I think these discussions are immensely helpful. Mostly because they give us clear criteria for accepting and rejecting proposed solutions. Many people, for example, are for confiscatory taxes on the rich to level the playing field.
Your sentence here, for example, implies that the wealth concentrated in the hands of the tiny percantage of the population would relieve the millions who struggle if it were just redistributed. I don't believe the numbers back that up. As rich as Gates and Bezos are, they can't fund healthcare for everyone. Which is why redistributive tax schemes aren't about using the means of some to fund the needs of others as much as creating fairness (or at least the sense of one).
You are also mixing up margin and market clearing price. The market clearing price includes profit. Just because a product is profitable that doesn't mean there are any inefficiencies in the market. On the contrary the price a market will bear for a product prices in profit insofar as there is a lack of supply to meet demand. Market inefficiencies come about due to illiquidity, regulation, abusive monopolies, etc, not simply because someone is making a profit.
You can't just imagine up a world where enterprises sell with zero margin -- in many cases the alternative is the products just simply wouldn't exist. This alternative reality is much worse for consumers.
I'm not saying the world needs 0 margins. If anything, that's contributing to the problem. Walmart and Amazon are good examples. Their cost structures have annihilatd entire, local economies.
My Sunday morning guess would be to look for ways to lower the entry costs for businesses. Maybe municipal level infrastructure for local consumers? I don't think "trust busting" would work in isolation. Over time, the markets probably re-concentrate.
How do you speak so confidently that they are "contributing to the problem?" It is a hard sell that they are abusing their market dominance, because of the very fact their margins are so thin. Since there are multiple market leaders, and their margins are thin, this implies they are competing fairly. You seem to take it as a given but it's a hugely complex question. I'm all for trust busting large companies abusing their power -- abuse which usually manifests in large margins.
OK. So if it's not about justice broadly but about economic liberty specifically, that's fine. Then the conversation is about which economic liberties are due and how much those would cost.
A popular one is "People shouldn't have to lose wealth or gain debt because of health problems". That's an admirable goal, but taking all the money from the top 1% won't result in free universal health insurance for long. That approach still seems like it's reaching for something else.
You seem to be making a more upstream argument, though. That U.S. (and Western?) markets are structured to favor the wealthy, limiting the power of markets to reward the poor and working class for good choices, hard work, and so on. That's a great point to consider, but what approach would create a level playing field?
Now, of course nobody is realistically suggesting taking all that money. That would be neither fair nor useful. Because everybody agrees that some reward is necessary to motivate people, and that they should get to enjoy the spoils.
Total spending at all levels of government in the US is almost $7 trillion. So even if you tax the top 5% at 75%, you’re covering 17% of total expenditures. European countries don’t build their welfare states by heavily taxing the rich. In say Germany, an entry level office worker will pay 30%+ of their income in taxes and mandatory insurance.
And that's assuming a 75% effective rate, which you can't get at the 95th percentile without also charging high effective rates to the majority of people because it's not possible to charge more than a 100% marginal rate on the difference.
Idk according to my swedish coworker, there was a marginal tax rate of 70-80%++ from like 1940-1985 or something.
Here is a hypothetical calculation of someone making $120k USD who is married with two kids: https://home.kpmg.com/xx/en/home/insights/2011/12/sweden-inc.... Such a person pays roughly 50% in total taxes. In the US it would be roughly 25% (in Maryland).
Maybe the federal government offers lower tax rates based on how many different states the company has a sizeable portion of its labor force. Ie near zero for being spread out everywhere.
It's not about whether they are rich but about whether they produce income that can be taxed to pay for the needs of the poor.
good luck with the taxes thing though.
Isn't that unfair?
I personally recommend that we start in small experimental grounds. The idea of starting in the Bay Area is good because engineers are pushing hard workers into poverty, but they they go around with masks hitting people on the head with sticks just because they speak their minds.
The unfair part is that the 250k income of the software engineer is increasing demand for housing until it's too expensive for the cleaner although the demand and therefore price are high enough to warrant more housing it's not getting build because of zoning laws.
You say that's fair, but someone else could say it is unfair. The supply/demand equation you describe suggests how the salaries get decided upon, but that's not the same thing as fair. That's the system we have, but that doesn't make it automatically fair.
I mean, why should someone jump into the 1% simply for being engineer #2? Those gains are unfair, and should be taxed 100% to pay for healthcare for all.
No, they aren't. The system is older than any person alive today. It's older than people. It's a natural law of the universe. It's game theory and natural selection, ultimately, that plays the fundamental role.
It isn't about rewards or even about what's fair. It's about the market. You pay an engineer a lot of money because you need an engineer to do the job and the supply of engineers is low. On the other hand, the supply of people who can clean bathrooms is effectively unlimited. There are far more people willing to do the job than there are jobs for them to do.
