
Wealth inequality is soaring – here are the Why it’s happening - Ours90
https://www.theguardian.com/commentisfree/2018/apr/12/wealth-inequality-reasons-richest-global-gap
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tabeth
An interesting thing to consider is that even if you believe that the "rich"
people deserve to have all of the assets, and consequently all of the risk,
when something _does_ happen they conveniently do not take the
disproportionate amount of suffering that would be implied by their
disproportionate amount of resources.

You can see this _all_ of the time:

\- CEOs get huge bonuses when the company is succeeding, but when the company
fails there are layoffs. In the worst case they often leave with a large
amount of severance compensation.

In short I think the problem is a lack of alignment (in addition to many
others). The other problem is that our "democracy" is highly crippled. I might
even conjecture that in a functional democracy large inequality should be
_impossible_ as the large poor population would always take actions to
restabilize things.

\----

To elaborate on this last point. People in this thread are commenting on all
of the "loop-holes". Those loopholes don't really matter. In a functional
democracy the poor would simply find all of them and vote to have them
removed.

I don't think "the poor" care about others having more wealth than them any
more than they care that some are taller than them. The issue is that the
current level of inequality is, dare I say it, _unnatural_. Take any human
property you want -- height, weight, intelligence, mile time, _anything
objective_. You'll see that the distribution in ability for that property (or
properties) is no where even close to the wealth distribution. So, maybe the
natural wealth distribution should be closer to the distribution of those
"natural" properties.

------
padobson
Whenever I see these inequality articles, I feel the need to mention a few
things:

\- The "1%" is ever changing, the mobility in and out of that group has only
increased over time [0]

\- Most measures of inequality are local or national. The same markets that
have enriched the 1% have also brought a billion people out of poverty
globally in the last 30 years. [1] Globally, workers are doing better than
ever.

\- The practicality of inequality changes over time. Most people in the middle
50% in developed nations live better than the .1% of a hundred years ago.

Inequality may be a problem, but it's not an existential threat or even a
primary concern to developed countries.

[0][https://marginalrevolution.com/marginalrevolution/2014/04/mo...](https://marginalrevolution.com/marginalrevolution/2014/04/mobility-
in-and-out-of-the-top-one-percent.html)

[1][https://www.economist.com/news/international/21719790-going-...](https://www.economist.com/news/international/21719790-going-
will-be-much-harder-now-world-has-made-great-progress)

~~~
IkmoIkmo
I agree with a lot of points but... just want to note that you are referring
to 1% income levels in your article, not wealth levels. Those are wildly
different things. It's quite possible to earn a lot at some point in your
life, temporarily being a top-earner in the country. Winning a lottery,
cashing out capital gains on home equity or a business sale can do that. Or
even having a really good year in a good job. The threshold is $390k of income
in a year.

But that's an entirely different notion from becoming part of the top 1%
richest people in the country.

Here's a graph on how wealth inequality is far worse than income inequality:
[http://inequality.comm.ccsu.edu/wp-
content/uploads/2014/09/I...](http://inequality.comm.ccsu.edu/wp-
content/uploads/2014/09/IncomeWealth.png)

Now, income inequality tends not to matter too much beyond a certain figure.
At some point, which is far below the 1% level, you get marginal returns to
your income in terms of quality of life.

However, wealth is different in that it affords so much power, which isn't
compatible with democratic ideals where everyone's voice or vote is
approximately equal. When 1% of the population holds 40% of the ownership and
shareholder votes of all companies, land, factories etc, that can be
problematic. And it is worsening.

Again, I'm not terribly concerned and I don't see wealth inequality as
inherently dangerous, but it is a problem and it isn't getting any better.

~~~
padobson
Your critique of my post is valid and I agree with it, but I'm not sure my
ultimate point is diminished. From what I've read, wealth and income mobility
are correlated, if over longer timelines. Finding good statistics on wealth
mobility over time on a global scale is hard, but I've yet to see any reason
to believe they don't correlate with income mobility.

And it makes sense if you look at the tippy top of the wealthy as an
illustration: In nominal dollars, Bezos is less wealthy than Walton was less
wealthy than Rockefeller, and Bezos is a major beneficiary of globalization.

Rockefeller had an outsized influence on American politics because his wealth
was chiefly American.

Bezos, on the other hand, to hold his wealth incumbency needs to influence
politics in the U.S., Canada, Mexico, the UK, the EU, Japan and China.

Globalization definitely allows the rich to reach newer heights, but it also
diffuses their influence and spreads their power thin.

------
montrose
Of the ten causes of inequality he lists, zero of them explain why Jeff Bezos
or Larry Page or Mark Zuckerberg are so much richer than the rest of us. So
here's another cause of inequality: that computers and the internet have made
it easier to start a company that gets really big.

You might think someone proposing x as a cause of inequality would check it
against lists of rich people to see if it explained why they were rich. But
few people who write about inequality ever seem to do this.

