My point is that a lot of people have this Atlas Shrugged view of the world, where the noble entrepreneur is lashed to earth by envious, regulation loving, Democratic bureaucrats. But if take that view, then we'll get rid of regulations that are really useful and save lives. You're already seeing this with the rollback of environmental regs. The regulations that stifle innovation are written by "captains of industry" themselves, because manipulation of government via corruption is way easier and far more predictable than R&D/innovation.
So my point is you're missing the point. The symptom is regulation but many regulations are very important. We need anticorruption legislation, we need to break up monopolies, and we need a wealth tax so people can't just strike gold (or cheat people who strike gold), invest in existing ossified industries, rake in cap gains/rent while contributing absolutely nothing, and corrupt our political system with their wealth (and demand that the companies they've invested in also do so in the name of shareholder profits) in order to protect it.
> My point is that a lot of people have this Atlas Shrugged view of the world, where the noble entrepreneur is lashed to earth by envious, regulation loving, Democratic bureaucrats. But if take that view, then we'll get rid of regulations that are really useful and save lives. You're already seeing this with the rollback of environmental regs. The regulations that stifle innovation are written by "captains of industry" themselves, because manipulation of government via corruption is way easier and far more predictable than R&D/innovation.
The problem is bad regulation. We need to keep good regulations, and eliminate bad ones. At the end of the day, the problem is still regulation, as I said.
> So my point is you're missing the point. The symptom is regulation but many regulations are very important. We need anticorruption legislation, we need to break up monopolies, and we need a wealth tax so people can't just strike gold (or cheat people who strike gold), invest in existing ossified industries, rake in cap gains/rent while contributing absolutely nothing, and corrupt our political system with their wealth (and demand that the companies they've invested in also do so in the name of shareholder profits) in order to protect it.
Your policy prescriptions here are entirely orthogonal to the problem of moving society forward technologically. You may want a wealth tax because you don't like inequality, but it isn't going to do any good for the technological development of the world. To do that, you need to streamline the regulatory state.
No, the problem is corruption resulting in, among other pretty bad things, ladder pulling regulation.
> You may want a wealth tax because you don't like inequality, but it isn't going to do any good for the technological development of the world.
Study after study has shown that income and wealth inequality stifles innovation (again among some other pretty bad things). This makes sense if you think about it: the next Archimedes can't innovate because she's preoccupied with how to pay for her sister's insulin.
In fact all my policy prescriptions are focused on innovation, because that's the topic of this thread. Antitrust laws are specifically set up to encourage innovation.
I know you really want to focus on regulation as the big bad, but it's just a symptom of a much larger bad: corruption.
> This makes sense if you think about it: the next Archimedes can't innovate because she's preoccupied with how to pay for her sister's insulin.
Your example is poverty, not inequality. This is a trick people play all the time. They say 'inequality', and then they describe poverty. Poverty certainly reduces innovation. Poverty causes all sorts of issues that reduce intellectual and social achievement. However, inequality and poverty are not the same thing.
Inequality is an inevitable consequence of innovation, in a capitalist society. But inequality does not have to mean poverty for the bottom decile. What we want is a society where those who are able to, work extremely hard to make the world better, and in return are rewarded with a luxurious high-status lifestyle. But those who are not so gifted, or those who choose not to work so hard, are still provided for adequately. IMO the focus on inequality per se is a red herring. It doesn't matter if Jeff Bezos has 100 trillion dollars, as long as his warehouse workers have a decent life.
I think you might respond by saying something about how large concentrations of wealth inevitably influence politics, and inevitably corrupt everything they touch. I can't speak to the latter, but to the former, I found this enlightening:
> In fact all my policy prescriptions are focused on innovation, because that's the topic of this thread. Antitrust laws are specifically set up to encourage innovation.
> I know you really want to focus on regulation as the big bad, but it's just a symptom of a much larger bad: corruption.
'Corruption' is sufficiently non-specific to be meaningless. Saying the problem is 'corruption' prescribes nothing at all. Corruption literally just means "bad things happening to stuff", so of course, it is always to blame when things aren't going well.
The question at hand is: how do you fix it? Saying "fix corruption" certainly isn't the answer. My guess is you'll respond by saying "fix inequality", but you'll forget to add exactly how that would go on to fix "corruption".
No that study explores innovation as a cause of inequality. Which is still bad but not what we're talking about here.
> Your example is poverty, not inequality. This is a trick people play all the time.
