Where do people get this strange idea that if someone else makes money it somehow precludes others from doing it? Bill Gates got rich with an invention that also generated probably a trillion dollars in economic growth for everyone. Including most people on this sites income.
There is an easy way to see that and it is if the median inflation-adjusted hourly wage has risen in the US since the early 1970s. Or if inflation-adjusted weekly earnings have risen. They have not, with GDP growth, both have fallen.
That this even has to be discussed shows the deep control those heirs who expropriate surplus labor time from workers have over discourse, the media, forums like this (run and controlled by an accelerator) etc.
Workers create wealth at a mature company. Some of that pays the electricity bills etc., but then the rest goes to either dividends to the heirs, or to wages. That is the "preclusion". The heirs expropriate the profits of the surplus labor time from the workers creating the wealth. They are shorted on their wages. Sometimes this is explicit like the cabal between Steve Jobs, Eric Schmidt that came out in the lawsuit.
Insofar as Bill Gates and invention - it takes a hell of a lot of gullibility to swallow the fantasy you concocted. Kemeny and Kurtz created BASIC. Gates hacks into a military research computer at Harvard and steals computer time from it according to Paul Allen's book (and Harvard admin found out and had proceedings) - they port BASIC to the Altair.
Then IBM comes to Microsoft. IBM got wealthy with computers on taxpayer funded government contracts and a monopoly which was lightly overseen. Gates's mother is on the United Way board with IBM CEO Opel who helps makes this meeting happen. Microsoft sells Seattle Computer Product's Qdos to IBM (Gary Kildall said it was a complete ripoff of his Drdos). A purchased ripoff of another product, sold thanks to family connections. So much for "invention".
At times like the current one, with real wages falling since the early 1970s despite economic growth, that this is even discussed is a sign of how the heirs have bought and paid for the narrative as well.
The question was really simple. Your answer is the kind that inevitably ends with "you just have to read Das Kapital". That is not an answer.
As I said, when, after the electricity bill etc. is paid, created wealth is split between dividends to heirs and wages to those who worked and created the wealth.
If in your hypothetical situation there is no split - if the person who worked and created wealth keeps everything - there is no expropriation.
The expropriation is the last few hours of work he does, of the wealth he creates - none of it going to him, the one who created the wealth and did the work. All of the profit going to the heir. But if there is no split, this expropriation does not happen.
Nobody, and Marx doesn't say that anyone is in such a case.
>Is it not possible for everyone to be richer than they started and also create wealth??
In some way, it is possible - after all, the worker is richer than he was before (he has more money thanks to his wage) as is the capitalist (who has made money from the sale). Now what wealth is created? Arguably, social wealth in the case of new technology being developed, for example. But Marx doesn't deal with this concept of "wealth" or even immediately money, he deals with the concept of value, which works at a different level of abstraction to money. The value-form only becomes the price-form, they're not identical.
I'd suggest looking up theories of exploitation as they have been figured in Marxisms that don't rely on a labour theory of value. It's too much[0] to summarize in one HN comment, but you don't need to read Capital either (though it would be helpful).
The same concepts can be applied to the wealthy having access to lobbyists and consequently the ability to reduce regulations leading to long term health care costs for those forced to live in now less regulated environments. Gentrification is another venue for this. People live in a neighborhood, wealthier people move in and property taxes go up. Poor people are forced out. The actions of the wealthy have ramifications on the lives and incomes of the less wealthy.
I've read conflicting things about gentrification. But on the "gentrification is good" side, the theory goes that areas that tend to "suffer" the most gentrification, tend to be areas that have very high levels of displacement already. They tend to be poor, lots of foreclosures or dead beat renters. In other words, gentrification doesn't necessarily increase levels of displacement. Owners in gentrified areas stand to greatly benefit from gentrification. The renters... they get displaced - but that was happening whether the area was gentrified or not.
Any monopoly tilts the playing field so 90% of the business sector's profits pour into the pockets of a tiny few, leaving others high and dry. And virtually all the notable tech successes of the past 20 years arose and thrived via monopoly.
So it's little wonder why VCs like unicorns so much. The profits involved aren't shared with others.
Yes, it's possible for the rich to get richer while the poor also get richer. It's also possible for the rich to get richer by taking all the economic gains for themselves, leaving the poor to stagnate or to get poorer.
