One very common argument I hear from Americans is something like this: it's true that (some of) Europe has lower income inequality than the US. However, Europe's inequality is more entrenched and hereditary, and therefore actually worse than America's in social effects, even though in magnitude it seems less bad. The difference between wealthier and poorer parts of society, this argument goes, is higher in America, but this is not as harmful because the divergence is just based on what you make of yourself and changes generation to generation, rather than being based on rigid notions of class or heredity like in Europe and persisting across generations. So the European rich man might only be 10x as rich as the poor man, while the American one is 100x, but the European has this 10x difference predestined from birth, whereas the American's 100x arises only during life.

This study seems to show that particular narrative doesn't quite go through: the U.S. has a larger class divide and it persists across generations more than Europe's smaller class divide does. The second part may well be redundant, as you point out (it might only persist more because it's larger), but that doesn't necessarily make the problem any less bad.

Relative position also matters quite a bit. In Denmark, you can be born on the lower end of society, and end up as one of the country's elites, with greater probability than is the case in the US. I take this as the "Horatio Alger" myth: you are born to a dock worker, and end up President of the USA, or CEO of a Big Company, a unique trajectory only possible in America. But you are actually more likely to make this dockworker-to-PM or dockworker-to-CEO transition in Denmark, contrary to the myth! Put differently, who constitutes the elite in Denmark is less determined by parentage, whereas the American political/economic/cultural elite is more heredity-determined, because the differences from birth are too large to overcome. I think this question of which stratum of the previous generation's families this generation's CEOs/etc. come from has significant implications for society: if it's only from last generation's top-20%, this produces a multi-generational elite, which is generally bad. It could well be that one way to combat the emergence of a multi-generational elite is simply to reduce income inequality.

Steve Jobs

Sergey Brin

Jeff Bezos

David Koch

Michael Dell

Bill Clinton

http://exiledonline.com/a-peoples-history-of-koch-industries...

(Your list) * (20000000 other people)

"kaufkraftindex je einwohner" -> "purchasing power per capita"

  Denmarks per capita GDP 56,210.23 USD 
  USA per capita GDP 49,965.27 USD.

PS: Denmark also had a much higher GDP growth 2000-2013 than the US granted lower last year.

  Per Capita GDP (PPP) 2012
    USA      51,704 USD 
    Denmark  37,324 USD

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_...

Edit: Accidentally hit submit before I was ready to post...

For example you mention cars. The almost identical VW Golf (know as a Rabbit in the US) cost more than twice as much in Denmark as in the US.

http://www.numbeo.com/cost-of-living/compare_countries_resul...

Yes, but the VW Golf is relevant in the U.S., and irrelevant in Denmark. In the U.S. you have to drive, and in Denmark you don't (and most people don't). The modal share of bicycle commuting in Copenhagen is >50%, because the bike infrastructure is good. I sold my car when I moved from the SF Bay Area to Copenhagen, and now I spend less on transportation, with a better quality of commute (in my subjective estimation). Yet PPP would probably claim transportation costs more! Besides the nice bike infrastructure, I have an unlimited-rides metro pass for $50/mo, which includes very good 24/7 service. How much would it cost me to buy 24/7 transportation in the SF Bay Area, where I don't have to drive the vehicle myself? (Night buses that come once an hour don't count.)

I would rather work for 10 months in NY and live in Maui for 2months vacation than spend $15000 traveling to Maui five times for a week each, but GDP says the latter is a higher standard of living.

Sort of like your doctor wanting to know your blood pressure for somethings and your weight for others. They can both tell say something about your risk of heart attack but blood pressure also indicates other more immediate issues and your weight is vital when prescribing medication.

EX: Subtracting exports and adding imports is useful when tracking quality of life adding exports and subtracting imports is useful when measuring economic strength. However, the difference between exports and imports tends to make up a small fraction of the economy so it's not that important.

Better might be to ask Danes and Americans "are you happy with your life?"

On one happiness scale, Danes are the happiest people in the world. http://unsdsn.org/files/2013/09/WorldHappinessReport2013_onl... . The US is #17.

GDP per capita includes everything produced by the country including health care, child care, etc. So that is not the issue here.[2]

In the US only about a quarter of GDP is spent by the government while in Denmark about half is spent by the government.[3] So in the US we pay directly for some services like healthcare that in Denmark are paid through the government with taxes.

