Does wealth create poverty?
The limited resources in the world can be thought of as a giant pie cut into even slices. In an [s]fair[/s] [equal] society everyone would get the same amount of slices. In reality, one percent of people get half the pie and the other half goes to the other ninety-nine percent. The remaining half of the pie likewise get's distributed unevenly. In the end, the bottom five percent fight over crumbs. There are many scarce resources that we fight over, even ones that you never thought of as resources.
Time. A disadvantaged person's time is worth much less than a privileged person. Therefore the poor have to work longer hours and get less pay (less of the pie).
Money. There is a limited supply of money in the world (the money pie). When there are more rich people getting more money, somebody has to be getting less, namely the poor.
Education. All the good professors are in elite colleges which are expensive. Unfortunate student will have to do with colleges with substandard professors and get low quality education, while fortunate students get great professors and great education.
Merchandise. When there are more wealthier people around guess what happens to the price of quality goods? It goes up. Poor people can't afford the inflated, quality merchandise so they have to settle for cheep junk.
Services. There's a limited supply of good professionals from cleaning ladies to psychiatrists The price for quality services gets jacked up because the rich end up hogging up all the good ones.
Workers. Wealthy companies have enough money to acquire all the good workers, leaving lousy workers for the rest. Not surprisingly wealthy companies in turn are more likely to be successful. And their success makes them more wealthy. And the cycle continues. The opposite true for poor companies.
I can fill this page with examples. But by now you probably get the idea.
Do you agree with my analysis. Did I leave out crucial information such as the idea that a rising tide lifts all boats, and the effects of mass market production?
Does wealth contribute to poverty? If so, what do you propose we do about it?
Time. A disadvantaged person's time is worth much less than a privileged person. Therefore the poor have to work longer hours and get less pay (less of the pie).
Money. There is a limited supply of money in the world (the money pie). When there are more rich people getting more money, somebody has to be getting less, namely the poor.
Education. All the good professors are in elite colleges which are expensive. Unfortunate student will have to do with colleges with substandard professors and get low quality education, while fortunate students get great professors and great education.
Merchandise. When there are more wealthier people around guess what happens to the price of quality goods? It goes up. Poor people can't afford the inflated, quality merchandise so they have to settle for cheep junk.
Services. There's a limited supply of good professionals from cleaning ladies to psychiatrists The price for quality services gets jacked up because the rich end up hogging up all the good ones.
Workers. Wealthy companies have enough money to acquire all the good workers, leaving lousy workers for the rest. Not surprisingly wealthy companies in turn are more likely to be successful. And their success makes them more wealthy. And the cycle continues. The opposite true for poor companies.
I can fill this page with examples. But by now you probably get the idea.
Do you agree with my analysis. Did I leave out crucial information such as the idea that a rising tide lifts all boats, and the effects of mass market production?
Does wealth contribute to poverty? If so, what do you propose we do about it?
Comments (59)
Isn't that assumption open to question?
You are saying that in school, the kid that works hard, studies every night, forms study groups with his or her peers, attends all office hours, and works his or her ass off; deserves the same grade as the kid who slacks off and plays video games and skips class.
The business owners who works 20 hours a day to build their business, cares for their employees, provides genuine value to the community, deserves the same as the business owner who rips off his customers and cheats his employees.
Your vision seems like an extremely unfair society to me.
The distribution of wealth may be worse than you suggest. The 8 richest billionaires control as much wealth as 50% of the world's population (according to Oxfam).
With [s]8.3[/s] 7.3 billion people (and rising) it is difficult to work out what an equal share of wealth would be, and it would be even more difficult to work out the means by which the world's resources could be evenly distributed. Besides which, the needs of individuals are not equal. A person living in Saskatchewan needs a more substantial shelter, more energy and warmer clothes in the winter than someone living equally well in Uganda, where the climate is very mild all year round.
Still, everybody needs a minimum number of calories, clean fresh water, shelter, clothing, access to cultural goods, and the means to obtain these goods. The first three--food, clean water, and shelter, require the most energy input, and are likely to become scarce as the climate heats up, cost effective resources are exhausted, and the population increases. (The population growth rate is slowing, but it is still increasing). Education (access to cultural resources) is already out of reach for large percentages of the world's population.
A redistribution of wealth into regions most in need of assistance to adjust to change (the poorer countries, of course) could be arranged. Will it? Don't hold your breath.
Limit the amount of inheritance outside of spouse to a maximum, say $1 million dollars for entire estate.
Now that I can agree with. One of the recent trends is "assortative mating," in which upscale professionals mate and create privileged offspring. We have rampant inequality, worse even than the gilded age of the 1920's. This is getting to be a real problem in our society.
Quoting Cavacava
This only makes sense if you think the government should be allowed to confiscate the work of someone's lifetime. Only a committed Statist would think this is a good idea. For one thing, it would not solve the problem. The offspring aren't only getting money from their parents. They're getting the best education, the best work ethic and values, and so forth. Your solution is nothing more than a government grab of the assets of productive citizens that does nothing to solve the underlying problem of growing inequality.