Over the past 40 years the bottom half of the economy in the US has seen zero growth. This despite massive growth overall. This despite rising house prices, growing student loan debt, etc. The rich have gotten richer and the poor and the middle class have been edged out. It doesn't have to be this way, but it is.
Why? Because of wage suppression, union busting, wage theft, predatory and usurious student loans, corporate welfare, tax cuts for the wealthy, and on and on and on.
You seem to believe there's a fixed pile of money in the world that every human competes for (e.g., 16th century Mercantilism).
Go into the woods and turn a tree into a chair. Where did that value come from? Will it run out?
The problem is when a company makes x, ceo takes 0.1x in compensation, while everyone else on the payroll combined also takes 0.1x in compensation just because they didn’t show up to work with the same provenance as the ceo. For a company, there is very much a fixed pile of money that every employee competes for.
I don't see how it's inherently wrong for a CEO to take 10% of revenue and employees split 10%. And why do companies have a fixed pile: shouldn't an effective CEO grow top-line revenue? What if employees are splitting twice the revenue compared to a year ago? (If the company isn't growing, replace the CEO for someone who earns their 10%.)
Money-making inequality, on its face, doesn't seem different than artistic inequality. Should I be angry that Warren Buffet gets 20% annual return on his investments while index funds only do 8%?
Stories of countless species hunted to extinction show that this is not what happens.
Let's look at the physics(?) of the economy: where does wealth actually come from? It's either from transforming things into more useful things or increasing efficiency of processes. There are limits to both of those things.
We live on a planet that's in a rough equilibrium in terms of both matter and energy.
So we have a finite maximal amount of value that we can extract from a constant amount of matter - which means that overall wealth is limited - we're just moving it around and at a finite rate at that - somebody is getting a bigger slice of this pie than the others.
There may be a finite limit on potential wealth but it’s effectively limitless for human planning purposes.
(For the trees, we can certainly mismanage our resources; it doesn’t mean it’s a priori impossible to create a growing and sustainable form of wealth.)
Actually a pretty decent amount over the life cycle of a person. After all those things require a functioning civilisation that educates properly to begin with.
The internet is mostly a means of making communication more efficient - that was one stupidly inefficient process ripe for an upgrade.
So yeah, no additional wealth really - just much less losses.
The internet and other tech doesn't create new wealth? Why has the size of the economy grown exponentially since the industrial revolution?
If wealth were fixed, as population in increased we'd be getting vastly poorer worldwide (1.6 billion in 1900 -> 7 billion people today). Have we gotten 5x poorer on average?
(These facts are easily googleable.)
https://www.google.com/search?q=world+gdp+per+capita+over+ti...
I’m not saying local deviations don’t exist - I can lose my job - but globally wealth has been growing continuously and poverty is being eradicated. This is only possible with wealth creation. Look up Hans Rosling’s work.
Either you care and the 'allocation' is unfair.
Or you don't care, which means that the market doesn't work since you caring is what is supposed to allocate resources fairly, and it is still unfair.
Thinking "someone earned money which would have gone to me otherwise" is like thinking "someone got in shape and that physical fitness would have gone to me otherwise".
https://en.wikipedia.org/wiki/Money_creation
When I deposit $1k in the bank and you take a $500 loan, $500 is created out of nowhere. You are using my deposit yet I still have a balance of $1000 on the books.
Uber created a lot of wealth. Some got more than others. Is that objectively bad if the wealth didn't exist before?
...there is. not in the sense of "money" but in the sense of "wealth" and ownership of private property. Wealth is not "created" it is diverted. If wealth grows in one place it's because it shrank in another.
Unless you believe that growth and resources are infinite, like many capitalist economists.
Potential wealth is ‘finite’ because humans are finite but there’s no practical limit. (Just like there’s no practical limit to how much art can be made. If art isn’t being made it isn’t because there’s only so much creativity to go around.)
You described one of the only scenarios in which wealth is "created" and the only reason it's created is because it derives "free" energy from the sun. But that is just one of the economic inputs of the seed, and there are many more (the labor to water it, the water to grow it, the land on which it grows).
The sun's energy in this case is a small portion of the actual economic inputs the seed requires. And those economic inputs are diverted from somewhere else. They do not appear out of thin air.
So yes, I agree, we should harness the sun's energy, or other "free" energy sources, as economic inputs.
That doesn't change the fact that the overwhelming majority of wealth already exists and is not created out of thin air, but diverted.