Because people are paid for the value of what they produce, not the effort they spend producing it.
As long as people are ok with their money going into a mystery box they have no control over, holding no one accountable, how can we have anything BUT inequality?
As long as companies are free to play tax games and suck money out of the economy and then hang on to it for as long as they feel like it - how can we have anything BUT a screwed up volatile economy?
People talk about redistributing money as if there's a million rich people wiping their butts with 100$ bills and if only we could teleport that money outta their toilets, into the hands of those in need, we'd solve something.
Real solutions to real problems come with infrastructure, accountability, transparency.
They start in the mind, then go out into the real world. As long as in your mind it's republican vs democrat, rich vs poor or some other childish false dichotomy, we'll be right where we are, heading for serious social unrest.
As long as all their competitors are subject to the same tax, the price simply rises. This is why Apple products cost much more in the EU. Of course, if it were cheaper for a company to be located somewhere where they would not be subject to that tax, then you're simply just motivating them to relocate.
I am referring to this: https://www.cnbc.com/2017/05/02/apples-cash-hoard-swells-to-...
Companies should not be allowed to simply hang on to 250 billion dollars.
Imagine what could be done in science, infrastructure, services etc if 10% of that money went towards those things.
There's a great Peter Thiel clip about this that sums it up very well:
Why? They earned it. And have you seen how much Apple donates to charities? Bill Gates at one point had a net worth of over 100 billion dollars before donating a huge sum to charity. If 250 billion is too much, what is a good amount?
Right, we're suggesting seizing the means of production. Don't redistribute, predistribute!
What do we do year two?
Many of the more egregious examples unequal wealth in current society typically stem from previous inequality of opportunity passed down through generations, so the pressure to correct the wealth imbalance and the inequality of opportunity gets mixed together.
What I think people mean by equality is that it should not be possible for an individual or group to obtain some overbearing degree of dominance over another individual or group. So that even if there is a disparity in wealth, there should still be a sense in which you are dealing with each other as equals.
I think this is the crux of the issue, and money most often is just the most relevant and quantifiable measure of that.
There's a positive aspect to this as well, though. My grandparents (coal miner and steel miller) made sacrifices and investments in order that my parents could be the first generation in their family to attend college and become school teachers. My parents made sacrifices and investments in order that my siblings and I could attain a better life than they had.
My wife and I are making sacrifices and investments to help our children attain their individual maximum potential and satisfaction in life. Instituting a giant red "perfect reset button" for each generation precludes the sensibility of those investments and I believe harms society overall.
Parents being good to their children is great. Parents sacrificing for their children is great. Keep doing it. But when what is given to child A comes at the expense of child B, then that is not so great.
As an individual, definitely please do focus on your children. But when we're talking about how we design society, we have to look at all the children.
My kids, by luck of birth, were born into a family that values education; we read to them every single night, do crafts, science, engineering things, and tend a garden at home. Why is it fair that they get those advantages?
In addition to being barred from passing along the money I don't spend in retirement, should I also be blocked from reading to my kids more than some community maximum; should our library or museum trips be capped? Should kids be blocked from getting grandma's wedding band just because it has an economic value?
I don't work and save/invest only for myself; I do so for my family, including those who will actuarially live longer than me.
http://www.nationalreview.com/article/417997/professor-if-yo...
Steady on, pal!
"Passed down through generations" makes it seem like there's some sort of grand lineage, and I haven't seen any data to back that up.
Are there? Where are they and how much influence do they have? As far as I can tell they are extremely rare and have little to no power. In contrast, the number of people who are market maximalists in actual positions of power is significant.
Interested to see any evidence that my world view is wrong.
The other turns that around and says no we don't because "structural racism/sexism/classism/etc".
So, they argue against each-other because one sees the current inequality of outcome as a consequence of some sort of "biased" fairness in opportunity. And since the other side disputes the existence of that bias, they think that what's being advocated is pure equality, irrespective of any distribution of skills/talents/etc.
It's an impasse, and we'll never get passed it until we start agreeing and quantifying the possibility that there are differences between sexes/races/cultures/ages. Only then can we correct for any supposed structural biases. It's a touchy topic, and one only need look at the type of controversy The Bell Curve book caused to understand the incredible difficulty that we face trying to conclusively resolve this scientifically.
If you look at history of mankind, you will see that at any stage the existing differences seemed insurmountable and later nevertheless changed. You can look anywhere from the Roman empire (i.e., essentially a fascist militaristic society for a long time), over women's rights, slavery, colonialization etc., it's always the same pattern. The status quo has never defined how a desirable society should look like. As a typical example, many women used to agree that it's pointless for them to vote, since they don't know anything about politics. Maybe these were even in the majority at some time. Nevertheless they've changed their mind.