There was a depression around 1893, and a few years later the beginning of the Progressive Era which was about as welcome by the rich as an infestation of their august persons by lice and bed bugs.
The gilded age ended around 1900, give or take a few minutes, thanks to the Progressive Era and Theadore Roosevelt, which instituted controls on industrial giants, banks, brokerages, and the activities of the very, very rich. The 1920s saw waste fraud and abuse under the Harding administration (Teapot Dome scandal--oil and government lands), and there was rampant stock speculation in the late 1920s, ending in the Great Depression. The rampant stock speculation didn't produce a lot of millionaires and it wiped out most of them on October 24, 1929, Black Tuesday. A lot of people were speculating with borrowed money, and when the slide began in the morning, all the speculators suddenly discovered that their stock were worth less than they owed, then it just got worse, and worse and worse.
The economy really didn't recover until 1942, when industrial production was mobilized for WWII.
In fact, it is the rich that are confiscating the work of someone else's lifetime -- their employees. Labor creates all wealth. Capitalists get rich by expropriating for themselves a significant portion of the wealth the workers create. They do this by paying the workers significantly less than the value of the goods they produce.
Quoting fishfry
I think you will find that a lot of children of the super rich are not all that productive--and after all, with their predecessor's wealth, there isn't any need for them to be very productive. Most super rich families are happy if their scions don't piss it all down the drain. There are exceptions, of course.
John D. Rockefeller Junior inherited a huge fortune from his father, JDR, Senior. Junior wasn't interested in the oil business which wasn't the free for all that it had been when his father made his many millions, by hook and crook (quite a bit of crook, actually). Junior did feel obligated to increase the family fortune, and decided real estate was the best bet. He bought up, or signed long-term leases on a batch of land (and run of the mill buildings, mostly) and built Rockefeller Center, in New York. It didn't earn much money right away (the depression, WWII) but after the war it started to yield a profit and still does. (I don't know what it's ownership status is today -- it was a very large multi-block development.)
Nelson Rockefeller, son of JD Junior, went into politics. None of the other Rockefeller children or grandchildren became tycoons of any sort.
Well, actually it is the quintessential step to solving growing inequality. The biggest underlying problem is the regressive tax system which allows great fortunes to be built on the backs of workers and by using publicly owned or subsidized infrastructure--railroads, highways, the internet, locks and dams, nationally defended international trade, etc.
The last step is to distribute the tax revenue among the workers in the form of inexpensive college costs, excellent trade school programs, guaranteed government loans for tuition where needed, supplementation of local school budgets, infrastructure, solid public health programs, research programs into major diseases, social security, and so forth
This won't kill off the rich, and it won't kill off industry. I am not proposing socialism here, just a progressive tax system that enables the government to carry out tasks which guarantee a brighter future for everyone, not just the spoiled brats of rich folk. (Seizure of the assets of the rich, socialism, and the dictatorship by the proletariat has been proposed elsewhere.
PS. Since you are protesting so loudly, we can only assume you are sitting on a significant stash of ill-gotten gains. We'll be coming for your wealth later. If you don't mind, stack it up neatly in boxes. It will make the seizure go faster, and be less inconvenient for you.)
If it worked out that way in practice I might not be so opposed to the idea. But those tax revenues will end up in the hands of government bureaucrats and rent-seeking corporations whose CEOs pay the right bribes to the right politicians. You know this is true.
And as far as guaranteed loans for tuition, we've had those for years. They've resulted in a huge student debt bubble and a huge spike in tuition. If you subsidize tuition, colleges raise tuition to pay for bloated administrations, the banks make a government-guaranteed profit lending the money, and the kids get stuck with the bill. You know this is true as well. The numbers already provide the proof.
Infrastructure? I'm all for it. You think the government doesn't have enough money for infrastructure? They blew trillions on obscene wars. Wars which the left no longer even bothers to oppose. And why is that, by the way? Does it perhaps go back to the day Hillary stood on the floor of the US Senate and spoke passionately for 30 minutes in favor of invading Iraq? That was the end of the anti-war left.
No I am not willing to give the government more money for more crony capitalism and warmongering. I say no.
No, I do not know that that is true. There was a time within my memory (maybe yours too) when college tuition at major universities was quite affordable. In 1980 a mid-level course in the College of Liberal Arts at the University of Minnesota was $80. Fees were a little extra--not much. Now they are several hundred dollars. Why? Because state and federal support of University education was cut by legislators and congress. Government support of higher education dropped from around 75% in the early 70s to 25%. Why? To redirect more revenue to the rich. remember, the 1980s was the reign of Ronald Reagan and dubious supply-side economics.
Marx? Perhaps we'd have to agree to disagree. Marxism has been a disaster everywhere it's been tried. Seen Venezuela lately?
