The Return of the Super-Elite(jacobinmag.com)
jacobinmag.com
The Return of the Super-Elite
http://jacobinmag.com/2018/07/income-inequality-super-rich-economic-policy-institute/
94 comments
At this rate, we'll be left with no option but to go down your suggested path anyway.
The joke is that we are actively going down this path in the US.
We've been on that path since long before the advent of modern medicine. The rate of diabetes and diabetic complications is so ridiculously absurd among rural communities and among the poor precisely because those communities live in the old culture of "<shrug> he's sick, what can we do?".
Those communities embraced interventions like vaccines because they were easy, cheap (or more often than not free), and didn't require changes to lifestyle. Lifestyle interventions are the preferred mode of the bourgeoisie precisely because the poor are unable or outright unwilling to make those changes.[1]
The easy wins are over. Now we need to move the real mountains: hearts and minds of the larger population. This is a new fight. The regressions we see are a regression to the mean.
But don't forget about or underestimate real wins, like cigarette smoking. That's a radical cultural shift with a tremendous impact to public health and public finances, especially when you consider that through the 1980s and 1990s you saw the same conservative reactions (i.e. spiteful retrenchment) that you see these days wrt to today's social policies.
[1] Consider the flavored "tobacco" ban in SF. From a public health perspective there's very little to be gained. But the social elite were arguably more invested in that campaign than in earlier campaigns to reduce actual tobacco use precisely because it's fundamentally a lifestyle issue. And the irony that the elite are for legalizing marijuana but increasingly restricting vaping... don't get me started. I don't want to equivocate the poisonousness fatalism of the right with the zealousness of the left, but it's important to try to keep an objective perspective. Public health is a marathon. And if we let the perfect be the enemy of the better we'll all lose.
Those communities embraced interventions like vaccines because they were easy, cheap (or more often than not free), and didn't require changes to lifestyle. Lifestyle interventions are the preferred mode of the bourgeoisie precisely because the poor are unable or outright unwilling to make those changes.[1]
The easy wins are over. Now we need to move the real mountains: hearts and minds of the larger population. This is a new fight. The regressions we see are a regression to the mean.
But don't forget about or underestimate real wins, like cigarette smoking. That's a radical cultural shift with a tremendous impact to public health and public finances, especially when you consider that through the 1980s and 1990s you saw the same conservative reactions (i.e. spiteful retrenchment) that you see these days wrt to today's social policies.
[1] Consider the flavored "tobacco" ban in SF. From a public health perspective there's very little to be gained. But the social elite were arguably more invested in that campaign than in earlier campaigns to reduce actual tobacco use precisely because it's fundamentally a lifestyle issue. And the irony that the elite are for legalizing marijuana but increasingly restricting vaping... don't get me started. I don't want to equivocate the poisonousness fatalism of the right with the zealousness of the left, but it's important to try to keep an objective perspective. Public health is a marathon. And if we let the perfect be the enemy of the better we'll all lose.
To paraphrase Keyser Söze
"The greatest trick the Super-Elite ever pulled was convincing the world that inequality is a desired outcome of a properly functioning economy".
"The greatest trick the Super-Elite ever pulled was convincing the world that inequality is a desired outcome of a properly functioning economy".
Inequality of outcomes is a requirement for incentives to improve. Correlated variance in income in return for variance in production is just. Generally, prices provide information about where more production is required, though at the cost of obscuring how that production was obtained.
What we quibble about is (a) the distribution of the income function relative to the individual's production, and (b) how much income gets distributed on the basis of mere ownership, rather than production.
The super-elite benefit much more from (b) than from (a). Mobility of capital means (b) is generally under-taxed.
What we quibble about is (a) the distribution of the income function relative to the individual's production, and (b) how much income gets distributed on the basis of mere ownership, rather than production.
The super-elite benefit much more from (b) than from (a). Mobility of capital means (b) is generally under-taxed.
The tricky part is, of course, that legitimate economic efficiency arguments can be made for allowing the highly productive to bequest their incomes to beneficiaries who are mere owners (to encourage the originators of the wealth to continue to be productive). But in practice, that leads to concentration of resources in the hands of people who are not necessarily as productive as their predecessors
The other confounding factor is that "production" itself in dollar terms is not some immutable variable, but the price-system reflecting the aggregate desires of all those people holding resources. As ownership of resources becomes more concentrated, the measure of income from production becomes less an ability to meet the needs of wider society through effort and skill and more the ability to secure the patronage of a member of a diminishing number of superrich.
The relationship between the basic economic concepts of productive efficiency (viz. creating as much value as possible) and allocative efficiency (viz. ensuring resources are exchanged to permit everyone to obtain as much value as possible without someone else having to subsidise it) therefore exists in tension.
The other confounding factor is that "production" itself in dollar terms is not some immutable variable, but the price-system reflecting the aggregate desires of all those people holding resources. As ownership of resources becomes more concentrated, the measure of income from production becomes less an ability to meet the needs of wider society through effort and skill and more the ability to secure the patronage of a member of a diminishing number of superrich.
