a scapegoat for the rest of the financial world.
The people I know who really hate HFT are hedgies because they'd like to make big trades for free.
A great read on the subject by Matt Levine: "high frequency trading may be too efficient"
http://www.bloombergview.com/articles/2014-04-02/high-freque...
http://www.bloombergview.com/articles/2014-04-02/high-freque...
I hope I didn't go too overboard by dissecting PG's essay like this, but I felt it was necessary to correct many of the items that I read.
It may seem spurious now, but economic inequality is relevant for the tech industry, too. The massively increased productivity that information technology provides is very infrequently distributed proportionally to the people who actually forged it-- exactly the same condition as most workers in the US, currently. The principal difference in terms of economics is that the absolute wages of software engineers are currently higher than the median wages, meaning that they don't feel the pressure of not having quite enough-- given enough time, this will change unless we make a decision to alter our course.
The accumulation of economic gains from massively increased productivity will trend toward stagnation at the uppermost levels-- the founders and owners. Our society is currently engineered for this to be the case, and we have much work to do if we want a more equitable society.
If we accept economic inequality, we accept that we are not citizens but instead are largely debt-laden effortful passengers in a world owned by our betters.
It may seem spurious now, but economic inequality is relevant for the tech industry, too. The massively increased productivity that information technology provides is very infrequently distributed proportionally to the people who actually forged it-- exactly the same condition as most workers in the US, currently. The principal difference in terms of economics is that the absolute wages of software engineers are currently higher than the median wages, meaning that they don't feel the pressure of not having quite enough-- given enough time, this will change unless we make a decision to alter our course.
The accumulation of economic gains from massively increased productivity will trend toward stagnation at the uppermost levels-- the founders and owners. Our society is currently engineered for this to be the case, and we have much work to do if we want a more equitable society.
If we accept economic inequality, we accept that we are not citizens but instead are largely debt-laden effortful passengers in a world owned by our betters.
I thought it was a good article (I agree with some of it, but not everything).
It would have been helpful if the many quotes were visually distinct, it would make for an easier read.
I also think both you and PG aren't in as much disagreement as your response indicates.
My interpretation of PG's article was that he primarily wanted to highlight the wealth-creation aspect, and contrast it to rent-seeking. I think you'd both agree on many concrete fixes (reduce rent-seeking in the financial system, a political system mainly driven by money, health-system reform, etc). Though this is my guess obviously.
It would have been helpful if the many quotes were visually distinct, it would make for an easier read.
I also think both you and PG aren't in as much disagreement as your response indicates.
My interpretation of PG's article was that he primarily wanted to highlight the wealth-creation aspect, and contrast it to rent-seeking. I think you'd both agree on many concrete fixes (reduce rent-seeking in the financial system, a political system mainly driven by money, health-system reform, etc). Though this is my guess obviously.
It was a nice riposte. Altough the concentration on income inequality overall is perplexing to me.
Income can be measured and is emotive ( I earn X but my cousin earns 10X ), yet I think concentrating on this metric is obscuring some bigger issues. You do touch on them in your counterpoint.
Karl Marx in Das Kapital explains the situation post Industrial Revolution and prior to the World Wars. The landlords conspired with the factory owners to keep rents high and wages low so that workers had little ability to move or leave.
This lack of freedom in a self determination sense is creeping back into Western economies. Mortgages and rents are so high that workers spend most of their wage paying that.
So never mind that middle class income equality is 17% lower than middle class income equality 1980. House prices and rents have climbed more than enough even if 'equality' had persisted. ( Also prices for the very rich have increased too. )
But instead of a landlord class and factory manager class conspiring the prices have risen via market forces and lax monetary policy and the relabeling of debt as 'credit'
Another factor is opportunity equality. Meritocricy has greatly reduced since 1980, and is acutely poor now. Entry into elite jobs like CEOs, the Media Class, (cough) VCs and Private Equity firms are chosen from just a few streams. Harvard, Wharton, Ivy League in the States and moneyed private school in Europe. From outside those circles it is a struggle to join.
Paul touched on WW2, but I would go further and say both WW1 and WW2 were the genesis of a burst of meritocracy unleashed by mass death in Europe at the same time as vast strides in technology.
Getting a good job was easy in 1960 because everyone had died in 1915 - 1945 and there were many new classes of job.
These days, people are working and living longer and it is harder to get to the top... your boss didn't die in battle, you'll have to wait.
Income can be measured and is emotive ( I earn X but my cousin earns 10X ), yet I think concentrating on this metric is obscuring some bigger issues. You do touch on them in your counterpoint.
Karl Marx in Das Kapital explains the situation post Industrial Revolution and prior to the World Wars. The landlords conspired with the factory owners to keep rents high and wages low so that workers had little ability to move or leave.
This lack of freedom in a self determination sense is creeping back into Western economies. Mortgages and rents are so high that workers spend most of their wage paying that.
So never mind that middle class income equality is 17% lower than middle class income equality 1980. House prices and rents have climbed more than enough even if 'equality' had persisted. ( Also prices for the very rich have increased too. )
But instead of a landlord class and factory manager class conspiring the prices have risen via market forces and lax monetary policy and the relabeling of debt as 'credit'
Another factor is opportunity equality. Meritocricy has greatly reduced since 1980, and is acutely poor now. Entry into elite jobs like CEOs, the Media Class, (cough) VCs and Private Equity firms are chosen from just a few streams. Harvard, Wharton, Ivy League in the States and moneyed private school in Europe. From outside those circles it is a struggle to join.
Paul touched on WW2, but I would go further and say both WW1 and WW2 were the genesis of a burst of meritocracy unleashed by mass death in Europe at the same time as vast strides in technology.
Getting a good job was easy in 1960 because everyone had died in 1915 - 1945 and there were many new classes of job.
These days, people are working and living longer and it is harder to get to the top... your boss didn't die in battle, you'll have to wait.
Property prices are probably one of the most manipulated I can think of. Certainly in the UK, it is far from a free market.
[deleted]
I don't think you went overboard. Thanks for writing and posting this link.
I enjoyed it, though I haven't read PG's essay yet.
I get the feeling the air is quite thin up in the ivory tower PG must be living in these days :)
I like how he tries to quote a "Nobel prize winning economist" as an appeal to authority, but then (without naming him) insults Picketty's work, which will probably win a Nobel. PG is a smart guy but he really should stick to his areas of expertise, him and Marc Andreessen both frequently make basic finance and econ theory mistakes. PG's claim that he is in a position to speak with authority on inequality is like an electrician claiming he is in a position to speak with as much authority as the architect concerning the overall progress of the building.
Any hacker working in San Francisco can take a look outside and see the rampant inequality our industry is surrounded by.
puredemo(2)
OK, there are a lot of claims here but the one I'm interested in is the idea that productivity has increased while wages have stagnated. I'll have to read more about which of those are adjusted for inflation and how all that measurement actually works, but for now I'd like to make a few points that might be relevant:
- There's not much consideration why productivity has increased. If I had to guess a significant part is because executives hired analysts and planners to increase productivity, not just because better technology had that side effect. The incentive to do this is presumably that more productivity means better margins for the company. I can understand the argument that the workers deserve a bigger share of the rewards than they have gotten, but there is also a share deserved by the executives and analysts who were involved. And legally you can't really say that anyone is entitled to a share, which I guess means that in our society the balance comes down to ethics and morals.
- I think this point is made elsewhere, but there are a lot of things you can do with a "middle-class" income these days that were simply not possible when the wage stagnation started. Could it be the case that even if wage numbers don't track productivity, there is some balancing elsewhere that means actual quality of life does increase with productivity?
I'd like to hear peoples' thoughts, if these ideas are not full of trivial fallacies (which may very well be the case as I am not very knowledgeable about economic stuff).
- There's not much consideration why productivity has increased. If I had to guess a significant part is because executives hired analysts and planners to increase productivity, not just because better technology had that side effect. The incentive to do this is presumably that more productivity means better margins for the company. I can understand the argument that the workers deserve a bigger share of the rewards than they have gotten, but there is also a share deserved by the executives and analysts who were involved. And legally you can't really say that anyone is entitled to a share, which I guess means that in our society the balance comes down to ethics and morals.
- I think this point is made elsewhere, but there are a lot of things you can do with a "middle-class" income these days that were simply not possible when the wage stagnation started. Could it be the case that even if wage numbers don't track productivity, there is some balancing elsewhere that means actual quality of life does increase with productivity?
