It's unfortunate they didn't include any references for this claim, which seems pretty bold in the face of voluminous evidence that income inequality has increased dramatically in those same "recent decades". (See e.g., https://www.pewresearch.org/social-trends/2020/01/09/trends-..., https://ourworldindata.org/income-inequality, https://www.cbpp.org/research/poverty-and-inequality/a-guide..., etc.)
The only way I can see to conclude that labor's share of value created has remained anywhere near stable is to either lump executives in with labor, or exclude passive income from the definition of value created.
If the income comes from investments,we'll, there are no limits. Each increase compounds.
So yeah, the rich get richer. The system is broken, but it is working as designed.
Inequality has primarily increased because the wages of high earners has pulled away from median wages. Returns to capital have if anything declined, in contrast. And no, these high earners are not all or even majority executives. CEOs of public companies only make a very small fraction of wage earners in the top one percent. Far more common are physicians, attorneys, tech workers, financial managers, and other professionals.
Nor is it an issue that these are high earning workers are “not paying their fair share”. Almost all of their income is taxed as ordinary income at high marginal rates. Many live in high tax states like California or New Jersey and are paying well over 50% marginal rates.
Once you account for post tax-and-transfer income, inequality in the United States has not increased at all in the past 50 years.
Tax-and-transfer is a response to inequality, and so necessarily lags the problem it tries to address. If current policies were truly maintaining the status quo from 50 years ago, then it follows that wealth inequality would be increasing linearly, and not accelerating as it is.
This road leads to poverty, not prosperity (and more inflation as more money chases fewer goods produced in fewer factories by fewer workers).
Investment happens anywhere there is a chance of positive return.
Investing in new technology either as an inventor/entrepreneur or dumb money still offers returns exponentially higher than anything else, should it work out.
There is a point where excessive taxation/regulation hurts innovation, but I don't think we're anywhere near that.
It's been happening since the dawn of the industrial revolution.
The harnessing of fossil fuels and machinery should have put everyone out of work forever.
We used to be 85% living and working on farms, and now we're 5%.
In short, we found ways to make people way, way more productive, and the standard of living for the average person is astronomically higher today than it was 200 years ago.
I think special attention needs to be paid to accumulation of assets, and that this can definitely get out of hand (even as wages and standard of living rise, it can still be a problem), but overall, it's worked out.
Paradoxically, I still trust markets and regulation more than I do centralized control and distribution. The current US governments multi trillion dollar budgets come with all sorts of special requirements, usually of the social kind that can be liberally interpreted by institutions receiving the money (i.e. schools have to comply with our social view in order to receive the money, instead of just making sure that it's fairly spent).
For example, I think min. wage increases tend to be a better social measure because it's attached to actual production, and, it's generally not encumbered by some kind of employment and hiring ideology.
I honestly believe the tools are available to us, and we can make a ton of progress by just doing basic adjustments, closing loopholes, ensuring standards.
As an example, Healthcare reform of one way or another, even something that disentangled employment from Health Insurance, and somehow got 'pretty much everyone' covered one way or another, might yield gigantic side benefits with reduction of poverty and individual calamity. 50% of individual bankruptcies are Healthcare related. Imagine how much strife comes from that, and it's most unnecessary using a policy framework that we could apply today.
Especially things like offshore tax havens, tax loopholes, bogus charities etc. etc..
So much low hanging fruit, or at least, low-hanging from an ideological perspective.
The key many Americans seem to forget.
I have a home solar-panel system to sell you. It will pay for itself in a mere 25 years. Now, normally, it'd pay for itself in 8 years, but taxes have raised the price. You will surely invest in this system anyway.
All you've done with this example is try to say that X is better than (X + tax), failing to identify the actual benefits and tradeoffs derived from the tax. Please at least try to be somewhat intellectually honest.
Cut that return to a third of its previous value and I’ll leave my money in stocks and just buy electricity made from natural gas.
Thats not how it works. Taking a higher percentage of returns, can leave the returns positive, but the expected value of risks negative.
EX: To make a simplified example, imagine that you can invest 10$, in an investment that has 50% chance of giving you an additional 11$.
That has a positive expected value. But if you put a 20% tax on the winning, now that investment no longer has a positive expected value, even though the returns in the wining case are positive.
You mean these people are so disgusted by the idea of taxation that they would abandon the business opportunity that has presented itself in front of them?
This is the kind of thinking that has gotten us into this hole: "We have to do everything we can to appease the wealthiest, or they'll stop gracing us with jobs!"
There are only so many places you can park your money
Neoliberalism is a failed experiment, we now live in the results of this failure, 40 years after it started. We either address this failure or we let it roll until it sparks a revolution, either way it needs fixing.
how has neoliberalism failed?