The relationship between the basic economic concepts of productive efficiency (viz. creating as much value as possible) and allocative efficiency (viz. ensuring resources are exchanged to permit everyone to obtain as much value as possible without someone else having to subsidise it) therefore exists in tension.
Agreed that we need variance on the overall distribution of incomes to produce incentives to more efficiently produce goods, but not necessarily the bimodal distribution that's forming now. Not really disagreeing with you: I agree that we do not tax ownership-based income enough.
You can have inequality of outcome with a much higher floor than what we have today. Social benefits are not an attempt to smooth things out, it’s scraping the excess from the very top to raise the bottom up to a dignified existence.
>Inequality of outcomes is a requirement for incentives to improve.
What proof do you use?
What proof do you use?
I claim this is self-evident. What counterproof do you propose?
To be fair, it's not completely self evident in the sense that monetary inequality is the only incentive to improve. There are other kinds of inequality. Social status, for instance, rewards improvement, although it's very different.
If it were self-evident, it would not need to be stated.
Imagine the game monopoly. Then, imagine a house rule that says all players receive $300 at the start of each turn.
Imagine the game monopoly. Then, imagine a house rule that says all players receive $300 at the start of each turn.
That's not the only source of income in Monopoly though.
Yes, but the incentives improved equally.
Are you unironically claiming that having an inequality of economic outcomes is the only way to motivate/incentivise human behaviour?
No, "inequality of outcomes" . If you are motivated by status, then inequality of status outcomes. If you are motivated by helping your siblings, then inequality of your siblings' well being. If you are motivated by glitter, then just how much glitter you get. Money is but one dimension... I am saying it is self-evident that there must be some non-trivial gradient in at least one direction.
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"Inequality of outcomes" is essentially what we don't have. These days, as capital has become even more important, your likely outcome is relatively easy to calculate. In many major cities today it is almost better to be wealthy and unemployed, than successful and wealthless. This state of things is somewhat expected of Europe, but lesser so of the US, or at least not of Americans.
Or we could give up the illusion that individual production is easily measurable, especially where it comes to highly collaborative / creative industries. (See: any number of debates on "10x" engineers, C-suite compensation, how much managers vs. their reports ought to get paid, etc. - and that leaves out discussions of more "team-oriented" cultures where success is thought of as a collective endeavor.)
Good one! Let me try another angle: the greatest trick is to cover up the simple fact that the redistribution of wealth is arbitrary. We could agree that the owners of German Shepherd dogs do not pay VAT on Thursdays if they have a green hat on. Royals and the like were convincing people for who knows how many millennia that their status and power is from god. In a way we have the same with current tax laws, we all think they come from "somewhere", whether it's a necessity or logic, experience or a textbook. The search space is much larger than what we make use of.
That's what I am telling people all the time. The "economy" is not a natural law but it's completely man made and can be adjusted to whatever goals a society wants to achieve. Obviously there are some constraints but there are a lot of parameters that can be tweaked. The owner class has convinced us that shareholders and property rights are the most important players but there is no reason why this can't be balanced with other things like workers rights, health care or retirement systems for all.
Also, it's not just the "redistribution" of wealth that has some "clear former owner", but also how people divide "new" value that is created on-the-fly.
Consider a company that mines for gold -- how much of that new value is split between the people who own the land, the people who dig the ore, the people who process the ore, the people who lent some money long ago, etc.
Consider a company that mines for gold -- how much of that new value is split between the people who own the land, the people who dig the ore, the people who process the ore, the people who lent some money long ago, etc.
I would think that the more straightforward paraphrase is even better:
"The greatest trick the Super-Elite ever pulled was convincing the world that they didn't exist."
I doubt you'd find many people who actually agree that inequality is a desired outcome of a properly functioning economy (even if it's true). However, the Super-Elite have been remarkably successful at disappearing into the background and making the world forget about them. Look at the headlines today: they're about ICE & undocumented immigrants, or Nazis in Charlottesville, or Russian interference, or antifa protesters. You see very few news stories about private jet vacations or the real-estate holdings of the super-wealthy.
"The greatest trick the Super-Elite ever pulled was convincing the world that they didn't exist."
I doubt you'd find many people who actually agree that inequality is a desired outcome of a properly functioning economy (even if it's true). However, the Super-Elite have been remarkably successful at disappearing into the background and making the world forget about them. Look at the headlines today: they're about ICE & undocumented immigrants, or Nazis in Charlottesville, or Russian interference, or antifa protesters. You see very few news stories about private jet vacations or the real-estate holdings of the super-wealthy.
> I doubt you'd find many people who actually agree that inequality is a desired outcome of a properly functioning economy (even if it's true).
I don't agree (with your statement). I mean, I don't think most people actively begrudge people having a better situation than them - just like they don't sit around getting angry that Rachmaninoff is a better composer than them, or that Michael Jordan is a better basketball player. I think people do sometimes instinctively feel that one person having more wealth is somehow depriving them - but that's not universal, and only comes up in certain situations.