I'd like to hear peoples' thoughts, if these ideas are not full of trivial fallacies (which may very well be the case as I am not very knowledgeable about economic stuff).
Let's be clear that Thomas Piketty's book has been thoroughly refuted, not in some minor way, but Thomas claimed that all he did was objectively looked at the data, and that the conclusion simply showed itself. Unfortunately he cherry picked data, and fabricated bits of history to make it fit his claim. The following paper does a great job of completely dismantling it.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012
Not to mention that most people haven't even read past the first few pages of the book, and yet they quote it.
http://www.telegraph.co.uk/finance/economics/10951407/Has-an...
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012
Not to mention that most people haven't even read past the first few pages of the book, and yet they quote it.
http://www.telegraph.co.uk/finance/economics/10951407/Has-an...
So, just to be clear here, the refutation to Piketty was published in the Journal of Private Enterprise by a policy professor from George Mason University and another author from the Institute for Energy Research?
Or in other words, it was published in the Libertarian Journal of Libertarianism by a libertarian academic and a libertarian think-tanker at a libertarian think-tank, funded by the Koch Brothers[1]?
This really doesn't pass the smell test.
[1] -- http://www.sourcewatch.org/index.php/Institute_for_Energy_Re...
Or in other words, it was published in the Libertarian Journal of Libertarianism by a libertarian academic and a libertarian think-tanker at a libertarian think-tank, funded by the Koch Brothers[1]?
This really doesn't pass the smell test.
[1] -- http://www.sourcewatch.org/index.php/Institute_for_Energy_Re...
Instead of smelling it, it may make more sense to actually read the arguments. ;)
"..the standard of living for the rich has risen and the standard of living for everyone else has dropped"
Really, standard of living has dropped? Just to pick one counter-example, something like 500 million iphones have been sold in the past 10 years, and over 1 billion android devices were sold last year. Compared to 10 years ago, we've given half of the planet 24/7 access to the sum of human knowledge. Seems like a pretty good step up to me.
I think what you mean is wages have fallen, but standard of living has risen dramatically and only shows signs of accelerating.
Really, standard of living has dropped? Just to pick one counter-example, something like 500 million iphones have been sold in the past 10 years, and over 1 billion android devices were sold last year. Compared to 10 years ago, we've given half of the planet 24/7 access to the sum of human knowledge. Seems like a pretty good step up to me.
I think what you mean is wages have fallen, but standard of living has risen dramatically and only shows signs of accelerating.
I'll give a short explanation as to why I flagged this:
This piece irrationally pisses me off, for purely petty social dynamics reasons.
1) There's a first-mover advantage to thinkpiece responses. Everyone obviously is going to read the first response, many people are probably writing responses of their own. This seems like a quick way to jump into a discussion and say "hey, look at me!" You better have something useful to say.
2) It's just a really poorly thought out response. It rehashes basically the same points everybody knows, adding zero new information or insight, without responding to the meat of what Paul's saying.
3) There was a time when I sincerely believed Hacker News was the one place to go to escape from petty thinkpiece nonsense. It continues to sadden me to see this community in decline. PG should start another website.
This piece irrationally pisses me off, for purely petty social dynamics reasons.
1) There's a first-mover advantage to thinkpiece responses. Everyone obviously is going to read the first response, many people are probably writing responses of their own. This seems like a quick way to jump into a discussion and say "hey, look at me!" You better have something useful to say.
2) It's just a really poorly thought out response. It rehashes basically the same points everybody knows, adding zero new information or insight, without responding to the meat of what Paul's saying.
3) There was a time when I sincerely believed Hacker News was the one place to go to escape from petty thinkpiece nonsense. It continues to sadden me to see this community in decline. PG should start another website.
I'll admit that I read PG's piece coincidentally when it was just posted and formed my article shortly after, but I'd have been writing something else ("thinkpiece") around that period of time anyway if I hadn't come across it. I've wanted to start writing about economic inequality for quite some time, and this was a convenient stepping off point.
I take issue with #2, though: if everyone knows those points, why did PG fail to address them adequately in his original piece? The data supporting my perspective are quite compelling and not yet disproven.
I'll agree my piece isn't insightful: I considered it a diligence to reply point by point (by the book, perhaps) specifically because influential people cannot go unchallenged when they make faulty arguments.
I take issue with #2, though: if everyone knows those points, why did PG fail to address them adequately in his original piece? The data supporting my perspective are quite compelling and not yet disproven.
I'll agree my piece isn't insightful: I considered it a diligence to reply point by point (by the book, perhaps) specifically because influential people cannot go unchallenged when they make faulty arguments.
[deleted]
[deleted]
[deleted]
This is spot on.
I think it is important to evaluate PG's essay within context. He, like most people in Silicon Valley, is stuck in a bubble and views the rest of the world through a very distorted lens. That's where much of his rhetoric about wealth creation comes from: he's surrounded by people (founders) who create value in the form of software. When a portion of those founders become rich, he looks at himself as a promoter of inequality.
What he doesn't realize is that the vast majority of wealthy people did not become wealthy by creating value, but by playing zero-sum games -- and then by influencing politicians and bending the system to their will so as to guarantee that they will hold on to as much of that wealth as possible.
I think the question PG needs to address is this: what is the justification for non-founder executives getting paid tens of millions of dollars at the expense of other employees? What is the justification for those top-level salaries to exist even when the company is doing badly and regular employees don't see a dime in raises or bonuses that year?
Bottom line is that the type of wealth PG enables founders to create, and the subsequent inequality, is not the type society has a problem with. Sure, some people may balk at the idea of an instant-messaging app being valued in the billions, but those controversies tend to be completely detached from the inequality debate.
Now, if PG ever starts preaching that founder CEOs should pay themselves millions of dollars while keeping salaries as low as possible... that would be a different story. As things stand though, I don't think he's part of the problem and measures to address inequality won't really affect him and his crew.
I think it is important to evaluate PG's essay within context. He, like most people in Silicon Valley, is stuck in a bubble and views the rest of the world through a very distorted lens. That's where much of his rhetoric about wealth creation comes from: he's surrounded by people (founders) who create value in the form of software. When a portion of those founders become rich, he looks at himself as a promoter of inequality.
What he doesn't realize is that the vast majority of wealthy people did not become wealthy by creating value, but by playing zero-sum games -- and then by influencing politicians and bending the system to their will so as to guarantee that they will hold on to as much of that wealth as possible.
I think the question PG needs to address is this: what is the justification for non-founder executives getting paid tens of millions of dollars at the expense of other employees? What is the justification for those top-level salaries to exist even when the company is doing badly and regular employees don't see a dime in raises or bonuses that year?
Bottom line is that the type of wealth PG enables founders to create, and the subsequent inequality, is not the type society has a problem with. Sure, some people may balk at the idea of an instant-messaging app being valued in the billions, but those controversies tend to be completely detached from the inequality debate.
Now, if PG ever starts preaching that founder CEOs should pay themselves millions of dollars while keeping salaries as low as possible... that would be a different story. As things stand though, I don't think he's part of the problem and measures to address inequality won't really affect him and his crew.
PG is in a bubble and has a distorted view, but unlike a lot of rich people, he's a real producer. Y Combinator has made the world a better place in terms of new businesses, wealth created, people trained, etc.
Also PG and Sam Altman are very responsive to critics, they understand that they live in a bubble and that other people have a valid point of view. Compare that to the essays written by the people at Andressen Horowitz which vary from "let them eat cake" to the kind of rich people complaining that people criticizing them are ruining the economy for the rest of us as Paul Krugman has recently pointed out.
Also PG and Sam Altman are very responsive to critics, they understand that they live in a bubble and that other people have a valid point of view. Compare that to the essays written by the people at Andressen Horowitz which vary from "let them eat cake" to the kind of rich people complaining that people criticizing them are ruining the economy for the rest of us as Paul Krugman has recently pointed out.
>I think the question PG needs to address is this: what is the justification for non-founder executives getting paid tens of millions of dollars at the expense of other employees? What is the justification for those top-level salaries to exist even when the company is doing badly and regular employees don't see a dime in raises or bonuses that year?
I definitely agree that its a shitty situation. However, as far as I understand it the justification is that executive salaries are public which led to a salary arms-race where companies are forced to throw more and more ridiculous sums of money at executives.
