
Piketty's Terrifying Dystopia - jamesbritt
http://falkenblog.blogspot.com/2014/07/pikettys-terrifying-dystopia_27.html
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blackhole
After reading this, I am more convinced than ever that macroeconomics has no
bloody idea what the hell is going on. We have a bunch of fancy models and
then argue over whose model is the least broken.

~~~
georgemcbay
Yeah.

Macroeconomics is almost entirely faith-based and people generally just
believe the version that meshes with their overall political view.

It is pretty easy to see this just watching the back and forth that occurs
after someone (whether a random internet forum poster, or a Nobel Prize winner
in economics) makes some claim about how policy should be modified (or not) to
meet an economic goal. Approximately 50% of people (again, both including
random internet people AND those who are highly educated in the field) will
nod and the other 50% will be convinced the person who made the claim has no
idea how economics works.

While this seems ludicrous when you compare it to "hard" sciences like physics
or such I'm not sure it is a repairable situation, because outcomes of
different macroeconomic models and policies rely heavily on the perception of
reality of people, which is frighteningly close to a random number generator
at scale.

~~~
shalmanese
That's not entirely true. If you look at something like the Economics Experts
Panel: [http://www.igmchicago.org/igm-economic-experts-
panel](http://www.igmchicago.org/igm-economic-experts-panel), some issues are
divisive, some have broad consensus and most are in between.

We tend to only hear about the divisive ones though because those are the only
ones that actually make news.

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GorgeRonde
I feel lost when it comes to economics. Yet, I think something of broader
importance is at play in the state of economy which is overshadowed by
social/cultural/political views. As I see it, the climax of the
capitalism/inequality dilemma lies in the fact income follow a long tail
distribution. As I said I know pretty much nothing about economics (or maths),
but my programming-oriented mind tells me what's really relevant about long
tail distributions independently of their current size (for instance the total
amount of wealth) is that the head, the peak of the distribution grows
exponentially faster than the tail in terms of what percentage of the cake you
have in your plate. I'm talking in terms of ratios, not absolute wealth. It is
indeed important to distinguish between the two : wealth is redistributed (in
terms of percentages) AS wealth (in terms of dollars) increases.

Everybody agrees everyone should be wealthy enough to live decently. To me,
figuring out what that bottom income is concentrates most of what is argued
about here. If you consider our economic system as a way to level up human
condition from the bottom, an algorithm that takes that bottom income and try
to reach it, then it seems the root of our economic system (capitalism, shady
behaviors commanded by our reptilian cortex, whatever) has a terrific wealth
complexity.

Frankly I don't know if this complexity is exponential (seems like it to me,
but again, I'm just a programmer), but you get the idea : is income inequality
really a political or economic problem ? Or is it just mostly about maths ?

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digitalengineer
Of course the higher tax would only be for the middle and upper class. _Real
wealh_ is easily 'hidden' using perfectly legal offshore bank accounts or
constructions like the 'Dutch Sandwich'
[http://en.wikipedia.org/wiki/Double_Irish_arrangement#Dutch_...](http://en.wikipedia.org/wiki/Double_Irish_arrangement#Dutch_sandwich)