> "The greatest trick the Super-Elite ever pulled was convincing the world that they didn't exist."
> You see very few news stories about private jet vacations or the real-estate holdings of the super-wealthy.
Like, I don't think you're actually claiming that there's any conspiracy here of the super-elite, despite the wording. But I don't get your point. You think it takes active work to make it so that there are no news stories about the super elite? I mean, I don't expect the newspapers in poorer countries to be filled with stories about how much better everyone in America has it. I don't think it's because Americans did anything special - it just doesn't really interest people.
And again, I don't think everyone in Africa feels that the fact that most Americans are better off than them is necessarily so terrible. I think this sentiment tends to come up in certain situations (especially when explicitly talking about economic inequality), but not in general.
I don't agree (with your statement). I mean, I don't think most people actively begrudge people having a better situation than them - just like they don't sit around getting angry that Rachmaninoff is a better composer than them, or that Michael Jordan is a better basketball player. I think people do sometimes instinctively feel that one person having more wealth is somehow depriving them - but that's not universal, and only comes up in certain situations.
> "The greatest trick the Super-Elite ever pulled was convincing the world that they didn't exist."
> You see very few news stories about private jet vacations or the real-estate holdings of the super-wealthy.
Like, I don't think you're actually claiming that there's any conspiracy here of the super-elite, despite the wording. But I don't get your point. You think it takes active work to make it so that there are no news stories about the super elite? I mean, I don't expect the newspapers in poorer countries to be filled with stories about how much better everyone in America has it. I don't think it's because Americans did anything special - it just doesn't really interest people.
And again, I don't think everyone in Africa feels that the fact that most Americans are better off than them is necessarily so terrible. I think this sentiment tends to come up in certain situations (especially when explicitly talking about economic inequality), but not in general.
I agree. The super wealthy prefer seclusion but it is hard to hide a 10 bedroom mansion and a superyacht. It is better to provide a strong "foxnews education" so there is no need to hide.
Honestly, I wonder if a symbolic model would work better for our society. Ask the rich to set aside 20% of their wealth to provide low interest rate (~1% to 2%) loans to the poor to be used specifically on self-improvement (housing, infrastructure, education, policing, healthcare, childcare, etc). The loans start small and increase with good payment history.
Honestly, I wonder if a symbolic model would work better for our society. Ask the rich to set aside 20% of their wealth to provide low interest rate (~1% to 2%) loans to the poor to be used specifically on self-improvement (housing, infrastructure, education, policing, healthcare, childcare, etc). The loans start small and increase with good payment history.
>Ask the rich to set aside 20% of their wealth to provide low interest rate (~1% to 2%) loans to the poor to be used specifically on self-improvement (housing, infrastructure, education, policing, healthcare, childcare, etc). The loans start small and increase with good payment history.
What you're suggesting would create more wealth for the elite. It's a loan, so they retain the same amount of money (since it's a loan, the assumption is that it's paid back), while gaining more money in interest.
I am lower end of the spectrum when it comes to my wealth, and I probably can't even claim any sort of middle class "label" in the USA. I avoid debt (because I can't afford to pay it back) and wouldn't even consider something like this.
What you're suggesting would create more wealth for the elite. It's a loan, so they retain the same amount of money (since it's a loan, the assumption is that it's paid back), while gaining more money in interest.
I am lower end of the spectrum when it comes to my wealth, and I probably can't even claim any sort of middle class "label" in the USA. I avoid debt (because I can't afford to pay it back) and wouldn't even consider something like this.
It would not. That interest rate doesn't even cover inflation, let alone the significant occurrence of default that you would see when using 'low income', with its high correlation to 'credit risk', as your criteria for lending.
If the interest rate in the loan was pegged to track inflation, it should be roughly zero-practical-gain.
But it's still clunky.
There's no reason we can't say "people earning more than a few million dollars a year can afford to pay a 97% tax rate."
We just need to have it wired together into a comprehensive plan. Hold passports if you have outstanding tax debt. Orchestrate "regime change" in Carribean tax shelters and Luxembourg instead of the Middle East for a change.
But it's still clunky.
There's no reason we can't say "people earning more than a few million dollars a year can afford to pay a 97% tax rate."
We just need to have it wired together into a comprehensive plan. Hold passports if you have outstanding tax debt. Orchestrate "regime change" in Carribean tax shelters and Luxembourg instead of the Middle East for a change.
> There's no reason we can't say "people earning more than a few million dollars a year can afford to pay a 97% tax rate."
Sure there is. They won't bother creating any value if their marginal take is effectively zero. How hard would you work if someone said you couldn't take home more than $10K?
Sure there is. They won't bother creating any value if their marginal take is effectively zero. How hard would you work if someone said you couldn't take home more than $10K?
The idea that people who 'create value' are motivated by money does not stand scrutiny. The bulk of major discoveries have been by people motivated by curiosity, some so obsessed not even caring about their own lives, so its unlikely money was the motivating factor.