[1] http://mruniversity.com/courses/development-economics/gdp-an...

[2] http://en.wikipedia.org/wiki/Gross_domestic_product

[3] http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu...

PPP is difficult because there is no international common basket of goods. Danes get 52 weeks of paid parental leave, of which 18 are to be taken by the mother, 2 weeks by the father, and the others split at the parent think is appropriate, and their job position is waiting for them when they return.

What's the equivalent for the US?

Some of the leave pay comes from the company. Some from the state.

How does the 1 year of overall leave measured in the PPP? How much would it cost to get the same benefits in the US?

I'm not expert in the details of either GDP or PPP calculations but here is my understanding of how parental leave would be treated. It would show up in GDP because wages are included under the "income approach", one of the three main approaches used. I don't believe it would directly show up in PPP as it is not a good or service that people buy. I don't think is means anything to say parental leave is less or more expensive.

Anyway I don't think it would have a big impact as there only about 50,000 births every year in Denmark in a population of 5.5 million. So if they max out the benefit it is only 25,000/5,500,000 = 0.45%. This is a good example why GDP and PPP work in practice - all these random errors tend to cancel out.

If you are interested I suggest you read up on how GDP is calculated. The Wikipedia article if pretty good[2].

[1] http://www.numbeo.com/cost-of-living/compare_countries_resul...

[2] http://en.wikipedia.org/wiki/Gross_domestic_product

How did 50,000 births turn to 25,000 in the numerator? There's 1 year of leave, so that's 50,000, no?

I get 50,000/4,500,000 => 1.1% . Still relatively small, yes.

I noticed a few things about the [1] you mentioned. It's mostly meant for 20-somethings. That is, it doesn't compare health care costs, daycare costs, etc. which older people and parents would be interested in.

Also, there's a deliberate social policy behind why the Volkswagen Golf price is so high Denmark. Quoting from http://www.copenhagenize.com/2012/10/danish-180-tax-on-cars-... :

> this series of taxes was put into place to try and discourage people from driving but also to try and win some money back for society for the destructive nature of automobiles. We know, for example, that for every kilometre ridden by bike, the Danish coffers recieve 23 cents. For every kilometre driven by car, the Danish state pays out 16 cents.

I've read through the GDP many times before. I still don't have a good grasp on it. It seems that having a poorly insulated house, for example, is better for the GDP because I need to work more in order to pay the higher heating bills. Or having more road damage because of automotive traffic is better because it means more government funding to rebuild the road system. Or it's better to use MS Windows than OpenBSD because the latter doesn't cost anything and so doesn't appear as part of the GDP.

These are listed as 'externalities', but it's these externalities which contribute to happiness, enjoyment of life, etc. So while GDP per capita is used as an approximate measure for the ability to carry these out, it doesn't mean that it's actually being done.

You consume more goods and services. If you want to spend time out of the workforce you can reduce your consumption of goods and services. Most people in the US don't do this because they value consumption more than leisure.

If anything, this cuts against quality of life in Denmark. If a significant number of Danes prefer consumption to leisure then they are harmed by parental leave. They are forced to trade consumption for leisure even though they don't want to. In much the same way, if you forced me to trade my Thinkpad for an equally priced Macbook, I'd be worse off in a manner that is not reflected in GDP.

http://en.wikipedia.org/wiki/Purchasing_power_parity

You need to survey folks who have lived in both places.

Delete your post if you like...

To be poor in Denmark [1]: 36 year old woman on welfare, single, 1 kid at home. She gets $2884 per month AFTER taxes, free healthcare. After paying for rent, utilities, internet, TV licence, dog food and vet bills, kids football expenses, medicine, private debts, and cigarettes, she has (by her own calculation) $917 left over each month for food, clothing and housekeeping. She has been on welfare for the last 20 years.

This example made a huge media storm in Denmark because she gets more money than those working minimum-wage jobs.

1: http://cphpost.dk/news/poverty-media-stunt-backfires.153.htm...

Then I wondered. Should someone who is physically or mentally unable to work always, for the rest of their entire life, get less than minimum wage?