Quoting Bitter Crank
I'm not thinking of the super rich here. Just the regular rich. The silicon valley CEO married to the Palo Alto physician. Their kids go to good schools and learn to start businesses in their teens. Those are the people I'm talking about. The super rich will take care of themselves. You can't take their money. They buy the politicians.
I think unlimited inheritance tends to create aristocracies of wealth and builds inequities which can ultimately bring down governments or lead to autocratic rule. I think that if inheritance monies were shifted back into the economy there would be plenty of money to give all citizens an excellent education, plus much more.
Of course this ain't going to happen, we already have a virtual/actual plutocracy, and I doubt the rich will allow politicians to limit their family money, it's their legacy.
Or those people are ahead in adjusting.
At least that is what I gathered from reading Grassroots Post-Modernism: Remaking the Soil of Cultures, by Gustavo Esteva and Madhu Suri-Prakash (1998 edition).
Just using contemporary America as an example: the republic is only a little more than 200 years old; the enjoyment of the contemporary American lifestyle en masse can probably only be traced to the 1950's. Americans have not had to adjust much. Other than two exact days--December 7, 1941 and September 11, 2001--has U.S. soil ever been touched by an organized assault from foreigners, let alone extensive occupation and oppression?
"Grassroots Post-Modernism" is a riveting book that touches on many themes, and I can't do justice to it here. But I think that one theme is unmistakable: while the West struggles with the consequences of its way of life, the world's oppressed majority are already moving on. The world's oppressed majority has only suffered from the West's, the Global North's, or whatever you want to call its relatively recent way of life. That oppressed majority has resisted the encroachment of that aforementioned way of life and is regenerating their local cultural and natural spaces. The authors illustrate all of this with one people in Mexico who in spite of 500 years of being dominated by outsiders--first the Aztecs, then the Spanish, and since then, the Mexican government, multinational corporations, etc.--have managed to maintain their land, culture and identity.
The thesis of the book may be false. I don't know. But if at least one pair of scholars is asserting--and supporting with plenty of evidence, other sources, and footnotes--that the world's oppressed majority is already moving beyond all of the problems/issues being brought up in this thread, their view should be considered.
Venezuela is a basket case because of grossly bad management. Bad management doesn't work well in any economic system.
Quoting fishfry
"Entrepreneurs don’t have a special gene for risk—they come from families with money" -- Quartz
I don't know any of these people. I have some information (various reading over the years) on what makes the children of Silicon Valley productive entrepreneurs. The matter has been studied: Parents with lots of money have the means to facilitate their children's success.
Inc. and Fortune cited a study in Quartz to the effect...
Cash parentage is the critical factor: parents who have, for good reasons or not, succeeded and accumulated a lot of wealth (rich, but not super-rich, by any means) are in possession of certain characteristics:
1. They have a lot of connections
2. They have a lot of cash
3. They themselves received, and can afford excellent educational experiences for their children
4. They model how financial success operates.
It isn't that Silicon Valley clones are all brilliant people who can hardly fail at whatever they set their minds to. They got in on the ground floor of a new industry and most of them went to colleges and universities (like Stanford) that prepared them to succeed in this kind of industry.
The point is, if you take your average kid from anywhere USA, give him an excellent education, show him how the world works, provide cash to experiment with (a grant, not a loan), and help him accumulate the contacts that privileged people have, HE TOO will be a great success.
Why doesn't Any Kid, USA succeed? People who don't have extra money tend not to take risks. They don't know people with loads of money (especially on equal terms) so they do not learn how to hobnob among this layer of society. They don't have the money to send their children to community colleges, let alone Princeton or Stanford.
It boils down to silver spoons, not gold plated talent.
Even Milton Friedman though a universal basic income was a good idea. How expensive would it be? Maybe not as much as one would think. Those who receive, and really need a basic income are going to spend all the money they get. It will flow back into the economy very rapidly. One of the purposes of the UBI is to enable ordinary people to afford taking risks which they might otherwise not take, to get a better job, earn a better income, get more training, etc.
Yes, some people will use the money to stay at home and spend all day on The Philosophy Forum. That's OK, because they will still have to buy food, clothing, shelter, etc. and that stimulates the economy.
Besides spending, other benefit programs would no longer continue--like unemployment, disability, and the like. The critical factor would be setting the UBI at the appropriate level. It can't be too high or too low. If it's too low, it won't allow people to benefit; if it's too high, the cost-benefit ratio would probably become unfavorable.
Ack! I almost lost my coffee reading your post Cavacava!
If MY choice is to work my entire life, to leave my family set on finances, who the f*#& are you to decide that outside of my spouse, my children will only be entitled to $1 million dollars of my PERSONAL estate, that might be worth well over $20 million? Who is the recipient of the remaining money?
What motivation would there be for me to work that hard in life, pay taxes on that work in life, pay property taxes for the land I own and run my ranch on, which the government will be happy to tax me on while I am living, only to have it taken from me upon my death?
Talk to me about the motivation to work hard enough to employ others, only to have the government take away their very jobs, when I as their employer dies and my estate is decimated.