The open source movement has probably created hundreds of billions of dollars of value, yet it is not motivated by money.
And value is not created by individuals, you need an entire society with infrastructure, education, teachers, technology, stability, science, funding, wealth, markets to create value.
The open source movement has probably created hundreds of billions of dollars of value, yet it is not motivated by money.
And value is not created by individuals, you need an entire society with infrastructure, education, teachers, technology, stability, science, funding, wealth, markets to create value.
Ideally there would be tax brackets so people making $150,000/year aren't taking home poverty wages, but people making $1,000,000,000/year are taking home maybe a couple tens of millions, which is still perfectly comfortable to live on for an entire lifetime.
I think you're missing his point. Say your hypothetical person is making $10,000,000/year already. He has the opportunity to work 40% harder to 10x his income up to $100M/year. However, at this point, his marginal tax rate under your scheme is already 97%, which means that on that extra $90M in theoretical income, he will only take home an extra $2.7M. Now, it's not worth it for him to make that extra effort, to only increase his realized income by 27%.
The next question is: Why should you, someone presumably not making $10m/year, care? We care because when someone increases their earnings from $10M to $100M, in theory, they are doing so by creating value for society. In fact the people at the highest ends of the income distribution should be the ones creating the most value. So we really do want them to be incentivized to earn more. To ensure that they are, we need a top marginal rate that strikes a balance between unnecessary super wealth, and incentivizing the value creation that drives the tremendous prosperity of the modern economy. This is a delicate balancing act, to be sure. But it is extremely important to understand that it is a balancing act.
The next question is: Why should you, someone presumably not making $10m/year, care? We care because when someone increases their earnings from $10M to $100M, in theory, they are doing so by creating value for society. In fact the people at the highest ends of the income distribution should be the ones creating the most value. So we really do want them to be incentivized to earn more. To ensure that they are, we need a top marginal rate that strikes a balance between unnecessary super wealth, and incentivizing the value creation that drives the tremendous prosperity of the modern economy. This is a delicate balancing act, to be sure. But it is extremely important to understand that it is a balancing act.
The standard answer would be that if someone already making $10m/year considers increasing their work ethic by 40%, they are almost certainly doing so for reasons other than need more spendable cash...
First of all, that's pretty clearly not actually true, if you bother to think about it. And secondly, even if it were true, I don't see how it's relevant.
If you're already earning far more than you are ever likely to consume and considering putting in 40% extra workload, as the person in your example is doing, you are almost certainly doing so because you deeply believe in a mission or hypothesis, because you want to beat someone to something or because you like the status of being the person to transform the fortunes of $company or found $newcompany, not because you have the instrumental objective of receiving a set percentage of the target $100m pa profit in your personal bank account. If the money's more for keeping score, gross earnings do the trick. You might even struggle to see how the tax rate on your personal income stream is relevant.
Work incentives look very different at the extreme ends of the income spectrum (as does the relationship between work ethic and earnings). Someone considering putting in 40% extra workload because their lifestyle is insufficient on $10m a year[1], would be fairly unusual, even for a multimillionaire.
It's much lower down the income scale where people work to fulfil their [future] consumption needs rather than despite having already met them that the work disincentive effects of higher taxes kick in.
There are other arguments against high super taxes like how easily they're circumvented and how they deter millionaires from parking their money in a particular country in an era of high capital mobility, and in some cases how they dilute efficient owner control, but the idea that the likes of Buffet, Gates and Bezos or even mere movie stars would have lost interest in working hard if their resulting disposable income stream were to be reduced by a [punitively] high tax rate is a little difficult to credit.
[1]there's even less you can't buy on $10m a year when overpriced luxuries for conspicuous consumers are depressed by high income tax on the superrich...
Work incentives look very different at the extreme ends of the income spectrum (as does the relationship between work ethic and earnings). Someone considering putting in 40% extra workload because their lifestyle is insufficient on $10m a year[1], would be fairly unusual, even for a multimillionaire.
It's much lower down the income scale where people work to fulfil their [future] consumption needs rather than despite having already met them that the work disincentive effects of higher taxes kick in.
There are other arguments against high super taxes like how easily they're circumvented and how they deter millionaires from parking their money in a particular country in an era of high capital mobility, and in some cases how they dilute efficient owner control, but the idea that the likes of Buffet, Gates and Bezos or even mere movie stars would have lost interest in working hard if their resulting disposable income stream were to be reduced by a [punitively] high tax rate is a little difficult to credit.
[1]there's even less you can't buy on $10m a year when overpriced luxuries for conspicuous consumers are depressed by high income tax on the superrich...
> If you're already earning far more than you are ever likely to consume and considering putting in 40% extra workload, as the person in your example is doing, you are almost certainly doing so because you deeply believe in a mission or hypothesis, because you want to beat someone to something or because you like the status of being the person to transform the fortunes of $company or found $newcompany, not because you have the instrumental objective of receiving 100% of the target $100m pa profit in your personal bank account.