I mean, an employee at McDonald's takes home, what, $28,000 a year post-tax [1]? That's $2,300/month, which isn't much below the $2,884 you quoted. Except most McDonald's employees have the ability to get jobs in the future which pay much more.

So shouldn't the debate include not only a comparison to low-end jobs but the average lifetime earnings?

[1] http://www.cjr.org/the_audit/the_minimum_wage_and_the_danis....

What's "fair" for someone who really can't contribute? Is it fair for them to live better than those who are paying for their life style? What about the fact that the person who really can't contribute probably also seems some sort of relatively expensive accommodations? "Minimum living + basic accommodations" may still come out to more "money" being spent on them than a normally-abled person making a reasonable low-end wage, even if it initially appears they're living in "poverty". Is that fair?

When it comes to fair, you have to remember that the money is coming from somebody else, who has their own claim to "fairness" themselves. There's no infinite money fountain that allows us to simply forget that; it's always a balance. How much work should the normally-abled be forced to do by the men-with-guns (government) for those who can't contribute? It's a really, really hard question. I don't have answers for my rhetorical questions in the previous paragraph.

So for Denmark let's not talk about "poverty" but "below the minimum wage for all private and public sector collective bargaining agreements", which Wikipedia tells us is 109 kroner ($19) per hour.

"There's no infinite money fountain" ... how come with all of the advances in efficiency over the century, we're still working roughly the 8 hour days from factories 100 years ago? While not infinite, surely we should be better at using that fountain by now.

I read "forced to do by the men-with-guns" often, though of course not always, from libertarians. I've always had a problem with that. There's coercion by force, certainly, but there are other ways to coerce. The government can also deny you access to things. For example, to a working water supply and sewage system, to the banking system, to telephones, to health care, to parental leave, to the judicial system, to weather reports, and so on.

Some of that can be worked around, like by going off the grid, but not all. It's very hard to travel internationally if the US refuses to issue a passport. If you don't have access to the court system, then what do you do when your neighbor decides to move the fence 3 meters closer to your house?

Indeed, I can easily consider a government based completely on the threat of the withdrawal of services rather than force. Some very rich people, and certain groups like the Amish, may be able to go it alone. Otherwise, the switching cost of leaving government services will be too high.

So no, I don't think that it's reasonable to think of government as synonymous, even poetically speaking, with coercion by force. You need only look at, say, the Viking sagas of Iceland to see how governments can exist to help reduce the overall need for coercion by force.

Simple: We are. Or at least, there's a lot more to go around for everybody, even if overall efficiency may or may not have dropped. However, as long as resources remain finite, there are still tradeoffs; we can not escape that. I think the reason we believe we are so much poorer than we were a hundred years ago is that we got ten times richer, but our desires grew twenty times larger. We are still ten times richer even so. (Numbers made up. Especially the desires one.)

"The government can also deny you access to things." Which they will be doing with force, unless you have this mental model in which the government announces "Oh, BTW, we're not letting you have any water" and your mental model's citizens just say "Oh, OK then, we'll just peacefully crawl over here and die then. Would you like us to bury ourselves for your convenience?" Indeed many people do seem to operate with this model, but I find it models reality poorly and makes bad predictions. I suppose it comes from a multigenerational civilization where government and citizens have mostly managed to live in peace, and it seems to me that seems to produce a dangerous situation in which both sides eventually forget what that peace is built on.

I think you've made an unstated assumption that it will go around to everybody. If wealth concentrates to the top over time, then most people could be worse off, and a few be spectacularly rich, even if desires remain unchanged.

"Oh, OK then, we'll just peacefully crawl over here and die then."

If the government utilities stop providing water and power to your house, what do you do? (I assume you want those things.)

Yes, you could switch to solar, or a generator. And you could drill a well and harvest rainwater. These are high costs. Can most people afford doing that? And afford the higher maintenance?

Or you might get a non-government utility to come in. Which means they need a line from the power plant and a pipe from the water works, both to your house. There's a lot of people in between who might say "no" to the request to string a power line or dig a trench across their property. (The concept of "right-of-way" requires some sort of coercion.)

Yes, it's doable. There are entire communities which are off the grid. But costs time and money, which most people aren't interested in doing.