Oh so this is your point [1]. No I'm not talking about any inequality, that's a ridiculous strawman (and seemingly wrong, judging by other sources inequality and not poverty is still bad for growth). I'm talking about bonkers levels of inequality causing incomes to stagnate while capital gains skyrocket, leaving tons of money in the investment accounts of the rich and not in the savings accounts of the 99% of the rest of us. Wealthy people by and large don't invest in innovation (look at the share of SV VC money for example), they hoard it, which undermines pretty much all of right-wing economic theory. The only policy measure that will fix this is taxation.
I've done a little [2] token [3] googling [4] for [5] you. This one [6] is a pretty good high level survey if you just want an overview.
> It doesn't matter if Jeff Bezos has 100 trillion dollars, as long as his warehouse workers have a decent life.
Agree; I don't find wealth immoral or unethical on its own. I do find it immoral under capitalism, where by definition profit comes from exploitation (plundering the commons, upselling labor, etc.) And I don't see a better way to provide for Bezos' workers other than by taxing his immense wealth, which he got from their labor besides.
> Slate Star Codex stuff
There's so little money in politics because the wealthy and their corporations are already getting what they want. The false premise of this exposition is that these entities are in competition with each other. They're not, they're colluding. You'll see these numbers spike when big events happen, Deepwater Horizon, etc., and that's to keep the family whole during a troubled time--just like unions during a strike.
> 'Corruption' is sufficiently non-specific to be meaningless. Saying the problem is 'corruption' prescribes nothing at all.
No, when I say corruption I mean a very specific thing: bribing elected officials for special treatment. There's a whole index called the "Corruption Perception Index" to track the public's perception of corruption (which is damaging in and of itself), and there are studies [7] that measure it [8] more fully.
These issues are complex and have deep roots. That's why I've been so tenacious in disagreeing with you about regulations being the cause of our troubles. If we're gonna kill this weed, we've gotta pull it up entirely.
> No that study explores innovation as a cause of inequality. Which is still bad but not what we're talking about here.
It shows that inequality and innovation are correlated across the globe. There is no way to disentangle causality there, and it almost certainly flows in both directions.
> Oh so this is your point [1]. No I'm not talking about any inequality, that's a ridiculous strawman (and seemingly wrong, judging by other sources inequality and not poverty is still bad for growth). I'm talking about bonkers levels of inequality causing incomes to stagnate while capital gains skyrocket, leaving tons of money in the investment accounts of the rich and not in the savings accounts of the 99% of the rest of us. Wealthy people by and large don't invest in innovation (look at the share of SV VC money for example), they hoard it, which undermines pretty much all of right-wing economic theory. The only policy measure that will fix this is taxation.
No, what it's clear you aren't talking about is inequality at all. If you look at the heading of the very first link you sent, it states my point, in the same words!
You are talking about economic mobility.
> Agree; I don't find wealth immoral or unethical on its own. I do find it immoral under capitalism, where by definition profit comes from exploitation (plundering the commons, upselling labor, etc.) And I don't see a better way to provide for Bezos' workers other than by taxing his immense wealth, which he got from their labor besides.
So you think all labor relations are inherently exploitation? People are incapable of agreeing to exchange their labor for money?
> No, when I say corruption I mean a very specific thing: bribing elected officials for special treatment. There's a whole index called the "Corruption Perception Index" to track the public's perception of corruption (which is damaging in and of itself), and there are studies [7] that measure it [8] more fully.
Sure, but in what way is this corruption blocking the building that Andresen is talking about? I can point you to a myriad of ways in which regulation is doing so. But it's not obvious at all to me that corruption comes into play at all.
> If you look at the heading of the very first link you sent, it states my point, in the same words!
Yeah that was my point. The Cato Institute is a biased, partisan think tank and not a credible source. But let's dig into it.
> Poverty may fall as wealth inequality rises, such as when entrepreneurs build fortunes by generating economic growth. Or poverty may rise as wealth inequality rises, such as when crony capitalists gain preferences that distort the economy and reduce growth.
Entrepreneurs building vast fortunes (I'm not talking about a few million, but hundreds of millions or billions of dollars) is a bug, and in a country where many people choose between meds and food deeply immoral. We should redistribute that wealth.
The second point is actually my point, and while I'd like them to cite something (there are weird strategic cites throughout), I'll take it. But I'd like to reemphasize this real quick: "poverty may rise as wealth inequality rises, such as when crony capitalists gain preferences that distort the economy and reduce growth". That's the whole ballgame right there, crony capitalism increases wealth inequality and reduces growth.
> High poverty levels, which are clearly undesirable, are often caused by bad policies, such as a lack of open markets and equal treatment. Wealth inequality is different—it cannot be judged good or bad by itself because it may reflect either a growing economy that is lifting all boats or a shrinking economy caused by corruption.