That's a nice story, but is it true? If you believe that, then you'd have to believe that all of those people would work for free. If they really valued their missions above their own marginal incomes, then they'd simply plow 100% of what they would have been paid back into achieving that mission.
No doubt, there are people like this. I know some of them. But they are definitely the exception, rather than the rule. Most people are motivated by a mixture of things, but money is an essential ingredient in that mixture.
That's a nice story, but is it true? If you believe that, then you'd have to believe that all of those people would work for free. If they really valued their missions above their own marginal incomes, then they'd simply plow 100% of what they would have been paid back into achieving that mission.
No doubt, there are people like this. I know some of them. But they are definitely the exception, rather than the rule. Most people are motivated by a mixture of things, but money is an essential ingredient in that mixture.
You don't 10x by working harder. You do other things but likely not work.
That's pretty empirically false.
Empirical with what data? The rich people I know get there not through working harder, but through making better decisions than ordinary people, in particular in figuring out what to work on. You certainly can't just work 10x harder to go from making $1M - $10M - you have to do qualitatively different stuff. Similarly in going from $10M - $100M.
Of course. Subsumed in working harder is making an effort to work smarter, taking larger risks, etc.
I suspect it wouldn't be as simple as that. The elites have many ways to make their earnings appear as zero on paper, or in fact don't have any earnings.
>There's no reason we can't say "people earning more than a few million dollars a year can afford to pay a 97% tax rate."
We have people "fox news" deluded into thinking the elite deserve all of it -- hundreds of lifetimes worth of money -- because all of their hard work went into making it (their workers made it), while their own wealth and security declines at the same time. In 1944 we had a tax rate of 94% on people earning over what in today's money would be $2.8 million [1], and it was the beginning of some of the lowest income inequality in USA's history [2].
Jeff Bezos would still be left with $9,000,000,000 on a 94% tax rate (I realize most of his net worth is stock, I have a hard time finding what it is without his stock, this is just an example).
I would love to see it too, but people continuously vote against their own interests.
[1] https://www.tax-brackets.org/federaltaxtable/1944
[2] https://www.epi.org/news/union-membership-declines-inequalit... (unions + income tax)
We have people "fox news" deluded into thinking the elite deserve all of it -- hundreds of lifetimes worth of money -- because all of their hard work went into making it (their workers made it), while their own wealth and security declines at the same time. In 1944 we had a tax rate of 94% on people earning over what in today's money would be $2.8 million [1], and it was the beginning of some of the lowest income inequality in USA's history [2].
Jeff Bezos would still be left with $9,000,000,000 on a 94% tax rate (I realize most of his net worth is stock, I have a hard time finding what it is without his stock, this is just an example).
I would love to see it too, but people continuously vote against their own interests.
[1] https://www.tax-brackets.org/federaltaxtable/1944
[2] https://www.epi.org/news/union-membership-declines-inequalit... (unions + income tax)
> Ask the rich to set aside 20% of their wealth to provide low interest rate (~1% to 2%) loans...
Instead of or in addition to taxes?
Instead of or in addition to taxes?
Forget UBIs and other bandaids. Just simply taxing their wealth away would transform society. Plutocratic governence won't end until there are no more plutocrats.
This is why I object to the "who cares about inequality if all boats are rising" argument. Massive disparities of wealth lead to massive disparities of political power and a government which serves the interests of plutocrats above all other concerns.
And yet populism is soundly defeating the global business community for votes.
Unless all developed countries organize to tax wealthy people, why would wealthy people invest in countries that tax their wealth away?
If countries don't play ball with rich people, they can just move to another country that is more "business friendly" (including low taxes). What am I missing?
If countries don't play ball with rich people, they can just move to another country that is more "business friendly" (including low taxes). What am I missing?
You are missing the fact that tax is not the only factor for people to stay. California is an expensive state by most measures but somehow it doesn't seem to have a problem keeping rich people in state.
California has high taxes and great universities. This is why I'm quite perplexed that, even though many in my country state that they want to copy California's success, they are trying to do so by (among other things) lowering taxes and ruining our universities.
https://www.forbes.com/sites/patrickgleason/2018/07/06/milli...
Not the only ones either: https://www.cnbc.com/2018/03/19/californians-fed-up-with-hou...
Not saying it's a 100% exodus, but I'd definitely not call it "no problem".
Not the only ones either: https://www.cnbc.com/2018/03/19/californians-fed-up-with-hou...
Not saying it's a 100% exodus, but I'd definitely not call it "no problem".
How many big corps are incorporated in California? How many rich people control their wealth via some Cayman islands subsidiaries, etc?
Having a nice $30M home in California is likely a small expense for the ultra-rich the article talk about.
Having a nice $30M home in California is likely a small expense for the ultra-rich the article talk about.
Are you saying California is not a state with a lot of people having well-paid jobs and a lot of wealthy people? Would the state do better if it decided to lower taxes for the wealthy?
The people can move, but the assets can't really.