Or you could sneak in and hook up to the government utilities, so each time they'll disconnect and make it harder.

Or you could connect to your neighbors. Then the government disconnects them.

This is inconvenience, not violence. Where's the government force in my example? But yet it is coercive, yes?

When I graduated from college, I had to pay off a small library fine before I could get my diploma. The college didn't force me to pay the fee. But the threat that I wouldn't get my diploma unless I paid was a very big incentive. So I know at least one case where this model of mine makes a good prediction.

"what that peace is built on". The "men-with-guns" models simplifies that to the point of farce. There are incentives to having and being part of a good government. There are means of coercion other than force. And there are men-with-guns in places without government.

No. I've simply observed there is a lot more to go around.

"f the government utilities stop providing water and power to your house, what do you do?"

In general, and under the conditions you've stipulated where the government is also preventing me from taking any other options, start rioting. This is what I mean by your model failing to accurate predict the real world; you need only look out there to see this happening. If the government wishes to make this stick, they are going to have to use violence.

You seem to simply be unable to conceive of the possibility that violence is an option for the non-government as well, which will require either violence or acquiescence from the government in response. I assume this is because you live in a place that has probably been civilized for centuries. But it's all ultimately based on violence. Try to not pay your taxes, and not go to jail. Sure, the enforcement starts nonviolently; it isn't in anybody's best interests to escalate that fast. But if you've done anything the government cares about at all, sooner or later the police come out. If they don't, then it is because the government didn't care in the first place.

"Where's the violence?" Why, of course you don't see any. You've carefully crafted your examples to stop right where the violence would start in real life.

"There are means of coercion other than force."

Which, by definition, can therefore be resisted by force.

"And there are men-with-guns in places without government."

Which is actually an important point to why the "men-with-guns" model is not actually bad. Government centralizes the men-with-guns, so they fight each other with methods other than raw violence (voting, bureaucracy, etc.) and allow us to get on with our non-violence-related lives. The government monopoly on violence is a brilliant civilizational innovation, not something to be deplored. But it is also something not to forget. Laws either are backed by violence if you persist in violating them, or are ultimately irrelevant, and I wish people would treat passing laws a bit more seriously, instead waving the laws and consequently the guns around so casually. This is part of how the police have gotten so militarized in the US, by being so casual with our drug policy, among others.

You say that without the ability to project force, then a response from someone being denied services is force, and when that happens, the government responds with force.

So be it. Yes, that's almost completely true. At some point, every single action can be trumped by someone with bigger guns, and everything recast into a force viewpoint.

There's a few which cannot and were not trumped by guns. Under the old laws, someone had to plead innocent or guilty before being tried, and lands could not be confiscated without trial. Giles Corey famously resisted the torture of being pressed to death, calling out "more weight!" instead of pleading innocent or guilt. As there was no trial, his lands were not forfeit to the government. Having the biggest guns didn't work there.

As a more hypothetical example, it's hard for you alone to force a doctor to do a quadruple bypass on you, because at some point you will be unconscious, and the doctor can simply stop working. You might try various dead man options, but the odds of success for you are very small. Nor can you and a thousand others, by threat of force, get people to build you a spacecraft to travel to the Moon and back - there are too many points of failure where a single person, through deliberate negligence, can stop that from happening.

In any case, a government does not need to claim a monopoly on violence, nor does civilization need that as a prerequisite. I pointed to the Viking sagas as a case in point. Look specifically at Grettir's Saga. It's acceptable to kill someone, so long as you are willing to pay the weregild. That's part of medieval Scandinavian law, which is not based on a central authority.

In this saga, the people involved could not settle on the payment themselves, so they consulted the lawman. (The lawman was the sole government office of the medieval Iceland.) Thorkel Moon decided on how the weregild was to be paid from the lands. In addition, the killing started because of a disagreement in who gained from a beached whale. The lawman decided "henceforth be it made law, that each man have the drifts before his own lands." Based on the previous paragraphs of the saga, which describe the violence between the different parties, I easily draw the conclusion that people decided it was better to follow that edict than to undergo the deadly fighting every time this might happen in the future.

Clearly civilization can exist and has existed where the government does not claim a monopoly on violence.