I am listening....
Quoting ArguingWAristotleTiff
I agree with you. Btw, congratulations for your family's new purchase of a car! (Y)
Quoting Cavacava
Empires are built on blood, since loyalty is only extracted, in the last instance, through blood relations. Limiting inheritance is not a good thing.
What should be limited (or eradicated), should be the possibility for making money out of financial speculation (non-productive activities), or hoarding money without a plan (not putting it to use, above a certain sum of course).
Quoting ArguingWAristotleTiff
Government bureaucrats who never worked a day in their lives X-)
As far as I'm concerned, that is a good development. It means that we (the middle class) are spared of golddiggers - who would want to marry a golddigger anyway?
Quoting Bitter Crank
Well, from my experience, most entrepreneurs do not come from families with money, quite the contrary. Usually "wantrepreneurs" from families with money don't do very well, since they have other interests (sex, drinking, partying, you get the idea). They are like Trump - not great, but they have the support of an already existing empire, which can afford a lot of mistakes. It's good to work with such people, since many times they are stupid with money >:) - they don't realise the value of money.
Any kid could succeed, provided that he really wanted this, and kept at it for long enough. Success in these matters seems to be somewhat elusive - a large share of it seems to be social, just being able to pull sufficient strings. A large part of it also seems to be in the knowledge of which strings to pull. So it takes a lot of trial and error before you really "get it". Like any other practical thing really. It takes time to learn tennis, why wouldn't it take time to learn to be a successful entrepreneur? The hard thing with entrepreneurship, unlike say, tennis, is that no one can really teach you here. There are not many great resources around. It's something you pretty much have to learn on your own. If you can't learn by yourself, well, tough luck.
The problem I think, has to do with living in an equitable society. The current accumulation of wealth seen as a generational effect and not based on labor, in my opinion over time this creates an aristocratic class of non productive, landed gentry.
I think the more equal a society can become, the better off all members of the society are. We are caught in a economy that has created pockets of wealth that own the vast majority of assets in this country, the 1%.
This is empire building as @Agustino quoted:
Do you really want to live in an empire? Under the arbitrary rule of people who have flat out misconceptions of what it is to be poor and struggling....eat the rich.
As far as incentives go, I think such a system would be more productive, and creative. Parents would be much more inclined to care about their children's education, their practical or common sense, and not simply shuffle them off to learn.
Everyone else profits from empires, because they create lasting order, when well-administred.
Quoting Cavacava
That is why they will lose their empire, obviously.
No autocratic/blood/tribal rule can be just regardless of how well ordered, because such rule is always arbitrary.
Existence is arbitrary though. That is precisely part of its beauty. Not to be arbitrary is to be monotonous - it is what Nietzsche would call being nihilistic.
Survival and what we have to do to survive makes us creative. People want a say in how they live their life and they want to be treated fairly. Your bucolic idealization is just that, history has always proved it wrong or is there any doubt that social inequity was a major contributing factor to the French Revolution.
What does being proven wrong by history mean? That it changes and disappears? Then history has proved everything wrong, and it will continue to prove everything wrong (in terms of social organisation that is).
One basic human fact is that people get bored. Another basic human fact is that people like arbitrariness and freedom, and detest being forced to do things. Your utopia of equality, etc. involves (1) maintaining the same regime forever, and (2) forcing people to fit in certain norms. So it will fail, it's against human nature.
My "Utopia" is democracy in which equality is striven for and not stiffed by a rich aristocracy. My "Utopia" is a just society under rules of law. What you have outlined is not, and cannot constitute a just society.
So whoever manipulates others the best ought to govern?
Quoting Cavacava
Will that justice be enforced? At least with a despot you have an enemy, you can go after him. But with the law, who can you go after? That's why the law was invented - nobody is responsible anymore - the law is blamed. The law orders the Nazi officer to yank the Jews out of their homes and to the gas chambers they go... So he knocks on the door "Sorry ma'am. It's the law, I'm forced to now yank you from your home and put you on this train. My apologies, I'm just obeying the law. If you want, you can file a complaint on the train later".
Quoting Cavacava
I agree, I never said it is just.
I like your post.
No democracy is perfect, their are always ways to improve it, such as modification of the way we treat inheritance. Nazism was socialization based so called blood ties, the ideology of the Fuhrer is much closer to what you are talking about, than what I am trying to discuss.
What, exactly, are you intending to be for and against here? Why would you counterpose the Holocaust against law? The nazis made a sham of the law, replacing it with the rule of persons like Hitler, Himmler, Heydrich, et al.
Exactly - so the law is actually only as good as the people behind it. That means that whether it's based on the law, or based on the dictates of a supreme leader, what matters the most is the wisdom of the people behind the system, not the system itself. I also draw attention to the fact that a tyrannical law is worse than a tyrannical dictator since it legitimises tyranny and makes it acceptable.