I definitely agree that its a shitty situation. However, as far as I understand it the justification is that executive salaries are public which led to a salary arms-race where companies are forced to throw more and more ridiculous sums of money at executives.
That's the convenient dodge.
The source of the problem whereby the trustees of publically owned companies both determine and benefit from high salaries is plainly obvious as a principal-agent problem.
The source of the problem whereby the trustees of publically owned companies both determine and benefit from high salaries is plainly obvious as a principal-agent problem.
There's a reason why in the US, the federal Constitution contains explicit clauses to stop things like Congress voting themselves an unaccountable salary increase (it can't take effect for any individual member until after their next election) or creating/giving raises to other government positions they'll switch into (after creating or raising the pay of a position, they become ineligible to hold it until after their term in Congress expires -- which led to some interesting debates over whether it's legal to reduce a previously-raised salary to its original level in order to appoint a current member of Congress to it).
>Bottom line is that the type of wealth PG enables founders to create, and the subsequent inequality, is not the type society has a problem with.
Seems like people are increasingly displeased at founders' preferential tax treatment of their shares though.
Seems like people are increasingly displeased at founders' preferential tax treatment of their shares though.
How can he miss this: http://edition.cnn.com/interactive/2015/03/opinion/ctl-child... ?
Maybe he sees the poor, but labels them as lazy and not driven. It makes it easier to explain how some people worry about how their car doors open, while others worry about their next meal.
Maybe he sees the poor, but labels them as lazy and not driven. It makes it easier to explain how some people worry about how their car doors open, while others worry about their next meal.
This article was flagged by users, presumably because it is a dupe of the discussion at https://news.ycombinator.com/item?id=10826838.
There's a lot of overlap, but my full article is actually the response as intended, and that comment is a condensed and incomplete summary due to character limit.
Getting burned at the stake for heresy? :)
I thought it was an interesting read (though I don't agree with all, only some) and would be a good complement to PG's article.
I thought it was an interesting read (though I don't agree with all, only some) and would be a good complement to PG's article.
With all due respect, content like this is better served in an article format, rather than a comment to an existing (and already very crowded) discussion.
We have had many submissions in the past that were responses to another submission. In my opinion, this submission was wrongfully flagged, and should be unflagged so that it can go back to the top where it belongs.
We have had many submissions in the past that were responses to another submission. In my opinion, this submission was wrongfully flagged, and should be unflagged so that it can go back to the top where it belongs.
The limited space of the front page is the defining constraint of HN. We often treat follow-up articles as duplicates for that reason, so the flags are acting in a moderation capacity here.
Some users would like to see two heated discussions about income inequality on the front page, but I can assure you that many others would not.
Some users would like to see two heated discussions about income inequality on the front page, but I can assure you that many others would not.
That's great. But those of us who don't agree feel as though our opinions are being squelched by those who are in control of the system (ironic, no?). Consider that before you enforce your policies and potentially alienate a large part of your community.
"Those who are in control of the system" in this case are simply your fellow users. The community is often in disagreement about what should be on the front page. To the extent that we intervene as moderators, it's often to try to balance the competing concerns. Unfortunately it seems to be impossible to do that perfectly.
I'm fully aware of that. However, partly since it's impossible to quantify the number of users who wish to avoid so-called duplicate posts, it's easy to interpret efforts at moderation as disagreement with an opinion.
At the end of the day, if Paul Graham's opinion gets a chance at prime blog real estate, shouldn't people who disagree with him get the same chance?
At the end of the day, if Paul Graham's opinion gets a chance at prime blog real estate, shouldn't people who disagree with him get the same chance?
> it's easy to interpret efforts at moderation as disagreement with an opinion
It certainly is easy, but it's an uncharitable interpretation. We're moderating this thread less, not more, than we normally would.
One asymmetry here is that you're upset about a specific case, but we have to moderate HN in general. If you can come up with a viable set of general principles that would make HN significantly better, I'd like to know what they are. I personally have found it to be a hard problem.
A second asymmetry is that the cases where you dislike HN moderation stand out far more than the cases you agree with. (I mean "you" the reader, not you personally.) The latter simply blend into the status quo. Such perceptions are prone to bias, which is one reason it's easy to be uncharitable.
It certainly is easy, but it's an uncharitable interpretation. We're moderating this thread less, not more, than we normally would.
One asymmetry here is that you're upset about a specific case, but we have to moderate HN in general. If you can come up with a viable set of general principles that would make HN significantly better, I'd like to know what they are. I personally have found it to be a hard problem.
A second asymmetry is that the cases where you dislike HN moderation stand out far more than the cases you agree with. (I mean "you" the reader, not you personally.) The latter simply blend into the status quo. Such perceptions are prone to bias, which is one reason it's easy to be uncharitable.
> If you can come up with a viable set of general principles
> that would make HN significantly better, I'd like to know
> what they are. I personally have found it to be a hard
> problem.
[deleted]
[deleted]
>>Some users would like to see two heated discussions about income inequality on the front page, but I can assure you that many others would not.
Yeah, but how many? We know how many people upvote a submission. We can't see how many people flag it. And flags seem to carry far more weight than upvotes, so we have a situation where a dissident minority squashes the will of the majority and censors discussion.
The other issue of course is how crowded conversations get and how difficult it is for newcomers to join. If a submission has 300+ comments, good luck having your voice heard. Whereas "response" submissions give voice to second and third wave commenters who don't have the luxury of refreshing HN every 10 minutes to catch conversations that are on the upswing.
Yeah, but how many? We know how many people upvote a submission. We can't see how many people flag it. And flags seem to carry far more weight than upvotes, so we have a situation where a dissident minority squashes the will of the majority and censors discussion.
The other issue of course is how crowded conversations get and how difficult it is for newcomers to join. If a submission has 300+ comments, good luck having your voice heard. Whereas "response" submissions give voice to second and third wave commenters who don't have the luxury of refreshing HN every 10 minutes to catch conversations that are on the upswing.
I've seen Paul Graham make a few shocking remarks about wealth distribution claiming for instance there'd be no Sergey and Larry (i.e. Google) if they thought some of their wealth was given to the poor. I doubt Sergey and Larry would have been one bit perturbed if they thought they would have amassed 80% of or even less. In their wildest dreams they could probably not have even imagined amassing 20% of that. But I don't want to get bogged down talking about their outlying data point - though Mr Graham chose to present it as exemplar.
My main objection to Mr Graham (apart from his general "let them eat LISP" tone) is that his point is moot in the larger context. Yes it is true that the technology sectors have been phenomenally successful in the last few years but they are such a tiny amount of the actual working economy. They only stand out because they are still in growth while the vast bulk of the economy is not.
Mr Graham quite grandiosely describes himself as a "creator of inequality" as though he is somehow on a par with these captains of industry, the 1% or economic elite as we variously describe them but he is not. He's just another cog in the system - a well remunerated cog certainly but a cog nonetheless.
As a programmer myself I enjoy an elevated income and standard of living. Having worked in a few startups I have rubbed shoulder regularly with a few millionaires (self-made and otherwise) and by and large I would describe these guys as often friendly, often generous, and always fiendishly clever and hard working. I've never envied them their gains and I've never wanted for more - I'm doing a job I love and I have enough money to live in comfort and can buy most things I need without having to struggle.
But we are in a different world my millionaire friends and I. In the various other walks of life I encounter I see people working harder than me, more qualified than I, and enjoying far less job security than me, and all simply because they work in "low growth" sectors of the economy. Sectors that are nonetheless necessary, such as health, with skills that are nonetheless indispensable (nurses, firemen) yet woefully under resourced. All because they aren't growth industries - which can basically be reinterpreted as "there isn't a quick buck to be made".
On the flip side to that Mr Graham talks about how the successful businesses are those that have increased productivity by harnessing technology to increase efficiency and productivity but if that is the general trend, that the economy is nurturing more efficient use of resources then why isn't the cost of living going down?
The truth of it is that Mr Graham and I are enjoying relatively sweet times because we are the darlings of capital. We give better returns on investment than other sectors of the economy. We find new ways to do things so that the cost of running businesses is decreased whilst still charging the same price for the services to the consumer.