The US has one of the most free markets in the world, and yet over 20% of our children live in poverty. A lack of open markets is not the cause of poverty. An unwillingness to redistribute income and wealth is.
> WhatsApp... created huge value for consumers by reducing communication costs
There is no cite for this. It's far more likely it was worth that money to Facebook to corner the messaging market, which provided no value whatsoever but did lead to less market choice.
> Jason Furman, the former chair of President Barack Obama’s Council of Economic Advisers, was right to praise the company as a “progressive success story” for its role in reducing prices.
Right-wing economists trot this out all the time, but he wrote that in 2005 and it's a weird appeal to authority besides. A more modern discussion is here [1]. Here's a quote:
> Vedder didn’t seem to hold Walmart responsible for the economic situation its workers faced. Rather, he argued that it’s just economic reality: “Not everybody is going to be in the middle class. Not everyone has the skill sets to do this ... Are there some people in poverty because of low wages? Yes. Will there always be? Yes. In every society, there’s going to be some people making more than others. It’s naive to say, ‘Let’s pay the low-income people more.’”
The consensus is that Wal-Mart being good or bad is irrelevant, whatever it is is a function of capitalism. That's pretty bleak. Wal-Mart's also a terrible example because of the labor and health care costs it farms off onto the federal government. When we defend their actions and their effect on the economy as capitalism working as intended, "entity that's demonstratively destructive to local businesses and wages, hugely burdensome to the welfare state, but uniquely enriching to its owners" says it all.
> Clearly, recent gains by the top 1 percent have not come at the expense of other Americans.
This is, and I'm gonna use this term specifically here, "super false" [2].
> [Gini coefficients] do not support the idea that wealth inequality is bad for [income, life expectancy, and education levels]
That's because using them in that way leads to a correlation/causation fallacy. If you want better information on this, look at life expectancy and education outcomes by income. You probably don't need to though, because you can guess they decline as income declines.
> A Credit Suisse study found that the share of global household wealth owned by the top 1 percent of households worldwide was roughly unchanged between 2000 and 2018.
This paper cherry-picks like crazy. Let me quote you something from the very first page of this study: "The bottom half of wealth holders collectively accounted for less than 1% of total global wealth in mid-2019, while the richest 10% own 82% of global wealth and the top 1% alone own 45%." So yeah, maybe it is unchanged. It's still insanely high.
> Yet commentators on the political left seem more concerned that some countries with broadly rising incomes have experienced increases in wealth inequality. This seems like “spiteful egalitarianism,” as Feldstein called it. That is, a knee‐ jerk dislike of the wealthy even when their wealth stems from productive activities that benefit the overall economy.
Besides being pretty clear ad-hominem, my actual position here is that it's impossible for Bezos to contribute ~.85% of US GDP [3] and it's a bug we should fix with taxes.
I could go on. But in short, this presentation isn't a good faith argument. It uses multiple fallacies and cherry-picks data to further its political agenda. It's not unique to that section, or that presentation. It's what The Cato Institute does.
~~~
> It shows that inequality and innovation are correlated across the globe. There is no way to disentangle causality there, and it almost certainly flows in both directions.
Agree that it's a vicious cycle and requires some kind of intervention to fix.
> So you think all labor relations are inherently exploitation? People are incapable of agreeing to exchange their labor for money?
I think that the labor market is fundamentally coercive and exploitative, yes. When one party needs shelter, food, and medicine and the other just needs a warm body to drive a truck, those parties are not on equal footing and the relationship is coercive. That's why businesses are against things like social welfare programs, Medicare for all, labor standards, and collective bargaining and for things like right to work, independent contracting, and arbitration. Even companies that hire highly skilled workers like SWEs collude to suppress wages (Adobe, Apple, Google, and Intel). Look at the list of things businesses are against and for, which are the ones we have? I wonder why that is.
> The second point is actually my point, and while I'd like them to cite something (there are weird strategic cites throughout), I'll take it. But I'd like to reemphasize this real quick: "poverty may rise as wealth inequality rises, such as when crony capitalists gain preferences that distort the economy and reduce growth". That's the whole ballgame right there, crony capitalism increases wealth inequality and reduces growth.
No. You are twisting the discussion here. Inequality is not the problem. It is a problem when crony capitalism is the source of inequality, on that you, I, and the cato institute agree. Inequality can be a symptom of a broken system, but it is not necessarily a symptom of a broken system. And so inequality is not the measure you should be looking at. What you should care about is the source of that inequality.