There never was a golden age of good law, good people, good rulers, good outcomes, of course. But still, most civilized countries manage to have fairly good law, reasonably good people, adequate rulers, and more or less satisfactory outcomes. The Nazi period in Germany was an extreme breakdown in the area of good law, good people... Other countries have had far less extreme breakdowns, but periodically just plain bad people get the upper hand, until they can be beaten back.
Good law represents a consensus by good people of what a good society should be like. The consensus of good law is important.
On the contrary. Everything the Nazis did was strictly according to the law. Of course the law itself became corrupt. Perhaps that's what you meant. But that shows that even the "rule of law" can be problematic. We see such instances in the contemporary news from time to time.
Also I wanted to ask you about your remarks earlier ... are you a classical Marxist? Labor theory of value and all that?
This sounds a bit like the line of questioning in the House Unamerican Activities Committee..."Are you now, or were you ever a member of the Communist Party?"
I suppose so. I think Marx was right when he described the method by which wealth is extracted from workers -- surplus value. (Workers produce more value than they receive in wages. The difference between the wages they are paid and the value of the goods they produce is expropriated by the bourgeoisie owners. [Reality is more elaborate than that, but that's close enough for our purposes here.]
Marx died 30+ years before the Russian Revolution. What happened in Russia depended far more on Lenin and Stalin than it did on Marx. I suppose it depended on 300 years of Romanov despotism, too.
I have been a member of a Marxist political party. Our program was based on the work of Daniel DeLeon (1852 – 1914) and his American interpretation of Marxism. That is, in countries with a strong democratic tradition, workers should (must) use the tools of democracy to achieve a radical restructuring of society. This can be accomplished through industrial union organizing (not trade unionism), intensive political education, extensive political action, and elections. Revolution can be carried out peacefully within a democratic society.
Theoretically, DeLeon was right, but it turned out that the State, Capitol, and Corporations were quite capable of frustrating unions with radical social change in mind. The labor movement faced more concerted and continuous opposition in the United States than in most countries, maybe with the exception of Nazi Germany. The USSR and PRC just banned unionism outright.
The various American Marxist political parties -- from the Communist Party USA, Socialist Workers, Socialist Labor, on to the New Union Party and a few others -- have pretty much subsided. Unionism isn't at an all-time low but it is not far from it. Capitol is triumphant. Working people -- the vast majority of Americans (80% at least) -- have experienced a continual slide in wages and purchasing power since the mid 1970s. Automation, globalism, deskilling jobs, etc. have reshaped the world's workforce including us Americans. There are some winners, a lot of losers in all of the change.
Nothing that has happened, or is happening, invalidates Karl Marx's basic understanding of capitalism. Marx didn't claim that the victory of the working class was inevitable, only that extreme conflict was certain.
What do you, or I, or anyone want to see in a future society? What I'd like to see looks much more like Europe than China; more like Cuba than Central America; more like Vietnam than North Korea...
I'd like to see democratic socialism around the world, and the demise of capitalism. Does that mean the end of creative labor, entrepreneurial type work, a drab, gray world with flat cultures? Hell, no. It does mean that most people come much closer to having there basic+ needs met. Not "middle class" but more than enough to survive on.
Nothing pejorative intended. Just noted some of your previous comments.
I do agree that Marx identified many of the problems of late stage capitalism that we are experiencing now. I don't trust the almighty State. That's why I don't support income redistribution. In theory if the State taxed the rich to provide opportunity for the poor, that would be good. But if you look at the condition of the public schools in poor neighborhoods, you see that it's not working.
We no longer have a functioning system of capitalism. As many have observed, gains are privatized and losses socialized for the politically connected "too big to fail" institutions. The massive money printing by central banks in the past decade is causing massive asset bubbles while the infrastructure collapses and economic inequality worsens.
We need a revolution. I just don't think Marxism is it. But I'd agree with you that something's terribly wrong with our current system.
The rich do get richer but the cake also gets bigger over time.
The state can be good, even now--defining the state as any level of government above the village level: county, metropolitan, state, federal government, international quasi-governmental organizations like the World Bank, International Monetary Fund, or UN. Big states, like the Federal Government, can do a lot of good, or a lot of bad, just because of their size.
Quoting fishfry
Indeed. Since you have a hard-on for the US Government, you will enjoy reading the book The Color of Law: A Forgotten History of how our Government Segregated America -- published 2017. I was shocked to find that de jure (by law) segregation of housing and cities was Federal policy from at least 1935 when the Federal Housing Administration (FHA) was established, and earlier, in other agencies. The rules were explicit: blacks and whites are not to live in the same communities (defined in detail to all white blocks, mixed blocks, and all black blocks).
The FHA rules were struck down in the 1960s by courts and Johnson's housing initiative, but it wasn't until the 1980s that things were really changed, Unfortunately for blacks, it was too late to benefit from the changes. Housing priced had risen out of reach of blacks. They were, to use the technical term, totally screwed,
The effect was enduring impoverishment of blacks, enduring advantages for whites. One of the latter day consequences of this now-abandoned, unconstitutional policy is that blacks and whites remain pretty rigidly segregated, and poverty is concentrated in black communities. Because schools are ultimately organized around housing patterns, the poorest schools receive the poorest children with the most disadvantages, and no surprise, they don't do well.