And if there is any improvement in neoliberal poor countries it is because of the definition of "extreme poverty" used is based on nominal dollar value disconnected from material reality.
I’m having trouble finding a data set and definition of “long term” that supports that top-3 ranking, care to share yours?
[1] https://www.worldbank.org/en/news/press-release/2018/09/19/d...
I left another comment on the thread with this study [1] which I recommend to anyone wanting to dispute that neoliberalism has failed.
About the US from this study:
> Third, where we have seen a reduction in poverty, it has come from government action, not from education. The earned income tax credit (EITC) and minimum wage, for example, are the systematic levers that raised wages for lower-wage workers—not skills. In 1967, the poverty rate was 27 percent without tax credits and benefits. That number is 29 percent now, but it is 16 percent when tax credits and benefits are applied. The EITC has pulled many people out of poverty.
[1] https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI...
[1] https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI...
Unfortunately and unsurprisingly you got the math backwards on this one.
Coincidentally - they're also the most competitive / not monopolies.
If wage growth isn't coming organically for whatever reason, then some form of wage subsidy will need to occur. Or, you just have large swaths of lower middle class people in a growing state of contempt for the city dwelling elites.
https://www.hinrichfoundation.com/research/article/protectio...
I already suggested giving these people work instead of income.
The argument was "only communists try to solve OTHER people's problems for them and end up creating more problems for OTHER people than they started with"
I personally think communism caused mass starvations that killed millions are bad. If that makes me an evil capitalist, so be it. (As someone who has lived through one such micro famine in a socialist country, I feel I am entitled to that opinion.)
It's like comparing birds and mammals. You're telling us how producing milk for offspring will somehow make us lay eggs because they are both animal protein.
No, most people just want to fix some distortions. Just charge taxes on harmful behavior and you can fix a lot of issues without much government involvement.
In what universe are the western democracies experiencing "extreme capitalism"? This is a mind-boggling statement.
Just in the U.S.:
Government consumes 15% of GDP
FIRE is 20% of GDP
Healthcare is 20% of GDP
Education is 5% of GDP
But not really, because on the income side, Government spending is 44% of GDP (the difference between government spending and consumption is all the checks being mailed out). Private spending is basically only half. Thus half of all economic spending is being directed by politicians.
Extreme free market?
Moreover in the labor markets, we have an extremely regulated economy, in which 23% of US workers need a government license to legally do their job.
Extreme free market?
You can't just say that and then not say why you think that.
People might end up finding a solution by looking at history. France in the late 1700s and Russia in the early 1900s might end up being a reference point for some country in the mid 2000s.
"Target Workers Unite recently released a survey of more than 500 Target workers around the US, representing 382 different stores in 44 states. Only 12.7% of the workers who responded said they could survive on the wages from Target alone, with 56% of workers citing they have ran out of food while employed at Target, and 12.8% of workers reported experiencing homelessness."
https://www.theguardian.com/business/2020/feb/27/target-cuts...
"In most countries in the Western world, it’s assumed governments will one way or another make sure basic facilities like clean running water, sewage, and sanitation are available,” said Philip Alston, the United Nations Special Rapporteur on extreme poverty and human rights, who in 2017, traveled to Lowndes County for a report on U.S. poverty.
“What was striking to me in Alabama was the extent to which there’s no sense that a government should be working towards providing basic infrastructure,” Alston said. “If you happen to live in one of the big cities, you will get access, but if you don’t — and particularly if you live in one of the poor counties like Lowndes — there isn’t any obligation and there are no plans in place.”
https://www.montgomeryadvertiser.com/story/news/local/alabam...
"Stan Brock, who founded RAM in 1985 to fly American doctors and dentists to treat people in some of the world’s poorest and most remote areas, told me during an interview under one of the many M.A.S.H.-like tents on the fairgrounds site that the urgent need for dental care is not specific to Wise. Regardless of the location of RAM’s U.S. clinics—most of the organization’s expeditions are now held on U.S. soil because of this country’s large and growing number of uninsured and underinsured people—60 percent or more come first and foremost for dental care."
https://tarbell.org/2018/08/people-travel-hundreds-of-miles-...
The homelessness rate in the US general population is 0.2%. This survey indicates that in the Target-employed population, the homelessness rate is 64x higher? That does not compute on so many levels. I would have to suspect a massive methodology problem here. It also seems strange that they surveyed only 500 workers from 382 stores - only 1.3 workers per store! How was that one representative of an entire store chosen? This doesn’t scream manipulation via sample size to you?