> The consensus is that Wal-Mart being good or bad is irrelevant, whatever it is is a function of capitalism. That's pretty bleak. Wal-Mart's also a terrible example because of the labor and health care costs it farms off onto the federal government. When we defend their actions and their effect on the economy as capitalism working as intended, "entity that's demonstratively destructive to local businesses and wages, hugely burdensome to the welfare state, but uniquely enriching to its owners" says it all.
Walmart doesn't farm labor and healthcare costs off to the government. Walmart is not responsible for the wellbeing of its employees, it is not their parents. Society has decided it wants to institute certain minimum standards of living for people, and we enact those standards through the proper channels: government. Walmart is then free to hire those people. That does not mean Walmart has accepted responsibility for their well-being.
> That's because using them in that way leads to a correlation/causation fallacy. If you want better information on this, look at life expectancy and education outcomes by income. You probably don't need to though, because you can guess they decline as income declines.
You're saying a lot of stuff here without really supporting it. You don't get to cherry pick which correlations you like and which you don't. If you want to say that inequality causes these things, prove it. But the fact of the matter is that inequality and innovation correlate strongly across countries, which pretty soundly refutes your original point: that inequality stifles innovation. Now, there may be more to that story, like reverse causality, or other confounding factors. We certainly haven't proven that inequality causes innovation. But we have established pretty well that causality does not flow in the other direction, which was was your original point.
> I could go on. But in short, this presentation isn't a good faith argument. It uses multiple fallacies and cherry-picks data to further its political agenda. It's not unique to that section, or that presentation. It's what The Cato Institute does.
I didn't provide the link, you did. I have no vested interest in that particular source. I'm just telling you what your own source says.
> I think that the labor market is fundamentally coercive and exploitative, yes. When one party needs shelter, food, and medicine and the other just needs a warm body to drive a truck, those parties are not on equal footing and the relationship is coercive. That's why businesses are against things like social welfare programs, Medicare for all, labor standards, and collective bargaining and for things like right to work, independent contracting, and arbitration. Even companies that hire highly skilled workers like SWEs collude to suppress wages (Adobe, Apple, Google, and Intel). Look at the list of things businesses are against and for, which are the ones we have? I wonder why that is.
If you want to enjoy the fruits of society, it seems reasonable to ask you to contribute to it. If you want to go and live in a cave and forage for food in the forest, that seems fine too. But if you want to live in a home built by other humans, and eat food farmed and transported to you by other humans, you are placing demands on the labor of others. What entitles you to that labor if not the exchange of your own? Of course, that then raises the simple question: how much of the labor of others should you get in exchange for yours? Well, we've come up with a whole system for answering that question, one that works pretty well and has elegant answers to that question. I don't doubt that there are others, but it's probably a good idea to fully understand why the one we have works before trying to tear it down.
How can you still say that when the crisis show us that critical jobs are underpaid, sometimes practically slave labor.
Your arguments get countered every single time in this thread, so I'm not surprised he or she didn't reply to you anymore
> How can you still say that when the crisis show us that critical jobs are underpaid, sometimes practically slave labor. Your arguments get countered every single time in this thread, so I'm not surprised he or she didn't reply to you anymore
Economists have studied the question of value basically since the founding of economics. Many ideas have been proposed and rejected. The one you are probably subscribing to is something like Marx's "Labor theory of value".
I could write an argument explaining why the labor theory of value is wrong, but you can just read the Criticisms section on Wikipedia, which will do a better job of it than I could:
If you want to assert that some job is "under paid", you have to have a reference valuation that the current compensation is "under" with respect to. The perspective of modern economists is that value comes from "marginal utility":
Yeah that's an interesting area of study. I do buy the criticisms though, and personally I think that propaganda plays a bigger role. The vast majority of Americans have no idea what their government is doing, and they rely either on inadequate or hyper-partisan, biased media to keep them informed. But those sources aren't there to inform them, they're there to polarize them so they get to the polls. It's pretty classic authoritarianism: blame some outside group, froth up the public to support you so you can implement your corrupt agenda.
I realize this sounds... super cynical and tin foil hat but, maybe that speaks to the seriousness of our situation. If there's tech out there that can fix it, I'm all ears.
So my point is you're missing the point. The symptom is regulation but many regulations are very important. We need anticorruption legislation, we need to break up monopolies, and we need a wealth tax so people can't just strike gold (or cheat people who strike gold), invest in existing ossified industries, rake in cap gains/rent while contributing absolutely nothing, and corrupt our political system with their wealth (and demand that the companies they've invested in also do so in the name of shareholder profits) in order to protect it.