There isn't any easy or inexpensive way to undo the damage long-term segregation caused. I'm not sure we even know what to do that would be effective. At any rate, it was our government that did it. Was it Roosevelt's idea? Roosevelt was liberal, but the congress was controlled by southern segregationists who were very committed to maintaining segregation. The only way a housing program could be legislated and funded was by excluding blacks. (It wasn't just helping blacks and whites separately, it was more like not helping blacks at all.)
Similarly, most blacks in the south (domestic workers and agricultural workers--about 75-80% of the black workforce in the south) were excluded from Social Security until after WWII.
Anyway, the Color of Law is good -- punchy, well written, good documentation, well edited.
Unfortunately, the cake does not get bigger for everyone, and the share of the cake that the rich get increases faster than the expansion of the cake. See Piketty (économiste français).
Correct me if I'm wrong, but this assertion you make follows this line of logic; equality among society is good, therefore inequality among a society must be bad. I would COMPLETELY disagree with this. Everyone is different. Everyone has differing values, experiences, and perceptions that are all unique to their own individual existence on this Earth. Therefore, claiming everyone should be equal is preposterous! What good does being equal do? Where is the incentive to strive for a better life? Your sense of life purpose would greatly diminish.
What I believe this notion of equality is really getting at is the fundamental difference between the economic philosophies of socialism and capitalism. Both are not perfect, however capitalism is the best choice. In socialism you would want everyone to be equal like you're stating, so wealth is distributed as such. The only problem is is if I had $5 and gave 5 people each a $1 dollar bill the wealth would be distributed evenly, but where is the incentive for those 5 people to go make more?? In contrast, from a capitalist's perspective I would demand each person earn my $1 bills by providing me a service, product, etc. If one person is uninterested or unable to earn my $1 he should NOT get one. Capitalism creates incentive for growth. I WANT more rich people, I WANT big corporations, because guess what both of them do? They hire people!! I've held two jobs my entire life, and you can rest assured both of my bosses were nowhere close to poverty, and that's not a bad thing!
Nobody starts at the same place in life, but one's decisions will determine where they end up. This is the beauty of life. Nobody is the same.. We are all different. Inequality is beautiful, and should be embraced, not stifled with the thought of forced equality.
Quoting Purple Pond
This is totally flawed.
If Bill Gates earns more money today, how do I become poorer tomorrow? There is only less money in the world if I don't work hard, and choose not to take advantage of opportunities. There's no finite amount of dollar bills circulating around. I mean, it's not infinite, but it might as well be. In my opinion this is an example of a psychological case (I believe asserted by Ellis, but please don''t quote me on that) wherein one decides that outside forces are the cause of misfortune, or on the contrary one decides it is one's own self that dictates their destiny. The former leads to a highly neurotic life of self pity and victimization, whereas the latter leads to a highly industrious attitude, and a healthy desire for the betterment of self. The maddening part of all this is you get to choose!! You choose for yourself how you perceive the world. Will the world dictate your life, or will your life dictate your world?
Quoting Purple Pond
Again, I believe this is flawed.
We all have the same 24 hours in a day. Oprah, Bill gates and Tome Cruise are all successful (privileged) people. What got them their success? Is their time more magical than my own? Of course not. What separates these people is HOW they spend their time. Success in this sense, all comes down to productivity. How efficiently and effectively you complete various tasks will determine your relative success over time. I guarantee you all these people I've mentioned have worked 100x more productively in one day than I do in one week. That is why I'm not on their level.
Side note: some people begin life's journey as poor, and end up becoming some of the greatest success stories (Oprah Winfrey)
Others begin life as rich and choose to make bad decisions, and throw it all away.
Why is this? Struggle creates the prize. A caterpillar must struggle in the cocoon before it can develop wings and one day fly. The butterfly who is let go at a premature stage (as i found out as a child) cannot fly. There is purpose in life's struggle. Embrace inequality for it is just one form of struggle.
I may have badly worded my OP but that's not what I believe at all. I don't think we should live in an equal society, nor am I saying that some inequality is necessarily bad.
Quoting Austin Owens
i disagree. What happens when the economy is bad? People start saving and they don't spend it. This is where you feel the effects money not in circulation. If every rich person kept a lot of their money in banks and never spend it, believe me, it would hurt you financially. So yes, if bill gates gets richer the rest of society get's that much poorer.
Quoting Austin Owens
No we don't. Most of us have to spend a good chunk of the day working just to makes ends meet. And who do we work for? Richer people. We're essentially giving them our time. All the while the super-rich practically don't have to spend a minute working. They could just live off their investments. Not to mention all the people spending their time working for them. They have surplus time.