Being a Target employee also self-selects for low-wage demographics. Let's say the average target employee is in the bottom 20% of income (likely lower, maybe slightly higher, but definitely nowhere near the top 50%). This is saying 12.8% of these low-income individuals experienced a period of homelessness at some point. So 12.8% of 20% of the working poor experienced homelessness. That's saying that about 2.5% of the working poor experienced homelessness (potentially only days or weeks) at some point while working there (which many people work there for 5, 10, 20 years). Not unreasonable.
No different from saying 50% of people once went to college. 50% of people certainly aren't in college now, but at some point, they were.
This argument is used all the time when high incomes are taxed (more taxes = less income = less work) but when people have low incomes we demand that they work more.
There are three.
Either you do the usual: income sharing (welfare and progressive taxation).
You do the next best thing: Let people spend all their money and if they don't do it themselves, let the government borrow money to do it.
Or you do the best thing that is impossible to implement: Work sharing. Make people work exactly as much as they demand work for themselves. You're a billionaire and have too much money? Easy, let someone else who wants to become a billionaire do the job and become a billionaire too.
Tax the excess from the wealthy industries and redistribute via whatever reasonably fair set of programs you happen to like. I know, I know, communism, yada yada. But that's the solution, and it's trivially proven to work. Basically every economy (including the USA) does this in a zillion ways already. It's just that "finance and software" haven't been among the victims so far so it seems like a disruption.
The point here isn't to provoke an argument about SoCIaLisM or whatever, just to point out that your feigned ignorance of working solutions isn't correct. We know how to fix this.
work is doing a lot of, erm, work in that sentence. If it means "impoverish and oppress" then you're right. Otherwise, I can't for the life of me think of a single example where it has "worked".
Because you didn't live during those times. They are what resolved the great depression. They have been abolished since the 70s which means they haven't been done for the last 50 years. Why else do you think has the economy been stagnant for 20 years?
History is recorded in increasing detail over time. By the 1930s there was a lot of recording being done and a lot of it is still extant.
Communism did not resolve the Great Depression anywhere, let alone the United States, and if you're wondering why communism has had such a bad rap since the 70s, I can give numerous examples for that. I have to wonder why you don't know, for example, about the killing fields of Cambodia.
Not be belabor an outrageously belabored point, but no one is talking about anything that anyone ever called "communism".
We're talking about things like progressive income taxation, medicare, social security, welfare, the WPA, etc... The people who implemented those policies weren't communists. Communists themselves were spending the whole time working toward revolution in a proletarian struggle against the governments who did that stuff.
I know it's en vogue in some modern circles to rebrand New Deal economics as "communism". But... sorry, it's really fucking stupid. Don't do that. This site strives for a higher level of discourse.
The quote at the top of this thread that I responded to is:
> I know, I know, communism, yada yada. But that's the solution, and it's trivially proven to work
> sorry, it's really fucking stupid. Don't do that. This site strives for a higher level of discourse.
I would say that what's actually fucking stupid and what should not be done is to:
a) lie
b) be rude
c) be a hypocrite
I don't know if Dang watches these threads and I'm generally against hellbanning, yet somehow I wouldn't be bothered for a second if he hellbanned you.
So you'll have to forgive my profanity. But I stand by it: the idea that Roosevelt et. al. and the mid-century western flirtation with social welfare and redistributable economics constitutes "communism" is really fucking stupid.
We can all see they are your words, some of us bother to read the posts written by others.
> So you'll have to forgive my profanity
I don't have to and I don't forgive you, you've shown no ounce of contrition nor compromise, nor any insight worth providing you toleration.
> But I stand by it: the idea that Roosevelt et. al. and the mid-century western flirtation with social welfare and redistributable economics constitutes "communism" is really fucking stupid.
May I remind you of my recorded words:
> Communism did not resolve the Great Depression anywhere, let alone the United States
If you can't see the implication that Roosevelt "et. al."[sic] actions were hence, not communism, then perhaps you should wonder who is being dense here.
Third decree: no more... rich people... and poor people
From now on, we will all be the same... ummm, I dunno
I gotta think about that...
— Tenacious D, "City Hall"
My guess is, part of the problem is how much of the economy is in the different sectors. Certain sectors (finance, software) have rather few employees relative to revenue, and they are (by definition) not the ones where most people are working. So, perhaps agricultural and industrial employers don't have much room to raise wages, AND too big a slice of the pie is going to employers, because it's not the same companies. The employers with lots of employees perhaps cannot raise wages much, while the employers with the room to pay more aren't employing many people.
So, the solution? Uh, hmmmm...lemme get back to you on that.