We take natural resources, often plentiful, apply labor + skill, and get a more valuable product. We're wealthier as a result.
Yes, natural resources are finite, but not the limiting reagent for most things. There's a zero-sum game in that land used for farming is not available for an entertainment complex. But we have so much used for "nothing" that switching it to "something" is a giant increase in wealth. You can buy an acre in Kansas for a month's worth of minimum wage work. Las Vegas was built in a desert surrounded by hundreds of miles of wasteland. Did turning land, earth, trees, and iron ore into Las Vegas add zero value? (Not saying it was the best use of resources, just that assembling buildings improved the value of the raw materials.)
As a counterexample, consider melting down a car into slag. Are you less wealthy with your charred steel than a working car? Of course -- charred steel is less valuable. The number of atoms is the same. In other words, is an assembled watch worth the same as a pile of gears? Are you indifferent to the two?
If wealth were fixed in the earth, we must be getting poorer as the population grows. A few thousand years ago we had 1M people on earth. Were those peasants 7000x wealthier than us?
In regards to your watchmaker: a pile of gears might be marginally useful to a few, but a working watch will be valuable to many. Has the watch created wealth? No, because the people who were not buying watches are now not buying something else in order to buy the watch. The creation of the watch did not add the dollar-value of exactly one watch to everyone's wealth, allowing them to spend money on the watch. The wealth was diverted! The creation and selling of the watch certainly did create societal value but it did not create wealth, it merely diverted wealth from some other purchase each watch-buying customer would have made and sent it to the watchmaker.
My point is that the overwhelming majority of transactions are diversions, not creations, of wealth.
To your very original point: "You seem to believe there's a fixed pile of money in the world that every human competes for"
I suppose my argument should be changed to: Perhaps amount of wealth is not currently fixed (as defined by the shrinking number of resources one could use to create wealth), but those who create wealth (and not just merely divert it) are generally already very wealthy and are generally the only ones who have the means to create this wealth due to extremely high barriers to entry.
So, I would say theoretically, you're correct: there is a growing pool of wealth. But practically, any normal, everyday person cannot go around creating new wealth...they can only hope it is diverted to them by someone who already has wealth.
You may enjoy the elephant curve: https://www.brookings.edu/research/whats-happening-to-the-wo...
The very rich and moderately poor have seen wealth increase while the top quintile (E.g. many Americans) have seen wealth stagnate. Globally we’re richer on average but not everyone participated. Clearly it’s best if we can lift all boats and not certain subsets.
The ability for new wealth to be created is predicated on the fact that we have an expansionist monetary policy, or else people would simply never invest and we'd have a society comparable to a feudal state.
There is only so much land, food, and materials to go around.
I say "ish" for the first one because hopefully humanity will grow beyond Earth in the near future.
Generally, all of the above are false unless you are talking about a population which never stops growing, and in that case that would be the problem. Not wealth inequality.
There is also something to be said for personal choices of the non-wealthy. I see many in my lower-middle class city with new luxury BMW or Benz ($30-50k) vehicles, who are living in $120k condo units. I see many people with shiny massively spec'd out trucks that they never used to haul anything and just park at their office job. What would the country look like if average people saved more and invested some of their lifestyle splurging?
So, while the tax structure and skill gaps are big, we can also say consumers need to be much smarter and more modest if they want to build wealth and improve their station.
Ture. But this is an interesting point. It becomes a "fool's game" like a casino, where everyone knows that the odds are stacked against them. So when they loose, they can internalize their fault. Yet there's an abundance of "shiny" going around so that people's choice becomes emotional and hope-based, instead of rational.
Therefore there's no incentive to change the system because it's so easy to blame those who lose out: "see they made poor choices"—nevermind how we bombard those people with a ton of fine-tuned marketing. Taking the massively spec'd truck as an example, consider what the car manufacturer is selling: the feeling of power. Now watch a popular game on TV and get that message drilled into you about 30 times each week, while living a life that is otherwise very constrained in terms of finances and opportunities... many give in.
How the hell do you know the financial situation of strangers? What economic data do you have to back up this assertion that lots of people would be better off if they weren't foolishly spending your money? Or are you the local "leading authority on what shouldn't be in poor people's grocery carts"? [0]
[0]https://local.theonion.com/woman-a-leading-authority-on-what...
Wealth is not a zero sum game.
Wealth is not a zero sum game.
Wealth is not a zero sum game.
