Wealth inequality is root cause of all current economic woes. Interview. [video]

https://www.youtube.com/watch?v=DVvoyRpxG-A

by scotty79 • 2 years ago

27 54 2 years ago

kelseyfrog2• 2 years ago

What's an acceptable level of wealth inequality?

aappleby• 2 years ago

How much of the global resource pile can you realistically consume in a year, assuming you ate and drank and traveled as much as you were physically capable of?

j7ake2• 2 years ago

If the bottom have their needs met (food, housing, health care, education, day care) then any wealth inequality is acceptable.

yehoe• 2 years ago

Personally not sure I find one Bezos to be worth much.

Point to a billionaire and I’ll show you a coddled idiot who couldn’t grow their own food.

The top, if there must be one, should be the people wearing out their bodies to make the roads and grow the food.

Office workers munging numbers around is not worth much to the real economy that requires construction and production of real things.

Why should a rich person have the ability to burn more fossil fuels?

Nah we need a more scientific method for economics. Perhaps constraints built on how much a lifestyle pollutes?

darthrupert• 2 years ago

If money was all that it's about, I would agree. Unfortunately, money can be transferred into power.

latency-guy26• 2 years ago

Which bottom? The bottom that works full time? The bottom that has some level of employment? The bottom that has no interest in employment? The bottom that does not do anything at all except exist? The bottom that is antagonistic to remainder of society?

If you are not specific, then you do not have a position.

gizmo• 2 years ago

You can’t have any kind of democracy with that kind of wealth inequality. There’s more to society than just offering subsistence to the common people.

musicale• 2 years ago

So basically food + all of the things that are expensive and greatly outpace inflation.

tmnvix5• 2 years ago

A typical response to this issue is "why does it matter to you if someone else has more than you do?" - framing the issue as essentially envy. The obvious problem here is that it really is largely a zero-sum game. A dollar represents a claim on the world's resources, which are limited.

Capitalism is an effective system for motivating productive activity, but it also has an inherent tendency to concentrate wealth.

If we want to avoid a situation where a few people control such a large proportion of the world's resources that there is not enough left over to meet the needs of others, then we need to balance this tendency. Income taxes are one approach, but wealth taxes deal with the actual issue.

Taxing wealth is not unfair if you accept that the economic system we have chosen is itself unfair. We give too many advantages to those that gather income through owning things (i.e. unearned income) compared with those that engage in productive activity (i.e. earned income).

I say we 'give' those advantages because they are not due to some inherent law of nature. It is a choice we have made as a society. In the natural world hoarding works in the opposite way. A stash of nuts doesn't magically grow. Quite the opposite. Real effort has to be expended to preserve the stash.

thegrim33• 2 years ago

The economy would be a zero sum game if there was exactly X amount of dollars in circulation every year that people were fighting over, if the same X dollars kept changing hands. That is not the case. The economy expands and contracts. The amount of money in circulation expands by an average of 5-6% per year. The pie grows every year. If you can't even get something that basic correct in your analysis it kind of invalidates all of the rest of your ideas.

tmnvix5• 2 years ago

The amount of money in circulation expands by an average of 5-6% per year.

I think you have to ask yourself where this newly minted money ends up first. I think you'll find that it largely just increases the nominal value of assets.

The pie grows every year.

The 'pie' is the world's resources - not the money. If new money essentially just increases the nominal value of assets it doesn't invalidate what I've said. Quite the opposite. An increase in the money supply exacerbates wealth inequality as can be seen recently with historically low interest rates.

latency-guy26• 2 years ago

Give me a definition for fairness and I will find billions of people in this world who will disagree with you.

colonCapitalDee• 2 years ago

The world is not zero sum! The average human is better off now then they were any number of decades ago, and things have improved for those on the bottom even more. 38% of the world lived in extreme poverty in 1990, by 2019 that number was down to 9%. In that same time frame access to basic sanitation increased from 32% to 56%, life expectancy increased from 64 years to 71 years, and so on with various of quality of life statistics.

Designing an economic system for "fairness" is a horrible idea. I would rather live in an economic system with high inequality, high standards of living, and high social mobility, than in a system with low inequality, low standards of living, and low social mobility. Inequality is bad in the same way that debt or medicine is bad: the danger is in the dose. A society with extreme inequality is probably screwed, but a society with moderate inequality is not necessarily worse off than a society with low inequality.

Wealth taxes have been tried many times, they don't work very well.

In the natural world hoarding works in the opposite way. A stash of nuts doesn't magically grow. Quite the opposite. Real effort has to be expended to preserve the stash.

So you would prefer to spend your time roaming the forest in proletariat ecstasy looking for more nuts, rather than using the nuts to plant some trees?

cycomanic4• 2 years ago

The whole point being made in the video (which I think very few here actually watched) is that the only ones who benefit from this contracting/expanding are the top 1% (realistically more like 0.1%).