We shouldn't be so quick to set ourselves at odds with the egalitarian movement. Certainly I wouldn't rush to pay more tax or earn a lesser wage - but at the same time it does hurt me to see the numbers of homeless increasing, my friends and family struggling, and the quality of medical care in decline. I'd have to weigh these factors up before taking flight with my valuable skillset.
But what I do wonder about, is about these shadowy figures in the background that always seem to be taking a cut. I mean the actors and organisations that fund and manipulate all of this - that nurture "high growth" systems and starve the "low growth" ones - whether it's on purpose, or just an emergent pattern - and what are we going to do about it?
I believe in Capitalism, and I accept that inequality is a natural factor of society. But that shouldn't preclude me from saying that we need more socialism in our society - that doesn't mean I want a centrally planned communist state like the USSR, it just means that I want our valuations to be more nuanced than just "return on investment".
Somebody somewhere else on here wrote that if you increased taxes on the wealthy it would only amount to a few thousand dollars extra per person. Well I can only say that is a lot of money to somebody that doesn't have a thousand dollars and collectively it is a lot of money for an institution such as a hospital.
I believe the phrase these days is that you should "check your privilege".
My main objection to Mr Graham (apart from his general "let them eat LISP" tone) is that his point is moot in the larger context. Yes it is true that the technology sectors have been phenomenally successful in the last few years but they are such a tiny amount of the actual working economy. They only stand out because they are still in growth while the vast bulk of the economy is not.
Mr Graham quite grandiosely describes himself as a "creator of inequality" as though he is somehow on a par with these captains of industry, the 1% or economic elite as we variously describe them but he is not. He's just another cog in the system - a well remunerated cog certainly but a cog nonetheless.
As a programmer myself I enjoy an elevated income and standard of living. Having worked in a few startups I have rubbed shoulder regularly with a few millionaires (self-made and otherwise) and by and large I would describe these guys as often friendly, often generous, and always fiendishly clever and hard working. I've never envied them their gains and I've never wanted for more - I'm doing a job I love and I have enough money to live in comfort and can buy most things I need without having to struggle.
But we are in a different world my millionaire friends and I. In the various other walks of life I encounter I see people working harder than me, more qualified than I, and enjoying far less job security than me, and all simply because they work in "low growth" sectors of the economy. Sectors that are nonetheless necessary, such as health, with skills that are nonetheless indispensable (nurses, firemen) yet woefully under resourced. All because they aren't growth industries - which can basically be reinterpreted as "there isn't a quick buck to be made".
On the flip side to that Mr Graham talks about how the successful businesses are those that have increased productivity by harnessing technology to increase efficiency and productivity but if that is the general trend, that the economy is nurturing more efficient use of resources then why isn't the cost of living going down?
The truth of it is that Mr Graham and I are enjoying relatively sweet times because we are the darlings of capital. We give better returns on investment than other sectors of the economy. We find new ways to do things so that the cost of running businesses is decreased whilst still charging the same price for the services to the consumer.
We shouldn't be so quick to set ourselves at odds with the egalitarian movement. Certainly I wouldn't rush to pay more tax or earn a lesser wage - but at the same time it does hurt me to see the numbers of homeless increasing, my friends and family struggling, and the quality of medical care in decline. I'd have to weigh these factors up before taking flight with my valuable skillset.
But what I do wonder about, is about these shadowy figures in the background that always seem to be taking a cut. I mean the actors and organisations that fund and manipulate all of this - that nurture "high growth" systems and starve the "low growth" ones - whether it's on purpose, or just an emergent pattern - and what are we going to do about it?
I believe in Capitalism, and I accept that inequality is a natural factor of society. But that shouldn't preclude me from saying that we need more socialism in our society - that doesn't mean I want a centrally planned communist state like the USSR, it just means that I want our valuations to be more nuanced than just "return on investment".
Somebody somewhere else on here wrote that if you increased taxes on the wealthy it would only amount to a few thousand dollars extra per person. Well I can only say that is a lot of money to somebody that doesn't have a thousand dollars and collectively it is a lot of money for an institution such as a hospital.
I believe the phrase these days is that you should "check your privilege".
As a response to PG's article, I posted this:
>PG is wrong that he is a creator of economic inequality. Technology development usually brings prices down. This is deflationary; the 'big picture' way that deflation happens: that prices are discovered more efficiently, or resources are used more efficiently, or that idle labor capacity is recruited to fulfill a want or need that was not known before (esp: think uber/lyft).
>Deflationary processes are inherently anti-inequality. Think of it this way. If we never changed the minimum wage, then people's incomes, especially at the bottom segment of society would make their net economic potential greater over time.
>It is not the investment in technology that makes "tech drive inequality". It is the political structure around it. We have a structure where monetary policy shoves free or cheap money into the faces of banks and the investment classes in efforts to 'stimulate' the economy, where the secular (over decades, not over years) inflation drives low- and middle- class citizens into risky investment activity just to be able to sustain themselves in their later years (effectively a subsidy for the rich).
"families often consist of two breadwinners (& no children) with a hearty amount of debt, nothing owned, and few savings. The family unit itself may even be weaker because of less shared ownership. Wages haven’t tracked productivity for decades, so wages haven’t risen since the previous story was normal."
Is this because of rapacious capitalists taking wages? The nominal wage has increased since the early 70s, but the purchasing power of that nominal wage has gone down faster than the increase. This is policy, not capitalism.
http://www.nytimes.com/2012/04/06/opinion/krugman-not-enough...
Policy wonks like to argue that the fed should "pay more attention to employment". The irony is that if you think that people are consigned to being wage slaves, a national policy of total employment is keeping people there. There is a cost to getting people employed, and that is that those who are employed are going to be paid less, and the way you trick people into that is by making what people earn be less, even for the same or greater nominal amount ("sticky wages argument").
What happened in the early 70s? Prior to the nixon shock we had wage increases leading inflation and a trending toward decreasing of the wage gap that had momentum enough to continue till about the 2000s (if you think about it that momentum makes sense because entrants into the workforce in the 70s started retiring in the 200s) - during the bush/obama era we see income inequality turning the corner.
While we are certainly trending towards getting worse things actually are not that bad:
http://im.ft-static.com/content/images/d823a614-9e82-11e5-b4...
Everyone is worried about the far right side of the graph (which is partially a histogram artifact) but look at the left hand side of the graph and see how the lowest income fraction of society is far less populated than 40 years ago. (yes, between 2008 and 2015 it is getting worse, which is cause to worry)
>PG is wrong that he is a creator of economic inequality. Technology development usually brings prices down. This is deflationary; the 'big picture' way that deflation happens: that prices are discovered more efficiently, or resources are used more efficiently, or that idle labor capacity is recruited to fulfill a want or need that was not known before (esp: think uber/lyft).
>Deflationary processes are inherently anti-inequality. Think of it this way. If we never changed the minimum wage, then people's incomes, especially at the bottom segment of society would make their net economic potential greater over time.
>It is not the investment in technology that makes "tech drive inequality". It is the political structure around it. We have a structure where monetary policy shoves free or cheap money into the faces of banks and the investment classes in efforts to 'stimulate' the economy, where the secular (over decades, not over years) inflation drives low- and middle- class citizens into risky investment activity just to be able to sustain themselves in their later years (effectively a subsidy for the rich).
"families often consist of two breadwinners (& no children) with a hearty amount of debt, nothing owned, and few savings. The family unit itself may even be weaker because of less shared ownership. Wages haven’t tracked productivity for decades, so wages haven’t risen since the previous story was normal."
Is this because of rapacious capitalists taking wages? The nominal wage has increased since the early 70s, but the purchasing power of that nominal wage has gone down faster than the increase. This is policy, not capitalism.
http://www.nytimes.com/2012/04/06/opinion/krugman-not-enough...
Policy wonks like to argue that the fed should "pay more attention to employment". The irony is that if you think that people are consigned to being wage slaves, a national policy of total employment is keeping people there. There is a cost to getting people employed, and that is that those who are employed are going to be paid less, and the way you trick people into that is by making what people earn be less, even for the same or greater nominal amount ("sticky wages argument").
What happened in the early 70s? Prior to the nixon shock we had wage increases leading inflation and a trending toward decreasing of the wage gap that had momentum enough to continue till about the 2000s (if you think about it that momentum makes sense because entrants into the workforce in the 70s started retiring in the 200s) - during the bush/obama era we see income inequality turning the corner.