A.) The upper class are extremely rich and the rest are desperately poor, or:
B.) The masses have enough money to live comfortably and the upper class has 9x of that growth because that's how percentages work--thus this world has to have many times more total wealth relative to the world in option B. It works if that is feasible considering that world's industry.
But what about when inequality keeps growing as projected, and the 0.1% have 90% of the wealth? Then the 0.01%? For the rest of the people to have a similar quality of life, the total number of assets in the world would have to grow by 10,000x. Otherwise, some people have to get poorer for a perpetually smaller percentage of people to have 90%.
Wealth isn't strictly a zero-sum game, but at a certain absurd point the math doesn't work. At that threshold, cold hard physics kick in and physics is most certainly a zero-sum game. Physics is as zero-sum as it gets. Nature balances her books mercilessly. If wealth inequality is at reasonable levels and there's a reasonable amount of growth, it's perfectly possible for the middle and lower classes to be prosper while wealthy classes obtain much more money than they. But when the wealthy have an extreme majority of all assets--in order to keep the rest of society at a tolerable standard of living you'd be raising the total assets in the world by like ten thousand times. Obviously that wouldn't work. It assumes totally unrealistic rates of growth, which is a recurring issue for our civilization these days. Wealth does become a zero-sum game under specific conditions. Our civilization isn't a perpetual motion machine.
This isn't up for debate. The two things are, by definition, not the same. You may think they are related, but that burden is wonderwonder's (and perhaps yours) to prove, not mine. Two separate concepts are not correlated, causal, or interchangeable until they have been shown to be. Not the other way 'round.
I don't think everyone else is stupid. But people that conflate those two things are either missing something or doing it deliberately (knowing full well they are wrong). Telling someone this is not arrogance, and my comment was perfectly coherent to a great many people if upvotes are any indication. If you want an example of incoherence, look no further than the comment which talked about "driving past food banks" as if that was some sort of "gotcha" about wealth inequality. I think it was lost on wonderwonder that food banks themselves are a great example of wealth not being a zero sum game.
You really should work on your debating style. Phrases like "this is not up for debate" are just bullying to stop a debate you don't want to have. If you are the same at work I feel for the people who have to put up with this.
Now, as to your comment (which was never the topic of discussion in this part of the thread): if the entire economy grows at 2%, and 0.1% of people’s wealth grows at 10%, the growth of the entire economy can absolutely account for that subset’s gain in wealth. It depends entirely on how big those respective groups are, not purely on “this % is larger than that %”. The money is not necessarily coming from someone else. The growth of the economy is not a fixed rate — if more people produce more good work, the economy will grow more. You also might be forgetting globalism and the fact that the "1%"’s wealth is not necessarily coming from One Place™. For example, Jeff Bezos is wealthy because of AMZN. AMZN operates in many countries all over the world. Therefore, saying “the US is growing at X rate, so Jeff Bezos’ wealth growth rate is too high!” is misguided at best. This is true for many of the "1%" -- they are creating value all over the world, not just in their home country, so it follows that the growth of their wealth is not tied to the growth rate of their home country.
I hope making calculations is not part of your job, because if so I feel for the people that are forced to rely on them.
Good luck with your wealth redistribution campaign. I'm sure it'll work out great. Who knows, you might get a life of abundance you did nothing to deserve!
[0] or, at least, rivalrous, in that for anyone to gain utility from wealth compared to an alternative scenario, someone else must lose; it's not real clear that utility can be meaningfully aggregated across individuals.
That comment reads like someone fed a thesaurus of non-words and a copy of the Communist Manifesto into a Markov chain.
There is absolutely no prospect whatsoever of Social Security collapsing. A 0% chance. There is no factual basis, only flat-earth anti-vaxxer type scare mongering, for any claim to the contrary. Social Security is funded by payroll taxes. The only way Social Security could "collapse" is if people stop getting paid.
There are less and less workers having a job and paying taxes, while there are more and more benefits to pay for. This is especially applicable to elderly and pensions, in countries with a socialized pension system.
Imagine the situation where both parents are getting retired and were promised 80% of their salaries, while both their children can't get a job. It's all too common nowadays. There is no tax to collect.
This may not be too much of a problem in the US where there is limited pension, healthcare or unemployment. Europe will hurt though.
Add the very real prospect of social security collapsing and we have a good setup for the streets being filled with homeless and vast portions of the population failing simply because there was just not enough money to go around.