If the economy is growing (not a zero sum game as you say), but the economic ability to own assets is decreasing then you are creating a situation where after some time all assets are owned by only very few. I'm not sure if you consider that a good basis for society. I certainly would prefer my children not to live in a cyberpunk distopia.

tmnvix5• 2 years ago

So you would prefer to spend your time roaming the forest in proletariat ecstasy looking for more nuts, rather than using the nuts to plant some trees?

Planting trees would be productive activity, not hoarding. This is exactly the type of behaviour that should be rewarded. Of course, we need people to have access to resources in order to engage in productive activity (in this case land).

Regarding your comment about the world not being zero sum, I agree to an extent (hence my comment that it is largely zero sum). Obviously we can - through productive activity - 'create wealth' in many ways. Another commenter gave the example of turning sand into silicon chips. My concern though - and where I think a zero sum situation exists - is with those resources that are fundamental to security, agency, and well being like land and clean water. I don't want my children to grow up in a world where they live to 120 but all of those resources are already hoarded and the prices are so high that they have little to no chance of getting a share. A world where only a few have access to use natural resources for their own benefit is a crappy world however you look at it.

Wealth taxes have been tried many times, they don't work very well.

There's a whole debate to be had here, but I think I'll just say that I don't think that this is the case.

tmnvix5• 2 years ago

Interesting comment on the accommodation crisis.

I speak to people a lot about what the economy is like where they are from. Every single person in the world thinks there is a massive house price crisis caused specifically by the planning system in the city they live in. People in New York think this. People in London think this. People in San Francisco think this. People in LA think this. People in Tokyo think this. People in Shanghai think this. People in Sydney think this. People in Vancouver think this. People in Toronto think this. People in Rio de Janeiro think this, right? It's a fucking global problem. It's not even just - look at stock prices - every asset in the world has gone through the fucking roof. This is a problem about asset prices broadly and it's clearly global.

shreyansh_k10• 2 years ago

It seems that we tend to treat wealth inequality as some sort of judgement of fairness and unfairness. That is: the lower wealth inequality, the more fair.

I think projecting the quality of fairness is a false hope.

The Dutch are the tallest people in the world and Asians tend to be the smallest. Remember that oxygen and food are also resources in the world. Consequently, the Dutch inherently use more food and oxygen to maintain their bigger bodies compared to the Asians.

As such, it is unfair to an Asian person that their Dutch friend use so much more, if we were to judge them based on fairness.

Now, just to mess with the reader's mind, I'll flip my own case by saying that since there are many more Asians than the Dutch, it's unfair to the Dutch that Asians consume so much of food and oxygen.

I hope that the reader gets my point that projection of any sort of fairness is an exercise in vain.

I think that if we want to grow up, we need to grow beyond fairness and unfairness. We need to looks for things beyond these realms of false projection.

Personally, I have accepted the idea that some people have more wealth than others and some less. I neither despise those people nor I love them. I feel content with whatever life has given me. Now, that is not to say that I don't desire to be richer. I do and I continue to act in my own favour. It's just that I do not feel sad that I have less than others or hate someone if they are richer.

cycomanic4• 2 years ago

I don't know what your argument about tallness is supposed to mean. Fairness has nothing to do with people being equal in physical attributes, however it does have to do with being equal in front of the law and how to influence law and the ability to improve one's economic situation (or the chance to loose it).

That is what is being eroded by the wealth inequality. The wealthy are significantly insulated from the law, are shaping laws that further reduce their chance of loosing wealth, increasing their wealth in the process and reducing everyone else's economic opportunity.

For a society this creates an unstable situation, if all economic (and political) power sits in the hands of only a few that creates unrest often leading to a violent overturn of the situation (or trying to counteract via totalitarian measures).

As a side note, you say you're content with not being wealthy, but how far would this content stretch, would you be content if you are so poor that you'd struggle to feed your kids?

MrJohz2• 2 years ago

It's also a poor analogy in that the average Dutch person is around 15% taller than the average person in Timor-Leste, which Google informs me has the smallest height difference. If the disparity in wealth were on the order of 15%, I don't think there'd be nearly as much complaint.

Instead, in many countries, it's not uncommon for some people to be sitting on a hundred, a thousand, even a million times as much money as others. The disparity is so great that it's difficult to fully visualise - hence why you get videos of people like Tom Scott driving around trying to demonstrate just how different these sorts of numbers are.

More importantly, wealth scales in a strange way. Becoming a billionaire didn't just entitle you to more exotic holidays or vehicles or mansions than your millionaire peers, it brings incredible ability to influence politics and the world, with next to no accountability from the people whose lives you are affecting. You can buy media companies on a whim. You can demand meetings with politicians. You can make economic threats in order to get your own way. And, unlike politicians, there is no democratic process to elect you or remove you.

The analogy is, therefore, absurd. The premise is that, if you have an issue with wealth inequality, you have an issue with inequality universally, at all scales. But it misses the point that the issue with wealth inequality isn't that the numbers aren't an identical, it's that extreme wealth actively causes problems.

shreyansh_k10• 2 years ago

I hear your thoughts on equality before the law and everything. I think it is coming with a good motivation, cute even, but, dare I say, not everybody deserves to be treated equally, if we were even willing to tussle for the sake of equality (and by extension, fairness, see my previous comment).