If Amazon or Apple sets up shop in some"friendly" jurisdiction that's underwater at high tide, most of their operations and sales are still coming from other countries, and the taxman can intervene there. The inventory coming into the country; their offices; hell, even their patents/trademarks/copyrights could be captured by a state actually out for blood.
If Amazon or Apple sets up shop in some"friendly" jurisdiction that's underwater at high tide, most of their operations and sales are still coming from other countries, and the taxman can intervene there. The inventory coming into the country; their offices; hell, even their patents/trademarks/copyrights could be captured by a state actually out for blood.
My problem with this is simply that I feel that tax money is irresponsibly spent. Infra in the US is crumbling, we prop-up the profits of the same companies we are talking about taxing and defend them with the military that we pay for from the taxed wages of the people who work for said entities...
Its a pretty bad loop of corruption and inefficiencies.
I'd love to see a true accounting of how money is taxed, allocated spent and wasted.
Just because something is "taxed" doesnt mean that the funds are used correctly - look at the Lotto, gas taxes and the recycling tax fund which was looted.
Its a pretty bad loop of corruption and inefficiencies.
I'd love to see a true accounting of how money is taxed, allocated spent and wasted.
Just because something is "taxed" doesnt mean that the funds are used correctly - look at the Lotto, gas taxes and the recycling tax fund which was looted.
Agreed. However, how do you make them tax themselves? The super-elite control politics and government, so why would they tax themselves more? How do you create the proper incentives for that to happen?
They'll never agree to it; we just have to outnumber them and outvote them.
Our government is actually set up, quite intentionally, to avoid making this possible. It's one of the core purposes of a republic. You can go back and read Plato discussing the exact idea that democracy is dangerous because the poor will vote to rob the rich.
It's a fact that the US constitution is garbage.
And that is where the true brilliance of the Culture War comes in... we're going to have to ride this train until the last stop while all the passengers are arguing about kneeling NFL players or something.
Yes, it'd be just as transformative as it was in Cuba and Venezuela.
I'm not sure that it is possible to analyze this, but I'd like to see a breakdown of the >$10 million net worth range based on whether it was earned in America or not. You can change the American tax code all you want, but if it is only being used as a storage system (due to a good track record of stability and maintenance of property rights) then I'm not sure it will have much of an effect. For example, I think Venezuela was basically looted over the past few years, and I'm sure a lot of that money went into i.e. Florida real estate. I wouldn't credit any study of the super rich that is only looking at one country.
An as far as using post-WW2 as an example, I'd like to see an example of a way to reduce inequality that doesn't involve killing millions and destroying Europe.
An as far as using post-WW2 as an example, I'd like to see an example of a way to reduce inequality that doesn't involve killing millions and destroying Europe.
This article should mention a lot of other factors that are important, including changes in technology, automation, globalization, etc. It's too short-sighted to simply say that the problem America faces is as simple as a small group of people or laws, that if removed, suddenly would fix society's ills. There are many other factors in play that should not be neglected.
Why is it short-sighted to say if inequality or laws that cause inequality are removed, then societal ills will be fixed?
If we can make laws that cause ills then we can remove those laws and their ills.
If we can make laws that cause ills then we can remove those laws and their ills.
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Extreme solution: wealth caps. Outlaw billionaires.
Eat cake
This downvoted comment is exactly what I expected, because as much as we have changed and advanced as a people, with all the events since the French revolution, humanity will continue to struggle against oppression.
I don’t think policy can fix this. The only peaceful solution I can imagine is a general rebellion against the use of money to organize our economy. If you are reading this you are a prime candidate to implement alternatives. Hint: bitcoin isn’t it.
How about re-implementing unions in mass? When union membership rises, inequality declines [1].
[1] https://www.epi.org/news/union-membership-declines-inequalit...
[1] https://www.epi.org/news/union-membership-declines-inequalit...
But unions are also making business less efficient, so eventually it will be surpassed by an another business, so business will move to country with cheaper labor or will die.
The US is one of the world's largest and most lucrative markets. If these foreign companies want to do business with the US they could be required to allow unions and adopt labor protections at least as stringent as those in the US. Another thing that could be done is to tax companies that want to move their assets or businesses abroad. Do both of these and much of the incentive to move businesses abroad vanishes.
In addition to that pressure, the largely pro-union and pro-labor EU could probably be easily enlisted to adopt a similar policy, thereby locking out offending companies both out of the US and EU markets.
Further, take a look at what happened to the ultra-secretive Swiss banks, which for hundreds of years have held the privacy of their clients sacred, even against the prying eyes of the IRS. The US exerted its influence, and now there's a lot more transparency in even the formerly-secret Swiss banking system. Many of the recent revelations regarding the tax-evading super-rich and what assets they have hidden where have been a result of such increased transparency in the global banking system.
US influence extends far, far past that. If the US decided to become pro-union and then hold the feet of other countries and companies to the fire were they to be anti-union or anti-labor, they could make a huge difference. It certainly won't happen in the current political climate, but it could be done.