While we are certainly trending towards getting worse things actually are not that bad:
http://im.ft-static.com/content/images/d823a614-9e82-11e5-b4...
Everyone is worried about the far right side of the graph (which is partially a histogram artifact) but look at the left hand side of the graph and see how the lowest income fraction of society is far less populated than 40 years ago. (yes, between 2008 and 2015 it is getting worse, which is cause to worry)
> The nominal wage has increased since the early 70s, but the purchasing power of that nominal wage has gone down faster than the increase. This is policy, not capitalism.
Which option would you prefer? (1) You have a 70s real wage, but can only purchase goods and services that were available in the 70s, or (2) You have a 2016 real wage and you can purchase all goods and services available today. Keep in mind that real wages have stayed roughly constant since 1970.
Most people I know will pick option (2), which suggests that purchasing power has in fact increased rather than decreased. Technology is improving and everything is becoming cheaper, bringing up our standard of living.
Here are some facts about Americans living in poverty, according to the Census Bureau [1]: 80% of households below the poverty level have cell phones. 96% have a television and 83% have a DVR. 97% have refrigerators, 96% have stoves, 93% microwaves, and more than 83% have air conditioning. 58% have computers. If you had to choose, would you prefer to live in poverty today in 2016, or would you prefer to live in poverty in 1970? How about 1900 or 1800? How does the standard of living in poverty compare to any other time in history? An American living in poverty today probably has a better standard of living than a typical king did in centuries past.
[1] http://www.census.gov/hhes/well-being/publications/extended-...
Which option would you prefer? (1) You have a 70s real wage, but can only purchase goods and services that were available in the 70s, or (2) You have a 2016 real wage and you can purchase all goods and services available today. Keep in mind that real wages have stayed roughly constant since 1970.
Most people I know will pick option (2), which suggests that purchasing power has in fact increased rather than decreased. Technology is improving and everything is becoming cheaper, bringing up our standard of living.
Here are some facts about Americans living in poverty, according to the Census Bureau [1]: 80% of households below the poverty level have cell phones. 96% have a television and 83% have a DVR. 97% have refrigerators, 96% have stoves, 93% microwaves, and more than 83% have air conditioning. 58% have computers. If you had to choose, would you prefer to live in poverty today in 2016, or would you prefer to live in poverty in 1970? How about 1900 or 1800? How does the standard of living in poverty compare to any other time in history? An American living in poverty today probably has a better standard of living than a typical king did in centuries past.
[1] http://www.census.gov/hhes/well-being/publications/extended-...
You're presenting a false choice. You could have a 1970 real wage and buy the stuff of today? My point is exactly the fact that we don't have that is a result of inflation. Please explain, mechanistically, why you believe that there are only two options here.
I'm simply presenting a thought experiment, not an actual choice. The thought experiment demonstrates that purchasing power has increased from 1970 to 2016 (at least, if you prefer 2016 wages and products to 1970 wages and products).
If you'd like to argue that "purchasing power should have increased more if it wasn't for XYZ..." then that's fine, but it's separate from the point that I was debunking:
> but the purchasing power of that nominal wage has gone down faster than the increase
If one prefers 2016 products at 2016 wages, then purchasing power has increased. Since real wages have stayed constant, we're basically just talking about 1970 products vs. 2016 (and 2016 products are much better, cheaper, etc)
If you'd like to argue that "purchasing power should have increased more if it wasn't for XYZ..." then that's fine, but it's separate from the point that I was debunking:
> but the purchasing power of that nominal wage has gone down faster than the increase
If one prefers 2016 products at 2016 wages, then purchasing power has increased. Since real wages have stayed constant, we're basically just talking about 1970 products vs. 2016 (and 2016 products are much better, cheaper, etc)
Sure, I agree that the products in my life seem better than the products I would have had in the 70s. I am just wary of this argument because it becomes an argument for substitution (which is one way that government fudges the effect of inflation on the poor)... There are also a lot of things you aren't taking into account. In 2016, your phone costs $100 and has to be replaced every two years. Your phone in the 70s might probably still work today (I think most PBXs still support rotary). Has the improvement in quality of life tracked this increased cost?
Sure, purchasing power has increased massively for fancy new 2016 products like cellphones, TVs and gadgets. Unfortunately it's also plummeted for old-fashioned 1970s-esque products like food, fuel to go to work, and a roof over your head and even though it's 2016 people still need those products. Having a 42" television for a price that would have seemed astonishing a few years ago is little help if you can't feed your family and can barely pay the rent.
Not true for food or energy, hard to find (imputed) rent vs income.
http://www.npr.org/sections/thesalt/2015/03/02/389578089/you... https://www.eia.gov/todayinenergy/detail.cfm?id=10891
http://www.npr.org/sections/thesalt/2015/03/02/389578089/you... https://www.eia.gov/todayinenergy/detail.cfm?id=10891
In the 70's a family with only one breadwinner earned enough to pay for a mortgage as well as all the other food and energy.
I'd take options 1 in a heartbeat, my student debt would vanish and my rent in NYC would be almost nothing.
Are you sure? You wouldn't have a personal computer, a cell phone, or the Internet. You'd have a rotary telephone in your house only. You'd have a TV that looks something like this: http://www.rewindmuseum.com/images3/hmv2647side.gif
On that TV you can watch 1970s programming only. A 25" TV in 1970 cost $850 dollars ('77 Sylvania), which is equivalent to $5200 dollars today. I can hardly even find a TV that costs $5k today! For $4000 I can buy an 80-inch absolutely amazing Visio M80: http://www.amazon.com/dp/B00VQO5HSE - and they don't even sell TVs as small as 25" any more.
Your stove and refrigerator look like this, and work about as well as they look: http://airconvintage.com/antique/images/101_8149.JPG You also have access only to 1970s automobiles, which are nowhere near as comfortable, quiet, and maintenance-free as today.
If you're making this (hypothetical) tradeoff, then you're also limited to 1970s medicine and dentistry as well. Would you really choose 1970s medicine over today, too?
There are some people who would make this tradeoff, and I can respect that choice if you are one, but most people would not. Most people would prefer to live in 2016 with the products and services available today.
On that TV you can watch 1970s programming only. A 25" TV in 1970 cost $850 dollars ('77 Sylvania), which is equivalent to $5200 dollars today. I can hardly even find a TV that costs $5k today! For $4000 I can buy an 80-inch absolutely amazing Visio M80: http://www.amazon.com/dp/B00VQO5HSE - and they don't even sell TVs as small as 25" any more.
Your stove and refrigerator look like this, and work about as well as they look: http://airconvintage.com/antique/images/101_8149.JPG You also have access only to 1970s automobiles, which are nowhere near as comfortable, quiet, and maintenance-free as today.
If you're making this (hypothetical) tradeoff, then you're also limited to 1970s medicine and dentistry as well. Would you really choose 1970s medicine over today, too?
There are some people who would make this tradeoff, and I can respect that choice if you are one, but most people would not. Most people would prefer to live in 2016 with the products and services available today.
Yeah, really okay with that. Assuming I'm still paid a Software Engineer salary, I'd have enough disposable income for a then-new sports car (Corvette Stingray, thank you).
None of those things make people happy.
Childcare, healthcare, education, shelter, world travel, free time, organic food.
Keep your trinkets and baubles.
Childcare, healthcare, education, shelter, world travel, free time, organic food.
Keep your trinkets and baubles.
[deleted]
Beer still existed in the 70's.
Perhaps I've been sensitized by recent reading[1], but I don't think this response addresses the real problems with PG's article.
The problem with inequality is not necessarily the inequality itself. The poor in America are significantly better off than the wealthy were not very long ago, in most material senses, as has been repeatedly pointed out. So what if they don't get as good health care or education or whatever as some of their neighbors; it's still better than they would have had. The problem is that relative wealth, inequality, is power. It always has been, and it always will be.[2] (Admittedly, in other societies, wealth isn't the only power. But with the decline of the church and the significant lack of both feudal aristocracy and totalitarian[3] governments, wealth is really the only power left.)
So, here's a question: is it proper for a vanishingly small segment of society to be able to establish and maintain power over the vast majority? Me, I've got no idea. Don't really care, either. Because a better question is: is it a good idea? And I think the verdict of history there is a pretty solid Nope.