There are capitalists in this world. There are communists in this world. There are Christians in this world. There are Muslims in this world.

I'm not taking any sides. I'm just saying that it is impossible for all of them to be right... Because they are mutually exclusive ideologies/religions. Someone is bound to be wrong. Therefore, someone deserves to be treated poorly by the law. Infact, dare I say, all these 4 groups are being a bit childish. Also, "totalitarian" is also another such group. Anyway, personally, for the current situation of the world, I think that the world needs at least one adult leader at the helm. In other words, dare I say, a single leader. No, definitely not someone who believes in totalitarianism.

Finally, personally, I think that if I fail to feed my children properly, then, it's either a failure on the part of society to educate me properly or to manage the resources. I am, afterall, a product my society.

pydry5• 2 years ago

Using nihilism to defend wealth inequality is certainly a new one.

shreyansh_k10• 2 years ago

No. Not nihilism. Neither do I participate in nor promote nihilism.

thomassmith65• 2 years ago

  I think that if we want to grow up, we need to grow beyond fairness and unfairness.

Fair or unfair... it's nice to live in a region where one can leave their house without stepping over homeless people, without having one's car stolen or vandalized, without one worrying about being mugged, and where one's surroundings are vibrant and picturesque. That is not life in a country with high wealth inequality.

shreyansh_k10• 2 years ago

I'm going to tell you a story. A story, I'm afraid, that might leave you even more confused. But, I hope it serve us well.

Sometime in the 1960s (don't quote me on the year), there was plenty of scientific research coming out that cholesterol is bad for your heart's health. Doctors were recommending to completely avoid cholesterol. Governments were in the process of banning it.

It got so bad that for decades people were avoiding food with cholesterol like plague. Companies were actively seeking to substitute it with other things or artificially remove it from their products.

Then, I think in the 2000s (again, don't quote), to everyone's surprise, research started coming out that there seem to be even stronger links of those heart disease with trans fat.

So much so that trans fat actually got banned across countries in the world by many governments by 2010s. Even higher that cholesterol.

Anyway, upon reviewing the old research about cholesterol, researchers learnt that food with high trans fats also tends to be high in cholesterol. I mean, it makes sense, they are both fats... And most food have a complex combination of many fats (among other things). But really, the cause was not cholesterol, it was trans fat.

So, in the cross fire between reasoning (and heart disease) and evidence (caused by trans fat), cholesterol got shot, for no good reason.

drekipus• 2 years ago

This is actually a pretty good take when it comes down to it.

I'm reminded of the "businessman and the fisherman" parable.

Wealth and GDP isn't everything. And they definitely aren't moral judgements. People don't just deserve to have more because they have little to start with.

I'm trying to pull my sister and her family out of poverty; the partner doesn't want to work any more than mowing lawns, and they go to the beach on Sundays. That's all they want out of life

anon-sre-srm• 2 years ago

Infographics: Wealth Inequality in America (2018)

https://youtu.be/EZRFVjU2IWs

America is similar to Brazil and Mexico, but it's a third-world country politically with mostly soft, misguided, uneducated voters who don't realize how badly they're mistreated unable or unwilling to take effective corrective actions to address the root causes. Jan 9 riots, conspiracy theories, political complaints about one party or another, bikeshedding, and flashpoint issues absorb and express this discontent ineffectively. Unfortunately, economic inequality cannot be reformed from within (see also: John McCain) when the political operating system is absurdly polluted and usurped by billionaires intent on maintaining the status quo feudal lobbying system that anoints celebrities to high office with media buys in exchange for access and influence. Nonviolent, massive, sustained pressure is the only way to force out the corrupt, bribed officials and attain revolutionary campaign finance reform.

originalvichy• 2 years ago

Anyone who has played an MMO with money mechanics should walk away with a good understanding of what happens with small changes to market mechanics through game devs’ changes.

Everyone who understands the same mechanics should also get why giving more wealth to people who don’t move it would collapse the base structuresnof money flows. I can’t believe how 15 year old me understood that very high earners (owners) should be taxed hard because they have zero incentive to use their money after they reach the ”end game”. Even in IT I see DINK/single colleagues buy everything they wanted years ago, and put big sums (relative to average earners) to stocks and funds. They understandably don’t have lavish spending habits so they just feed an engine that is degrees detached from the basic exchange of goods and services.

The metagame is simply to put money away into a safe scheme and not spend it towards others’ wages with services (restaurants or events) but stocks and large investment funds. At some point the money missing from the circulation just hollows out the lower rungs of the economy, especially when bigger fish keep eating the small fish: no small grocer survives against the big boys, so even that daily spend at the store goes to megacorps.

As with MMOs, we need game mechanics changes that radically slow down the built in feature of capitalism: snowballing accumulation of wealth that sucks the market dry of competitors.

EchoChamberMan2• 2 years ago

Trickle down economics is a scam.

Wealth inequality is root cause of all current economic woes. Interview. [video]

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