In addition to that pressure, the largely pro-union and pro-labor EU could probably be easily enlisted to adopt a similar policy, thereby locking out offending companies both out of the US and EU markets.
Further, take a look at what happened to the ultra-secretive Swiss banks, which for hundreds of years have held the privacy of their clients sacred, even against the prying eyes of the IRS. The US exerted its influence, and now there's a lot more transparency in even the formerly-secret Swiss banking system. Many of the recent revelations regarding the tax-evading super-rich and what assets they have hidden where have been a result of such increased transparency in the global banking system.
US influence extends far, far past that. If the US decided to become pro-union and then hold the feet of other countries and companies to the fire were they to be anti-union or anti-labor, they could make a huge difference. It certainly won't happen in the current political climate, but it could be done.
Not necessarily, if the business is a local monopoly, or if the use of unionized labor is enforced by law.
The example of the former are dockers in many US ports (you usually can't easily build another port next to existing one), and of the latter, construction businesses in some US cities, like NYC.
The example of the former are dockers in many US ports (you usually can't easily build another port next to existing one), and of the latter, construction businesses in some US cities, like NYC.
If the business is mainly run by the unionized workers, I don't think the workers would willingly move their own jobs out of the country.
Why don't workers start their own worker-owned and unionised companies if they want to?
They do, but it's not as easy as you make it out to be. There are plenty of co-ops in this country, but they're typically local small chains.
I think the problem is that powerful tech companies aren't started by committee of union stewards - it's down to a couple of motivated people with talent and a good idea.
And a huge dollop of VC money to make sure everything still stays within the network of existing Capital Owners, no matter how “disruptive” these businesses position themselves as
The elimination of money would be one of the most disruptive events in the history of humanity. It's likely that many millions if not billions of people would die in the ensuing turmoil and our society as we know it today would cease to exist.
Consider just two critical aspects of our society that require money to run smoothly and efficiently: modern medicine and industrial agriculture. Billions of people depend on them to survive, and the reason people participate in them as they do is mostly for money.
If you replace money with, say, barter, how many sheep or goats are you going to pay for a modern hospital or for a pharmaceutical factory, or the network of roads and airports needed to deliver food and other goods? How are you going to transport all those sheep and goats throughout our ever more interconnected world? At the very least, the infrastructure is just not there for us to switch to barter anywhere in the foreseable future.
Even if we could/did switch, all sorts of new power structures would likely arise and overthrow existing ones, and it's far from guaranteed that the transition will be bloodless. More likely, a lot of people would oppose it and it's not inconceivable that wars could be started over it -- especially as the change would probably not happen globally at once, but some countries would convert to barter first while others will still have money, leading to power imbalances, migration of money and the people who have it, massively influencing the economies, societies, and politics of the countries involved.
If the switch from money is not to barter, then to what? It's good to think about these things, and it's critical that our world change from the destructive course it's on now, but I for one don't see a way to extract money out of the equation without massive suffering.
My own slim hope rests on consciousness change, perhaps through education, increased communication, and maybe even psychedelics. The psychedelic renaissance has begun, and these substances are one of the most effective means of attaining radical changes in perspective and increasing creativity. Perhaps through them some solution that's not yet evident could arise, and if enough people change their mind maybe we could change our society towards a more positive and inclusive model.
Consider just two critical aspects of our society that require money to run smoothly and efficiently: modern medicine and industrial agriculture. Billions of people depend on them to survive, and the reason people participate in them as they do is mostly for money.
If you replace money with, say, barter, how many sheep or goats are you going to pay for a modern hospital or for a pharmaceutical factory, or the network of roads and airports needed to deliver food and other goods? How are you going to transport all those sheep and goats throughout our ever more interconnected world? At the very least, the infrastructure is just not there for us to switch to barter anywhere in the foreseable future.
Even if we could/did switch, all sorts of new power structures would likely arise and overthrow existing ones, and it's far from guaranteed that the transition will be bloodless. More likely, a lot of people would oppose it and it's not inconceivable that wars could be started over it -- especially as the change would probably not happen globally at once, but some countries would convert to barter first while others will still have money, leading to power imbalances, migration of money and the people who have it, massively influencing the economies, societies, and politics of the countries involved.
If the switch from money is not to barter, then to what? It's good to think about these things, and it's critical that our world change from the destructive course it's on now, but I for one don't see a way to extract money out of the equation without massive suffering.
My own slim hope rests on consciousness change, perhaps through education, increased communication, and maybe even psychedelics. The psychedelic renaissance has begun, and these substances are one of the most effective means of attaining radical changes in perspective and increasing creativity. Perhaps through them some solution that's not yet evident could arise, and if enough people change their mind maybe we could change our society towards a more positive and inclusive model.
Barter has never been how economies were organized, except under duress like a prison camp. If you are interested in the topic I suggest David Graeber’s Debt: The First 5000 Years. The takeaway- relationships and reputation among groups of people who know each other have organized economies far longer than money has. IMHO social media should allow us to act like a global village, and villages don’t need money to coordinate.
pfft psychedelics have existed throughout history all around the planet. If and when it has had impact, it's mostly been indirect or accidental. There is a paper somewhere out there from the 70's, which tried to estimate how many important historical figures were using something or the other, and after looking at a few thousand their best guess was under 3%. I think. Can't remember the numbers clearly.