To cut a long story short, history is full of alleged anthropological constants that were used to justify inequality and all of them turned out to be false and nonexistent. Heck, landowners used to say about peasants that they are just too stupid to own their own land and would immediately gamble it away...
Quite a lot, one was a presidential candidate complaining about the wage gap, which is an argument for total equality, not equal opportunity.
Someone made the choice to use the term "inequality" and it was remarkably clever because it has a builtin foil. When people object, proponents can say "well of course we don't mean no inequality at all." This is what weaponized rhetoric looks like.
There is a perception that a small group can apparently give themselves pay rises without being constrained by the same controls as others, thanks to the 'old boys' network.
I think this is a root problem.
Why not?
It does depend a lot on what's tolerable, admittedly. As long as we reason about it knowing that wether we like it or not, many of these people living in less than desirable circumstances will have kids and those kids have never done anything to effect wether or not their situation is tolerable.
Edit. Grammar.
If fair treatment from society (for the purpose of equal opportunity to wealth) results in unequal but 'consistently fair' wealth outcomes, then the explanation for the unwealthy individual's outcome must be disavowal of wealth "after being given the same chance everyone else had" Which implies that, since fair treatment failed to ensure the goal of wealth was as reasonable for them as anyone else, then the sole remaining factor is supposed individual disavowal - which tautologically represents an intolerable situation after all..
But the more general point is: do you value an individual solely by what they can produce?
Extreme example: Late at night, Mr.&Mrs. Miller get in a car accident and die. Their 5-years old daughter survives. She is not capable of sustaining herself with productive work. Is it fair for her to die?
Yes, it's extreme. In any sane world, someone would somehow take the girl in and provide for her until she's old enough.
But taking in an orphan and caring for them is already altruistic. Continue down that path, you'll soon stumble upon a social safety net that canonises these instincts. That's better than individual initiative because:
- it can distribute the costs of caring equally, instead of burdening, say, one family with all the costs of raising little Amy Smith
- it's fairer: your survival should not depend on you being cuter than someone else in need
- it's dependable: there's value in knowing your child will be cared for should you suddenly be hit by a bus
Progressives should want to avoid this having be part of the field of discussion. You don't want to get into a fight about what you really mean, particularly when there are so many who are eager to misrepresent progressive motivations precisely as the desire to try to make everyone equal in outcome. And this makes it trivial for political opposition to persuade people who value conscientiousness to be suspicious of progressive positions.
Just start with "fair deals" as the value.
Its perfectly possible to leave the rich with monetary wealth that they can show off to their friends about while the poor have material sufficiency - which is what they care about because they are more interested in their communities than coin collecting.
The problem is the assumption that there is a one to one relationship between money and stuff. There isn't.
If we were to start from scratch and redivide all the wealth in the western world between the people, it wouldn't take long for some individuals to rise to the top again and build up their net worth.
However, with wealth also comes power. There's just so much more you can achieve with good money in the bank. One simple example: a wealthy person with the good lawyer will almost always end up receiving a lighter sentence (if any) in comparison to the poor person with the shitty lawyer (if he even has a lawyer). That is clearly unfair, yet the way it is.
This is certainly true. What's not clear is whether that power can be redistributed equally or if addressing it just leaves a vacuum of power and the risks that entails. More concretely, there hasn't been a form of campaign finance regulations that has actually achieved its goals in the U.S. At least so far.
If the rich couldn't fund their unfair legal teams, would the justice system be more fair? Or would it just give more power to prosecutors who wouldn't have their actions challenged and appealed as often?
http://piketty.blog.lemonde.fr/2017/04/18/inequality-in-fran...
So I'd say no, it's not really a counter. There is something else, something intrinsic in our society, that causes the existence of the wealthy. Or "inequality" as others like to call it.
Events like french revolution were key drivers of reforms that brought around the modern democracy. While they weren't as bloody outside of France, they certanly did influence movements in other countries across Europe and forced their absolutists to accept the necessity of a parliament to curb their powers.
Even IF new wealthy people took the positions, they end result for general population was an improvement of living conditions.
If I understand bitcoin, the work of mining increases as more bitcoins (wealth) are produced.
The rich can buy more mining hardware, start/hire mining services, etc. than the non-rich. Over time, those who can invest in higher performance mining get wealthier than those who can't.
Over time, this would seem to concentrate bitcoin wealth among fewer, wealthier people. Am I missing something?
well the rich can buy ridiculously performant computers...
Eh, I definitely care about at least some degree of real equality of wealth, because wealth just is the material basis for both political power and personal freedom. What I terminally care about is equality of choice: the mostly equal ability of people from different origins in society to make meaningful choices based on their own needs, desires, and values.