These stories are often publicized and are rare. The reality is that social mobility doesn't usually happen. The rich stay rich, and poor stay poor.
Glad we agree there!
Quoting Purple Pond
I disagree. The 1% of wealth in this country does not move the economy when it's up OR down. The middle class does. For example, a rich person buys 3 or 4 pairs of jeans at a time. That's it for at least a few years. The middle class as a collective purchases hundreds of thousands of pairs. Which one moves the economy? When the middle class has no incentive to spend is when we have a problem. But hey, If more rich people would employ them, they'd have more mulla! See where my affection for the rich comes from?
Quoting Purple Pond
We don't have the same 24 hours? We can at least agree on that as a stand alone statement.
I hear what you're saying. I think you don't take into account the struggles that the rich dealt with to become rich. It's my personal opinion that if you took all the wealth in the world and redistributed it evenly in a decade the same people that were once rich will be rich again. Why? They know how to save and spend their bloody money!
Also, have you ever seen a wealthy person work? (of course I mean one that has created and or maintains their wealth through labor... their will always be the few that live off old money) They work their tails off!! Most rich people could run circles around me with their work ethic. Productivity = success
Does wealth cause happiness? Does being poor mean you will have a horrible life?
What is poor? Technically speaking on a global scale if you live in America with running water and a roof over your head you are the 1% of wealth in the world.
Rich and poor are relative terms. At the end of the day I choose to be thankful for what I have, not envious of what I do not.
The "law" is really an automatisation of justice, much like Bitcoin would be an automatisation of payment systems. If you look at human history the trend is to go from less automatisation to more automatisation. But there is a problem that is often forgotten with moving from less automatisation to more. The more automatisation there is, the more inescapable control there exists, and the less freedom in the real sense of the term. In other words, people are more and more removed from the decision-making process. And the way the system is setup is that those who control what the laws are can always blame the law for the oppression of their brethren - ie, we're just following the law. They no longer have to assume full responsibility.
Quoting fishfry
I was recently working on a mini-project now that I'm on holiday. Developing (programming) a centrally controlled economic system that would allocate resources fairly across the economy and writing a paper for it. There is a relationship between the labor-theory of value and perfect competition under capitalism.
In perfect competition, there are no profits for anyone. That means that price/unit = cost/unit. All costs can be quantified in units of labor-time. Raw materials are also quantified in terms of the time it takes for them to be obtained. So all costs of a firm, not just direct labor, can be quantified in units of labour time. That means that in perfect competition, prices can be quantified in units of labor-time.
If we think fundamentally, what is an economy? It is the allocation of time for the fulfilment of needs. We have a limited pool of time in the economy and infinite needs. Needs are of two categories - essential (we die without them), and wants.
If the economy is formed of one person stuck on an island, then he will need to decide what needs he has, and then prioritise those needs, and then use his time to start fulfilling them one by one (as many as he can). The same idea follows in a group.
So money is really a shadow of time - it is time that is essential. Now, labour-theory of value has a short-coming. It cannot decide how much 1 hour of taxi-driving is worth compared to 1 hour of engineering. Why not? Because it cannot decide which one we need more of - taxi driving or engineering.
(Now, this isn't exactly true. If a centrally planned economy has an exterior - other external economies that it doesn't control - then it can quantify all internal opportunity costs in terms of the prices goods can be traded at externally, and it would work. The problem really comes when there is only ONE centrally planned economy, with no exterior. Imagine your company owned all the resources and all the economy of the entire world - how would you decide what gets produced first, in what quantity, at what price, etc?)
A subjective theory of value is required for that, and to determine it, we only need to make use of the demand curve. How much some participant X is willing to pay for some good Y is a quantification of his subjective need. And the demand curve shows us how much each participant is willing to pay.
We can obtain values that are directly comparable to each other by referencing how much each participant is willing to pay as a percentage of his income or total money. So if I'm willing to pay 90% of my income for good A, and you're willing to pay only 10%, then I need it more than you, even if that 90% may mean $50, and for you 10% may mean $500 in absolute value. That's the very communist version - the more capitalist one is by price, regardless of income or wealth, but we will privilege those who have more money. So call this price, how much each is willing to pay, as subjective price. The former price (the one obtained from labour-theory) will be known as cost of production.
Now, only the goods where subjective price >= cost of production will be produced.
Under this system nobody would own factories, and other means of production. Everyone would submit orders for all products to a central computer. An order consists of the quantity desired, the type of product, and the price/unit one is willing to pay. Participants compete on price - those willing to pay the most will get their orders executed first (the only exception would be everything labelled as essential goods, which will always be sold at the cost of production). This guarantees maximum efficiency of circulation.
How will people be rewarded? Well, we start from the fact that $1 = 1 hour labour-time. Money is all digital, the central computer keeps track of how much money is in the wallet of each participant in the economy, and it can do this, because it processes all orders and has all information. So that's the base salary so to speak. However, since non-essential goods are transacted at subjective price, that means that it is possible for some goods to make a lot more than the labour that went into them. Say good A made $500 in one day, and it took 10 hours to produce the quantity of good A that made $500. That means that good A made $50/hour labourtime. So the production of good A is worth x50 the production of the standard good at the base rate.