The current circus show will return to some balanced "normality" once the media/social medias bullshit reinforcement mechanism namely the likes/upvotes/views/retweets/clicks/ratings is regulated. This mass overloading of people's minds with information they will never be fully trained to handle will break down soon enough. You can see that breakdown happening all over the place. People are still in denial that celebs like Obama and Trump were propped up by the same mechanism. Not dismantling that mechanism will keep propping up more and more bizarre and inept celebs with best pandering abilities in various power heirarchies not just politics. There are clowns in the army and judiciary who are playing the same game Trump and Obama play.
Removing/delaying/temporarily hiding the reinforcement of people superficial beliefs is the only way sanity returns.
The current circus show will return to some balanced "normality" once the media/social medias bullshit reinforcement mechanism namely the likes/upvotes/views/retweets/clicks/ratings is regulated. This mass overloading of people's minds with information they will never be fully trained to handle will break down soon enough. You can see that breakdown happening all over the place. People are still in denial that celebs like Obama and Trump were propped up by the same mechanism. Not dismantling that mechanism will keep propping up more and more bizarre and inept celebs with best pandering abilities in various power heirarchies not just politics. There are clowns in the army and judiciary who are playing the same game Trump and Obama play.
Removing/delaying/temporarily hiding the reinforcement of people superficial beliefs is the only way sanity returns.
Money seems like an extremely good coordination mechanism to me. Name something that can perform the purpose of money that is not more coercive and less efficient than money.
Money’s problem is its commodity nature. It obscures the supply chain and puts unjust gains on the same footing as useful work. A replacement would make supply chains transparent and make relationships and reputation primary.
I have a pet project along these lines but I’d like to hear other ideas: https://www.wired.com/2014/07/document-coin
I have a pet project along these lines but I’d like to hear other ideas: https://www.wired.com/2014/07/document-coin
I wonder how do you separate "unjust gains" from "just".
Criminal proceeds can be detected and reverted by criminal courts.
Criminal proceeds can be detected and reverted by criminal courts.
If you don’t convert value to a commodity form, but instead trade in representations of the original work, then just and unjust can be in the eye of the beholder. With commodity currency, distant parties never have a chance to know.
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Central Planning as a Service?
must be ERC20 tokens then? /s
Once you have enough wealth to control the media, you've "made it". You could say that people like Putin have accomplished that. So it's not that rich people want more money because it allows them to consume more. I assume it is because more wealth allows them to control other people.
A spectre is haunting...
We have a minimum wage to prevent absurd exploitation, I see no reason to nit have a sane maximum wage (and networth)
Sounds like an invitation to shell games and shell companies. And exodus to more tax-friendly jurisdictions. Source: I used to be a tax lawyer.
Even if this weren’t the case, people would be disincentived from working hard jobs if there were a maximum wage.
Even if this weren’t the case, people would be disincentived from working hard jobs if there were a maximum wage.
> Sommelier and Price found that so far during the recovery from the Great Recession, the American top 1 percent has captured nearly 42 percent of all income growth.
Is that surprising? The people that created the recession also benefited the most from it at the expense of everyone else. It wouldn't surprise me if the recession was created on purpose for this exact reason. Regardless, we know the solution (high taxes especially corporate taxes and regulation) that can reverse this trend peacefully. We unfortunately also know the solution that can reverse this trend violently. At this point, it's just a matter of waiting and seeing which solution the US will pick. I have my non US passport ready to go at a moment's notice. I'm pretty sure I know which solution the US prefers, the one the US has always preferred in its history: violence.
Is that surprising? The people that created the recession also benefited the most from it at the expense of everyone else. It wouldn't surprise me if the recession was created on purpose for this exact reason. Regardless, we know the solution (high taxes especially corporate taxes and regulation) that can reverse this trend peacefully. We unfortunately also know the solution that can reverse this trend violently. At this point, it's just a matter of waiting and seeing which solution the US will pick. I have my non US passport ready to go at a moment's notice. I'm pretty sure I know which solution the US prefers, the one the US has always preferred in its history: violence.
Say you want better healthcare. Do we really want to go down the rabbit hole of establishing metrics (infant mortality, obesity rates, whatever), having wonks work out policy, have bureaucrats turn the massive Ship of State towards that goal towards redistributing taxes and modifying lifestyles, spend years following up on all this? It's insane, people can't have democratic control over this, we can't expect them to put up with it.
Instead we can just vote in someone who'll us we'll be "beautifully covered", then we'll all get together frequently to listen to him tell us how great things are going, then we'll hype each other telling each other how great things are. Who you're gonna believe, some rando egghead on TV yammering about metrics, or your community? As long as we all believe, everything will be great. And your shitty health? Well, you did what you could. shrug