Are you unhappy with the Koch brothers' political views? That's another stupid question; their specific desires are pretty much irrelevant. Much more important is how you feel about how they go about expressing and supporting their views. When reading PG's or this article, remember that Charles' and David's father was very much a start-up entrepreneur. Their grandfather was a Dutch immigrant and printer and Fred was exactly the kind of person PG is talking about in his essay. Now, you can can go on about "limiting corruption in politics", but keep in mind that the Koch brothers are apparently planning on putting something like a trillion dollars into the 2016 election; it's hard to perceive anything but that their views will always matter more than yours.
Inequality in wealth and power is not even a new thing in this country; I'm given to understand that the state now is at or approaching levels from the gilded age, but not exceeding them. What is new, is that for a time in this country we didn't have wild inequality. Here's what Paul has to say about that:
"I think rising economic inequality is the inevitable fate of countries that don't choose something worse. We had a 40 year stretch in the middle of the 20th century that convinced some people otherwise. But as I explained in The Refragmentation, that was an anomaly—a unique combination of circumstances that compressed American society not just economically but culturally too."
(Personally, I think that the cultural compression that Paul fears so much is somewhat overblown. But then, I grew up in the '70s in Amarillo, TX (not far from the Koch's Quanah, weirdly) and rather fortunately had the library at WTSU about 45 minutes south in Canyon.)
The thing that bothers me most: All of those fancy technologies that PG emphasizes, those that some commentors here are happy to trade 45 years of real wage growth for, had their direct roots in that brief period of weird equality. What happens next? What happens after AirBnB puts all the hotels out of business and we're all staying in each other's spare bedrooms on trips? What happens after Uber has killed off all the taxi companies in the world and replaced them with spare-time drivers? Do things still keep getting better and better? Sure, my nifty new Galaxy Note is better than my old land-line, but exactly how much better is an iPhone6 compared to a 5?
Or, ultimately, do Larry Ellison's sons, Charles and David, decide they don't want to deal with all of this bullshit and start throwing their weight around Silicon Valley?
And when they do, what are you going to do about it?
[1] The Story of Philosophy, by Will Durant, if you're interested. In fact, I'm in the middle of the chapter on Nietzsche; one of the best comments in this very well-written and quite good book is a footnote following a quote from Nietzsche regarding how excesses in the behavior of the übermensch will be restrained by morality: something to the effect of "How did that get back in here?"
In any case, PG's comments like, "Most people who get rich tend to be fairly driven. Whatever their other flaws, laziness is usually not one of them" (Laziness isn't one of the flaws of that single mother working three jobs, either.) or "Louis Brandeis said 'We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both.' That sounds plausible. But if I have to choose between ignoring him and ignoring a polynomial curve that has been operating for thousands of years, I'll bet on the curve" strike me with a certain sense of deja vu.
[2] In anything remotely resembling a foreseeable human society.
[3] "Totalitarianism is best understood as any system of political ideas that is both thoroughly dictatorial and utopian." (http://www.iep.utm.edu/totalita/)
The problem with inequality is not necessarily the inequality itself. The poor in America are significantly better off than the wealthy were not very long ago, in most material senses, as has been repeatedly pointed out. So what if they don't get as good health care or education or whatever as some of their neighbors; it's still better than they would have had. The problem is that relative wealth, inequality, is power. It always has been, and it always will be.[2] (Admittedly, in other societies, wealth isn't the only power. But with the decline of the church and the significant lack of both feudal aristocracy and totalitarian[3] governments, wealth is really the only power left.)
So, here's a question: is it proper for a vanishingly small segment of society to be able to establish and maintain power over the vast majority? Me, I've got no idea. Don't really care, either. Because a better question is: is it a good idea? And I think the verdict of history there is a pretty solid Nope.
Are you unhappy with the Koch brothers' political views? That's another stupid question; their specific desires are pretty much irrelevant. Much more important is how you feel about how they go about expressing and supporting their views. When reading PG's or this article, remember that Charles' and David's father was very much a start-up entrepreneur. Their grandfather was a Dutch immigrant and printer and Fred was exactly the kind of person PG is talking about in his essay. Now, you can can go on about "limiting corruption in politics", but keep in mind that the Koch brothers are apparently planning on putting something like a trillion dollars into the 2016 election; it's hard to perceive anything but that their views will always matter more than yours.
Inequality in wealth and power is not even a new thing in this country; I'm given to understand that the state now is at or approaching levels from the gilded age, but not exceeding them. What is new, is that for a time in this country we didn't have wild inequality. Here's what Paul has to say about that:
"I think rising economic inequality is the inevitable fate of countries that don't choose something worse. We had a 40 year stretch in the middle of the 20th century that convinced some people otherwise. But as I explained in The Refragmentation, that was an anomaly—a unique combination of circumstances that compressed American society not just economically but culturally too."
(Personally, I think that the cultural compression that Paul fears so much is somewhat overblown. But then, I grew up in the '70s in Amarillo, TX (not far from the Koch's Quanah, weirdly) and rather fortunately had the library at WTSU about 45 minutes south in Canyon.)
The thing that bothers me most: All of those fancy technologies that PG emphasizes, those that some commentors here are happy to trade 45 years of real wage growth for, had their direct roots in that brief period of weird equality. What happens next? What happens after AirBnB puts all the hotels out of business and we're all staying in each other's spare bedrooms on trips? What happens after Uber has killed off all the taxi companies in the world and replaced them with spare-time drivers? Do things still keep getting better and better? Sure, my nifty new Galaxy Note is better than my old land-line, but exactly how much better is an iPhone6 compared to a 5?
Or, ultimately, do Larry Ellison's sons, Charles and David, decide they don't want to deal with all of this bullshit and start throwing their weight around Silicon Valley?
And when they do, what are you going to do about it?
[1] The Story of Philosophy, by Will Durant, if you're interested. In fact, I'm in the middle of the chapter on Nietzsche; one of the best comments in this very well-written and quite good book is a footnote following a quote from Nietzsche regarding how excesses in the behavior of the übermensch will be restrained by morality: something to the effect of "How did that get back in here?"
In any case, PG's comments like, "Most people who get rich tend to be fairly driven. Whatever their other flaws, laziness is usually not one of them" (Laziness isn't one of the flaws of that single mother working three jobs, either.) or "Louis Brandeis said 'We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both.' That sounds plausible. But if I have to choose between ignoring him and ignoring a polynomial curve that has been operating for thousands of years, I'll bet on the curve" strike me with a certain sense of deja vu.
[2] In anything remotely resembling a foreseeable human society.
[3] "Totalitarianism is best understood as any system of political ideas that is both thoroughly dictatorial and utopian." (http://www.iep.utm.edu/totalita/)
>The thing that bothers me most: All of those fancy technologies that PG emphasizes, those that some commentors here are happy to trade 45 years of real wage growth for, had their direct roots in that brief period of weird equality. What happens next? What happens after AirBnB puts all the hotels out of business and we're all staying in each other's spare bedrooms on trips? What happens after Uber has killed off all the taxi companies in the world and replaced them with spare-time drivers? Do things still keep getting better and better? Sure, my nifty new Galaxy Note is better than my old land-line, but exactly how much better is an iPhone6 compared to a 5?
The Google founders attempt to throw us out of cyberpunk capitalism by setting off a technological singularity.
I'm not joking. Look at their hobbies: artificial intelligence, life extension, robotics. It's really obvious: they are trying to play at being Vernor Vinge characters.
Which actually carries an important point: a lot of the people who do the real work of pushing the high-tech business forward don't particularly care for capitalism itself. They'd just as soon push for far more technological solutionism and alter socioeconomic relations to suit.
The Google founders attempt to throw us out of cyberpunk capitalism by setting off a technological singularity.
I'm not joking. Look at their hobbies: artificial intelligence, life extension, robotics. It's really obvious: they are trying to play at being Vernor Vinge characters.
Which actually carries an important point: a lot of the people who do the real work of pushing the high-tech business forward don't particularly care for capitalism itself. They'd just as soon push for far more technological solutionism and alter socioeconomic relations to suit.
They think they are Vernor Vinge characters, but in reality they are end up as Sleep Dealers[1].
[1] https://www.youtube.com/watch?v=xW8oSRSzS7M
[1] https://www.youtube.com/watch?v=xW8oSRSzS7M
Oh hey, I remember that movie! I always wondered why the cyberpunk dystopia revolved around Mexican labor, but hey.