The workers who worked those 10 hours, will receive ALL the income after raw materials, etc. have been paid. So that will be how one worker can earn more than another - based on how needed he is, where money is used to quantify the need for him (based on the worth of the products he produces).
Goods will get produced based on price. Those that people are willing to pay most per unit will be produced first.
I have more on this, but any thoughts so far?
Here are sources for both sides of the argument from the Guardian, and from Forbes.
And still, "risk capital" tries to go after things that seem fruitful, ideas from bright people.
And I am a Socialist. In the eyes of most US people at least. But I can see that the Communism created even more poverty than the US did in Latin America during the cold war days.
Karl Popper in his critique of Marx has the clue. The National States. That will moderate the more brutal capitalism with regulation and taxes. In my home country we actually had a revolution. But a slooow one. From 1917 up to the 60´s. Where the trade unions and the social democrats gradually gained more power. In good discussions with the big capitalist families (eg. the Wallenbergs). What we ended up with, Peaking in the 80's was a mixed economy where capitalism was ok, but you had high taxes on eg. inheritance and a lot of regulations. Universities are free of charge. So intelligent kids from humble backgrounds are allowed to rise.
THe situation has become more fuzzy now, with the introduction of Globalisation, with low salary countries coming into play, making the national states and the trade unions toothless. My guess is that this is what sent President Trump to power.
What one would like to arrive at, I think, is NOT a socialism of the equal-for-everyone type. But a TRUE social liberalist world whith something of the Fair Race that Rawls talks about, where people really do what Plato is dreaming of in The Republic, where silver children of gold parents sends those kids to silver lives while gold children of silver parents gets gold lives. And that for the whole world. But as long as people talks about the IQ of Sub-Sahara people, I am sceptical.
Actually, I am a father myself risen to the gold position. And I do not give my teenage kids gold lives for free. Since I am from a Silver background. They have to fight for it. I cannot understand parents that spoil their kids, making them omnipotent while observing that their kids are really mediocre.
Wealth does not give poverty, but richness for all reqiuires institutions stronger than the rich people. As with all questions regarding humans, a compromise is normally the best solution.
But of course, one dreams of a world where everyone does what he or she is most apt to do, and everyone works together. And produces the same results as capitalism. But maybe it is impossible.
No, Austin. Money does not buy happiness-- but money can buy things that significantly improve your quality of life. You are most likely going to be more happy if you can adequately support yourself and your family; if you can afford food, utilities, healthcare, education, transportation, etc.
Take a look at this. And this.
Arguing that we shouldn't be concerned just because we might be comparatively privileged is simply ridiculous. And by the way, having a home and access to water utilities would actually put you in at least the top ~47% globally.
That fits nicely with some thoughts I have.
The risk isn't computers acting like people. The risk is people acting like computers.
Every time you're trying to explain your particular situation to a bureaucrat and they stonewall you with "policy," that's a system that's operating like an algorithm, to the detriment of the human in particular and humanity in general.
Every time a cop shoots an unarmed civilian in a bad shoot and the chief says, "Our officer followed departmental procedures," well DUH, your procedures need to be changed then. You need to train cops not to shoot the wrong people. It's literally impossible to foresee every situation. You have to train people to have a heart, not a flow chart.
Our worry about AI is misplaced. We need to start looking at the way we treat each other. No computer could be any worse to us than we already are.
Quoting Agustino
Well see now I'm confused. To me this is a recipe for failure. You have to let the system make decisions organically from the bottom up. Top down control has been a bloody awful failure in China and the Soviet Union and Venezuela and Cuba. I don't understand how one could advocate for this and still hope to have a human society.
I think what I'm saying is that making society run by rules is totalitarianism when our current techno-society does it; and it's totalitarian when Marxist idealists imagine you could ever run a world like this.
Top down doesn't work. You want to empower from the bottom up. You want to program humanity into your system. And the only way to program humanity is to not program humanity at all.
Yes. Recently I have had quite some trouble with my local banker for exactly this reason. Nobody is willing to take responsibility, they all blame the procedures, shrug their shoulders, and say there's nothing they can do. Or one decision-maker sends you to another decision-maker who sends you back to the first decision-maker >:O .
Quoting fishfry
It's not top-down. It is true that the computer decides what gets produced, but it decides so based on the quantified will of the people. If there are two orders, for product A and product B, and there aren't enough resources to produce both, then the one with the higher price will get produced first. So if someone is willing to pay more for A, that is a suggestion that relative to B, A is worth more.
This is not necessarily the case. In recent times the money supply has been so restricted that banks were talking about negative interest.
But sovereign bodies have the right to create (out of thin air) as much money as they think the economy needs. So effectively there is no limit to the amount of money.