Even in US law, the government has explicitly stated that certain types of violence by non-state actors are explicitly allowed, and the government will not interfere. For example, parents are allowed to beat their children, to some extent, even when a government actor cannot do so.

Yes, you can recast this as the government allowing some sort of devolved violence, but as it's indistinguishable from saying that the government has a non-monopoly on violence, and there's clear examples where government didn't have a monopoly on violence, I conclude that your view is too reductionist to be useful.

"Laws either are backed by violence if you persist in violating them, or are ultimately irrelevant"

shrug Everything is ultimately irrelevant. The US will crumble and/or be replaced someday. All acts of violence any of us do will eventually be meaningless in the face of entropy.

In the shorter term, consider the US Pledge of Allegiance, probably the most recited socialist-derived words in the US. US law - the Flag Code - describes the pledge. The Supreme Court in West Virginia State Board of Education v. Barnette said that the government could not force child to state the pledge, as it was a violation of the First Amendment. Further court decisions said that a child could not be punished for not standing up for the pledge, and that recitation must be voluntary.

Thus we have a law which has no "guns" behind it. When teachers have tried to punish students for not saying the pledge, the government courts have reprimanded and fined the schools.

And yet that law has a coercive ability even though there is no state force. It's backed by social ostracism, yes, but that's certainly not part of "the government's monopoly on violence."

Of course if you don't follow SOME rules, in the end a civilized society has to attempt to corral you or eject you. What other course do you suggest? Sedation?

Yes, computers were once so expensive that, quoting Professor Frink, "only the five richest kings of Europe would own them". Now they just about come free in a box of cereal.

The usual solutions are either 1) use something like the OECD approach, where poverty is the number of people making under 1/2 the median income, or 2) use a "relatively absolute" basket of goods concept, which includes housing and food.

Instead, you hand-wave "faaaaar better", without explaining what you mean.

For example, it is not "faaaaar" easier for said unskilled person in NYC to find affordable housing now than 1914. For one, zoning laws and regulations have reduced the number of boarding houses, cage hotels, and flop houses over the last century.

You can have all the bandwidth you want, in your proverbial shelter under the bridge, but it won't keep you warm.

But otherwise, yes. Given the massive improvements in efficiency over the last 200 years, why should the relatively small number of people who are unable to work be forced to live in poverty?

Edit: reading the link, I guess this is in reference to what workers at a McDonald's in Denmark make.

When McDonald's entered Denmark, they tried to be non-union. That didn't work out for them, and by 1989 they entered agreements to work with the union. See http://www.remappingdebate.org/article/high-road-high-wages-... for some of that history.

The lowest paying union job in Denmark is just under US$20/hour. Figure 1550 hours per year (the Danish average) gives US$31,000. The article I referenced uses "full-time equivalent", which is likely a 2000 hour measure, or US$40,000.

My estimate sets the baseline, but the actual wages might be higher. The article I mentioned quotes $45K/year, and links to a McDonald's document .. which is in Danish, and I don't know Danish.

> a Big Mac extra value meal costs 58 kroner, or $10.25, while the Dollar Menu is the 10 kroner menu, which means it’s the dollar-seventy-seven menu here. In Denmark, taxes are included in list prices, unlike in the US, so backing out the 25 percent VAT gives us $8.20 for a Big Mac meal and $1.41 for the “dollar” menu. That compares to $6 and $1 in Seattle.

(It's not quite right to compare VAT and sales tax, but so be it.)

[1] This one: http://obs.rc.fas.harvard.edu/chetty/mobility_geo.pdf

http://cee.lse.ac.uk/ceedps/ceedp111.pdf

Follow the graph and one might think Nebraska, the Dakotas, Iowa, Minnesota were some kind of dream land.

The graph measures who gets to the top quintile (1/5). Yet the article only mentions quintile once, in nondescript passing.

The person who earns $100,000 in nation A can now comfortably afford a top 10% lifestyle in that country. For example, the very best housing of the country is reserved for them (if they want it: they have first dibs). They now have significantly more economic power than their parents had, at least within their country.

That would seem to be less true in nation B - person B might have observed their objective wealth to have increased similarly to person A, but they have been less able to change their relative status in the world and are less able to move up any ladder-based system (I propose that land ownership/housing is typically one such system) and are more dependent on factors outside of their control.