Using wealth to exert political power is a problem, but we don't need to redistribute wealth to fix it. (We might want to redistribute wealth for other reasons, just not this one.) What we want is to be able to reject the influence of money on our politics. People accept money to influence politics because they can use that money to convince anyone to produce for them. If people started to reject that money, the incentive to participate in manipulating our democracy would disappear.
This is merit capitalism. http://meritcapitalism.com
This is merit capitalism. http://meritcapitalism.com
[deleted]
This sure is getting flagged a lot.
My guess is that is people's way of expressing disapproval without a downvote for threads.
While I disagree with the author's points I think they are topical given pg's essays.
While I disagree with the author's points I think they are topical given pg's essays.
This article is being buried, dropping from second place to tenth in an instant. Interestingly it's being surpassed by articles that are both older and with less points.
The thread is clearly a duplicate of https://news.ycombinator.com/item?id=10826838. Normally we bury duplicates outright. We're actually holding off doing that here, because some people seem to feel strongly about it.
I have read both, and there is value added here, despite it having a large overlap with the earlier discussion.
thenerdfiles(2)
meagain20000(3)
Umn44(4)
this feels like populism. pg's articles are well thought and argumented. i actually learned a lot from them. it does not matter do i agree with everything there or not though i mostly do. if someone can write that good from a different aspect or point of view so that i can learn more on his/hers views that would be great.
Got this far and stopped reading:
To quote Graham, mafioso of the startup incubators:
I have lots of valid reasons to be really grumpy about lots of things. I am also not a fan per se of PG. But any supposed debate that starts by basically smearing the character of the person you are debating is unlikely to be based on sound, objective reasoning. This piece is almost certainly not motivated by a desire to correct any logic missteps in pg's writing. It is most likely a thinly veiled excuse for trying to trash the man personally.
To quote Graham, mafioso of the startup incubators:
I have lots of valid reasons to be really grumpy about lots of things. I am also not a fan per se of PG. But any supposed debate that starts by basically smearing the character of the person you are debating is unlikely to be based on sound, objective reasoning. This piece is almost certainly not motivated by a desire to correct any logic missteps in pg's writing. It is most likely a thinly veiled excuse for trying to trash the man personally.
Ah, I was being lighthearted with that word choice, and I don't have any axe to grind with PG personally. An alternative which captures the same sentiment without any negative connotations would be "maestro" "majordomo" "magnate" or even "de Medici".
"Founder" or "investor" are equally accurate as to who and what PG happens to be. If you are writing for the HN audience, you can assume that the vast majority of your readers are well aware who is and how much power he exercises. To me, your "clarification" smacks of "Power corrupts and absolute power corrupts absolutely and (in my opinion) pg simply has a too distasteful amount of power to be assumed to be a decent human being."
Maybe it's actually better that OP did that as in "you've been warned" as to some bias. I didn't see it as a smear and by the way Ron Conway has been referred to as "the godfather" by the mainstream press and bloggers (at least as I recall).
Sure. And we also have the expression "PayPal Mafia." But those are written for mainstream audiences. This piece appears to have been written for Hacker News, where the vast majority of readers know exactly who pg is, what he does and that he is enormously powerful. Almost no one here needs to be told by analogy that pg is a serious contender of that sort.
But have an upvote.
But have an upvote.
oh my god he is being tongue in cheek seriously
I disagree with most of the post, but here is one point that I'm particularly at odds with:
> We have no obligation to stop someone from “becoming rich”– but we have a strong obligation to stop someone from becoming poor.
I don't see a way to stop people from becoming poor. The most common way of becoming poor is not to produce wealth. How could we fulfill our "strong obligation" and force people to produce wealth?
> We have no obligation to stop someone from “becoming rich”– but we have a strong obligation to stop someone from becoming poor.
I don't see a way to stop people from becoming poor. The most common way of becoming poor is not to produce wealth. How could we fulfill our "strong obligation" and force people to produce wealth?
> The most common way of becoming poor is not to produce wealth. How could we fulfill our "strong obligation" and force people to produce wealt
There is a break in your logic: your conclusion would only make sense if not producing wealth is the only way of becoming poor, which is not the case (think bankrupting medical bills that can make you poor even as you 'produce wealth').
To answer your question directly: you can fulfill the strong obligation to stop people becoming poor by having a strong social security net, and possibly a guaranteed minimum income.
There is a break in your logic: your conclusion would only make sense if not producing wealth is the only way of becoming poor, which is not the case (think bankrupting medical bills that can make you poor even as you 'produce wealth').
To answer your question directly: you can fulfill the strong obligation to stop people becoming poor by having a strong social security net, and possibly a guaranteed minimum income.
> There is a break in your logic: your conclusion would only make sense if not producing wealth is the only way of becoming poor.
I read the strong obligation of stopping people becoming poor as stopping any people from becoming poor, rather than stopping some people from becoming poor. If there is a single feasible way to become poor, then some people would go that way, and we have failed that obligation. The flaw is not in my logic.
Even with strong social security net, you cannot stop people from being poor. The strong social security net would represent the lowest level of income. At the lowest level of income in a society, you're poor, as everyone else is making more than you do. If someone was working and making less than what the social security provides, then they can just stop working and be better off at the security net level.
No matter how strong the social security net, the people resting on it will always be the poorest in the society.
Speaking from experience (grown up in a communist country, living in Western Europe atm), even the strongest form of state-forced salaries/job availability did not prevent people from becoming poor. Unsurprisingly, the current Western European societies are not preventing this either.
I read the strong obligation of stopping people becoming poor as stopping any people from becoming poor, rather than stopping some people from becoming poor. If there is a single feasible way to become poor, then some people would go that way, and we have failed that obligation. The flaw is not in my logic.
Even with strong social security net, you cannot stop people from being poor. The strong social security net would represent the lowest level of income. At the lowest level of income in a society, you're poor, as everyone else is making more than you do. If someone was working and making less than what the social security provides, then they can just stop working and be better off at the security net level.
No matter how strong the social security net, the people resting on it will always be the poorest in the society.
Speaking from experience (grown up in a communist country, living in Western Europe atm), even the strongest form of state-forced salaries/job availability did not prevent people from becoming poor. Unsurprisingly, the current Western European societies are not preventing this either.
> At the lowest level of income in a society, you're poor, as everyone else is making more than you do.
That doesn't sound like the correct definition of being poor. To me - poverty isn't relative but absolute: if you live on less than $X amount a day, you're poor. The amount may vary, depending on who you ask (and where), and this amount depends on the cost of living rather than income percentiles.
If most people makes more than you, you are poorer than them - but not necessarily in poverty (or poor). I can safely say there are no poor Apple engineers, regardless of the existance of someone being the least paid Apple engineer.
That doesn't sound like the correct definition of being poor. To me - poverty isn't relative but absolute: if you live on less than $X amount a day, you're poor. The amount may vary, depending on who you ask (and where), and this amount depends on the cost of living rather than income percentiles.
If most people makes more than you, you are poorer than them - but not necessarily in poverty (or poor). I can safely say there are no poor Apple engineers, regardless of the existance of someone being the least paid Apple engineer.
> To me - poverty isn't relative but absolute: if you live on less than $X amount a day, you're poor.
I agree that the poverty that we should be fighting against is the absolute one. The complaints about "income inequality", however, are by definition dealing with the relative type of poverty.
Indeed, if the topic was "increasing the wealth/well-being/opportunities of the poorest", the discussion would be completely different. Alas, inequality, implying rich people robbing poor ones is so much juicer of an idea.
The second part, about "live on less than $X amount a day" I find badly defined. It's not about money, but about having access to basic wealth (food, clothes, shelter, etc). The money (in any currency) that can buy that wealth changes not only by region, but with time as well. Money is far too fast moving of a target, and it doesn't bear an intrinsic value.
I'd wager that what a poor man has nowadays is way ahead than what a poor man got 50 years back. As somebody above pointed out, the vast majority of households below poverty level in the US have TV set, DVR, cell phone, air conditioning, etc. I don't think that a poor guy in the middle of the last century would think twice about changing places with a poor guy today.
I agree that the poverty that we should be fighting against is the absolute one. The complaints about "income inequality", however, are by definition dealing with the relative type of poverty.