Not everyone can become an astronaut or a CEO, but if someone's born to a poor family in a minority neighborhood, we still want their choice to pursue being an astronaut to meaningfully affect the course of their life. Better that they make it into the Air Force and fail to make astronaut on their own merits than that they never get on that track in the first place because their station in life stops them from learning high-school physics.
But I digress. The point is, the words equality and fairness mean nothing in a rhetorical context. One can not possibly approach the idea of correcting the audience's perceptions of those words. So if switching the word you use in your "sales pitch" of policy gets you closer to the idealistic end, then that is what should be done and it should be done without hesitation.
Sure, I don't want a hellscape where everybody is equally miserable when compared with a well-off world where most people are happy and some people are miserable. But if I have to choose between an equal hellscape and a hellscape where some people are merely miserable and others are extra-screwed, then I'm going to pick the equal hellscape. I want both happiness and equality.
The biggest omission to me here, though, seems to be completely ignoring power. Economic equality is tightly bound with the distribution of power. Powerful people have an easier time getting rich; rich people have more power across many dimensions. People signal their power and status through economic expenditure.
Somehow, though, the word "power" doesn't even come up here. Maybe the thing people "really" want (if that framing isn't entirely broken) is equality of power. That shouldn't be a surprise in that America had a whole revolution about that, and then a civil war to boot.
Would you say, "I don't care whether public buildings and fixtures are clean and free of damage or not; I'm just concerned about any increase in vandalism."
I have never met anyone in my life who argued for a completely egalitarian society but for some people, a more egalitarian society is fairer than a less egalitarian society, other factors and reasonable bounds notwithstanding. In fact, the vast majority of people fall into this category, since almost no one would want to live in a society with Gini index 1.
If you ignore a few extremely radical die-hard libertarians whose positions are in my opinion not worth to be taken seriously (yes, I've read some Friedman, etc.; no, they are not more reasonable in their assumptions about human nature than communists), then the disagreements are more or less about:
- just amounts: the levels of resource distribution that one would consider just, e.g. the Gini index one considers acceptable (or other indicators - that's all part of the debate)
- just means: the mechanisms of resource distributions or other ways of obtaining a more egalitarian society that one considers just
- acceptable trade-offs: the trade-offs between methods of resource distribution and other moral, individual and moral principles like the Pareto principle, maximization of individual freedom, solidarity, democratic division of power, the right to a due process, etc.
The Pareto principle is economic and a right to individual freedom is perhaps best described as an ethical principle, but most of the other fundamental issues like Prioritarian or Egalitarian resource distribution principles, equal access to common goods, equality of opportunity, or democratic power division principles all concern different concepts of fairness. It's a fairly broad-reaching term and there are many trade-offs to make that define different political views.
My personal view is that nobody needs billions of dollars to lead a happy and fulfilled life and that various democratic mechanisms to generally decrease differences between income classes are desirable and ultimately lead to a better life for everyone, including the richest. But I understand that other political positions weigh some of the above ingredients differently.
I think having (needing) that much money is generally an indication that you don't lead a happy and fulfilled life.
How can rising inequality be a bad thing, unless (wealth) inequality in itself is also a bad thing?
Your comment also seems entirely jingoistic when read in the context of what it's trying to reply to. What does "controlling it all" even mean? How should people "play by the rules with integrety[sic]", when you're apparently arguing against any such rules?
I'd be really interested in an example of where this is the case. Personally, I can't conceive of a situation where, in a perfectly fair system, the man with the most money is utterly intolerable. Such a system naturally creates the inference that the man did something as an individual to acquire that wealth (and not necessarily in a zero sum manner).
As pointed out in the article, the issue with rising inequality is not that the wealthy are getting wealthier necessarily, only that it comes at the expense of people who work just as hard or harder, but still struggle to get by from day to day. Since the perception is that more work leads to more reward in a fair system, the perception is also that this situation is unfair.
Economic equality, however, is not necessary for such a situation to be fair. Flipped around, if the manual labourer who toils hard every day were paid more than the non-executive board member the situation would be perceived as fair, despite the fact that the two individuals would receive different compensation.
I really can't see the difference between "fair" and "unequal" being a matter of "semantic quibbling".
I'm not sure how this is a response to what I wrote. I'm talking about the tolerability of outcomes for the UNwealthy, while you're talking about a rich person being intolerable?
The semantic quibbling I'm referring to is the idea that when someone like Bernie Sanders rails about "economic inequality", they are implicitly advocating economic equality (which is incorrect, as I've stated in my original comment), and bouncing off that to present "fairness" as the real thing at issue.
And yes, of course we care about fairness. There is nothing insightful about presenting it in contradistinction to concerns about inequality, as though it's the thing we are "really" concerned about. Fairness alone does not guarantee a society where the outcome for the unwealthy is tolerable (unless you're John Rawls). Hence, we care about both.