Indeed, if the topic was "increasing the wealth/well-being/opportunities of the poorest", the discussion would be completely different. Alas, inequality, implying rich people robbing poor ones is so much juicer of an idea.
The second part, about "live on less than $X amount a day" I find badly defined. It's not about money, but about having access to basic wealth (food, clothes, shelter, etc). The money (in any currency) that can buy that wealth changes not only by region, but with time as well. Money is far too fast moving of a target, and it doesn't bear an intrinsic value.
I'd wager that what a poor man has nowadays is way ahead than what a poor man got 50 years back. As somebody above pointed out, the vast majority of households below poverty level in the US have TV set, DVR, cell phone, air conditioning, etc. I don't think that a poor guy in the middle of the last century would think twice about changing places with a poor guy today.
> Now: none of the above, and families often consist of two breadwinners (& no children) with a hearty amount of debt, nothing owned, and few savings.
All of this is by choice on the part of the families. People choose to seek employment. People choose to go into debt. People choose to spend rather than save.
> The family unit itself may even be weaker because of less shared ownership.
"The death of the family is the life of the state."[1] When the welfare state grows larger, the family itself becomes less important. If you want to restore the family to its former place, then you must reduce the welfare state.
> Wages haven’t tracked productivity for decades, so wages haven’t risen since the previous story was normal.
How about total benefits, including those mandated by the State? Your wages haven't increased but your employer is spending more than ever on your benefits.
> We’ve lost all of that ground: not just some of it, all of it, and more. We’re back to the 1920s– wage slaves with few rights and no political ability to change things.
We've lost a lot of ground in the quest for liberty, that's for sure. But each June, the Supreme Court creates more "rights" out of thin air. What about those? We have more "rights" than ever, when you look at the burgeoning list of goodies the government doles out.
Income inequality is the result of a free society. Imagine perfectly egalitarian society, in terms of wealth. One day, a musical artist gives a concert, and people voluntarily choose to pay money to see it. Now you have inequality, and it was all voluntary. Should the State jump in and steal the excess capital from the artist and give it back to the patrons to restore equality?
[1] https://mises.org/library/welfare-states-attack-family
All of this is by choice on the part of the families. People choose to seek employment. People choose to go into debt. People choose to spend rather than save.
> The family unit itself may even be weaker because of less shared ownership.
"The death of the family is the life of the state."[1] When the welfare state grows larger, the family itself becomes less important. If you want to restore the family to its former place, then you must reduce the welfare state.
> Wages haven’t tracked productivity for decades, so wages haven’t risen since the previous story was normal.
How about total benefits, including those mandated by the State? Your wages haven't increased but your employer is spending more than ever on your benefits.
> We’ve lost all of that ground: not just some of it, all of it, and more. We’re back to the 1920s– wage slaves with few rights and no political ability to change things.
We've lost a lot of ground in the quest for liberty, that's for sure. But each June, the Supreme Court creates more "rights" out of thin air. What about those? We have more "rights" than ever, when you look at the burgeoning list of goodies the government doles out.
Income inequality is the result of a free society. Imagine perfectly egalitarian society, in terms of wealth. One day, a musical artist gives a concert, and people voluntarily choose to pay money to see it. Now you have inequality, and it was all voluntary. Should the State jump in and steal the excess capital from the artist and give it back to the patrons to restore equality?
[1] https://mises.org/library/welfare-states-attack-family
Which "State" are you referring to? I'm not aware of an organization by that name.
> Imagine perfectly egalitarian society, in terms of wealth.
The "perfect egalitarianism" strawman is, at this point, barely recognizable as either man or straw for all the beatings it's suffered. It is as useless a hypothetical in discussing the appropriate distribution of resources as would be "imagine the entire universe was owned by a single person".
The vast majority of people support the use of some degree of compulsion to obtain a more stable or fair distribution of resources than would be obtained in a state of nature. "Stable" tends to be the goal of the right, while "fair" tends to be the goal of the left. From there, everything is a subject of debate -- how much intervention is too much? what is the preferred distribution? can we reach the preferred distribution with a permissible level of intervention?
> Imagine perfectly egalitarian society, in terms of wealth.
The "perfect egalitarianism" strawman is, at this point, barely recognizable as either man or straw for all the beatings it's suffered. It is as useless a hypothetical in discussing the appropriate distribution of resources as would be "imagine the entire universe was owned by a single person".
The vast majority of people support the use of some degree of compulsion to obtain a more stable or fair distribution of resources than would be obtained in a state of nature. "Stable" tends to be the goal of the right, while "fair" tends to be the goal of the left. From there, everything is a subject of debate -- how much intervention is too much? what is the preferred distribution? can we reach the preferred distribution with a permissible level of intervention?
> Which "State" are you referring to? I'm not aware of an organization by that name.
The State is the entity within society that holds a monopoly on the use of force. It uses that power to coerce members of society to fund its exploits through legal theft called "taxation."
You probably know it by a different name, depending on where you live :-)
The State is the entity within society that holds a monopoly on the use of force. It uses that power to coerce members of society to fund its exploits through legal theft called "taxation."
You probably know it by a different name, depending on where you live :-)
There is no single entity that holds a monopoly on the use of force and effects taxation, so I don't see anything worth granting a proper noun. Part of the reason I am not an Austrian is because I prefer my political science and economics to deal with concrete actions and actual people and organizations, not Abstract Capitalized Entities.
The assertion that taxation is legalized theft enforced through the threat of force is a popular one in certain circles, but it isn't the self-evident fact you believe it to be, either.
The assertion that taxation is legalized theft enforced through the threat of force is a popular one in certain circles, but it isn't the self-evident fact you believe it to be, either.
Of course the individuals who act in their capacity as government employees affect all the outcomes of state action. You may be more of an Austrian than you think if you refuse to recognize "society" and "the state" as independent actors.
> The assertion that taxation is legalized theft enforced through the threat of force is a popular one in certain circles, but it isn't the self-evident fact you believe it to be, either.
What other collection of individuals claims this privilege but the state? (see what I did there ;-) )
Seriously though: if I get a band of guys together and point a gun at you and force you to hand over 25% of your income to us, wouldn't that be illegal? But if I wear a badge and the band of guys is the enforcement arm of the IRS, that's any different?
A more complete analysis: https://mises.org/library/taxation-robbery
> The assertion that taxation is legalized theft enforced through the threat of force is a popular one in certain circles, but it isn't the self-evident fact you believe it to be, either.
What other collection of individuals claims this privilege but the state? (see what I did there ;-) )
Seriously though: if I get a band of guys together and point a gun at you and force you to hand over 25% of your income to us, wouldn't that be illegal? But if I wear a badge and the band of guys is the enforcement arm of the IRS, that's any different?
A more complete analysis: https://mises.org/library/taxation-robbery
And there we have it. A mises.org citation.
Good luck finding a country that doesn't engage in taxation. You won't find one with a functioning government, or utilities, or roads, or a military. Keep on with the "taxation is violence" meme. I'm sure that'll get you far.
Good luck finding a country that doesn't engage in taxation. You won't find one with a functioning government, or utilities, or roads, or a military. Keep on with the "taxation is violence" meme. I'm sure that'll get you far.
Yeah don't worry about challenging any of my ideas in actual intellectual debate. That'll get you far.
If you look at income distribution its a hockey stick - you really have to slap yourself on the face and realise there is no middle class - what you thought of as professional-middle-class-contributor is actually college-debt-burdened-lower-class - no matter how many years they work they will never pay off their debt, let alone own their own home.
People aren't asking for "income equality" they are asking for some level of humanity and democracy to be restored to our version of Capitalism, to strengthen that capitalism.
So, just as "All Lives Matter" is not a good response to the "Black Lives Matter" movement, its not useful to discuss "income inequality is not intrinsically a bad thing" when we are in a time when the lower class are basically slaves and the middle class has been in steady decline - your _only_ chance to have security is to win a lottery [ the Startup or the PowerBall variety ]
So, what needs to be talked about is rather : how to take money out of politics, how to get poor people out of the ghetto, how to stop young black people from being shot by police on a weekly basis, how to bring back a reasonable level of tax on the super wealthy, and how to stop large companies from getting subsidies to pollute our environment.
A small amount of Socialism is needed urgently to bring Capitalism back into a survivable form - if not, I really think we are headed for bloody revolution, because most of the populace are angry, and its a rational anger because their survival needs are barely being met, in many cases.