I'm not sure why. Is it because they're far removed from the world of startups
and don't understand how it works? Is it because they have pet theories they
don't want to risk falsifying? In most cases I would guess a bit of both.

Most people who write about increasing inequality seem to assume as an axiom
that it's due to changes in policy, rather than changes in the world. But if
you work your way down the Forbes 400, changes in the world are clearly a big
factor. You could tax away 90% of Zuck's wealth, and he'd still be a
billionaire.

~~~
Mimino123
> here's another cause of inequality: that computers and the internet have
> made it easier to start a company that gets really big.

I don't see how it is a problem. It is just another opportunity for talanted
people to start their own business. Not everyone can run a company and not
everybody's as creative or smart as someone who earns millions of dollars a
year. So here's a question: why should someone, who doesn't have any abilities
to run business, who isn't creative or smart have the same income per year? I
don't really understand what's equal about this.

~~~
montrose
I agree with you: I don't think it's a problem either. But people who start
from the axiom that inequality is bad have the choice of either claiming it's
bad that people can start companies that grow fast, or not seeing this source
of inequality. Most seem to choose the latter.

~~~
pron
The claim isn't that inequality is bad; it's that a certain _level_ of
inequality is bad, and the call isn't for full equality, but for _more_
equality. The reason it's bad, _really_ bad, is this:
[https://news.ycombinator.com/item?id=16592641](https://news.ycombinator.com/item?id=16592641)

------
SlowBro
Taxing the rich seems to be one of the hardest things in the world to do. They
can afford the best lobbyists to influence politicians to write loopholes in
whatever laws you can think of to tax them; they can hire the best accountants
to shelter assets from those laws; they can hire the best lawyers to help them
get off the hook if they breech those laws; and if they become too unpopular
here, they can afford the high price of gaining citizenship in other nations.

Better solutions are needed.

~~~
refurb
_Taxing the rich seems to be one of the hardest things in the world to do._

In the US at least, the rich (top 1%) pay almost 40% _of all taxes_. Look at
the top 10% and it's 71% of _all taxes_.[1]

Why do you say it's hard to tax the rich?

[1][https://taxfoundation.org/summary-latest-federal-income-
tax-...](https://taxfoundation.org/summary-latest-federal-income-tax-
data-2016-update/)

~~~
david-gpu
And if one person owned all the income, that one person would pay 100% of the
nation's taxes. How unfair!

The fact that the 1% can pay 40% of all taxes and still be wealthy is an
indication of how massive inequality is on the US.

~~~
refurb
Of course it wouldn't be unfair for one person earning 100% of all income to
pay 100% of all taxes!

So let's see if that's happening...

Top 1% pay 40% of all taxes. How much of total income do they earn?
Interesting, only 21%. Looks like they already take on a much higher burden
than their income alone would suggest.

~~~
david-gpu
What we need to look at is their net income after taxes, and there the 1% is
still doing much better than the median taxpayer. If you look at the top 0.1%
earners, it's obscene, let alone the 0.01%.

------
rossdavidh
Completely nothing about globalization and free trade between countries of
very different wage levels. Lots of things that indicate that we would be
better off with bitcoin instead of regular money. Author is also an author of
a book about bitcoin. Hmmm...

~~~
pjc50
Yeah, this is a goldbug's list.

"Quantitative easing", CPI, "Debt-based money", "Zero interest-rate policies",
and "The decline in the purchasing power of money".

Raising the interest rate would constrain investment and lead to recession.
This is a key part of the conventional understanding of interest
rate/inflation links, which have been managed fairly effectively in the West
for decades.

The only really sound thing he says is "Wages have not risen by the same
amount. Those who rely on their salaries to get by have suffered an inexorable
erosion of their wealth. Those who own assets have made good."

------
sjbase
I find it suspicious that every one of these causes is a form of fiscal or
monetary policy.

Keywords that don't exist in this article: Job, Workforce, Education,
Technology. None of those even get a place in the top 10?

~~~
maxsilver
For the kind of equality being discussed, none of those things really matter.
The best job in the world, the best education in the world, the best
technology in the world, none of that really fixes this problem.

A fiscal/monetary policy problem like this is potentially best served with a
fiscal/monetary policy fix.

------
marcrosoft
What does wealth equality even mean and why should we pursue it? What would
happen if everyone was magically given a distribution of “wealth”? Would there
be anything to give?

~~~
Frondo
Look man, you don't need to care. That's the nice thing about politics, you
don't need to care about anything.

Lots of us do, because the fact that the three richest people in America own
as much as the poorest half combined tells us that the laws that govern our
playing field may not be presenting a particularly fair or level playing
field, despite claims that anyone can work hard and win at life.

Wealth inequality is a problem for those of us who do care because we want a
society that actually does work for everyone in some semblance of similar
proportion, not one in which everything is peachy for a few, miserable for the
rest; this one doesn't seem like it is.

Again, you don't have to care.

~~~
defterGoose
Thanks for this reply. Calling someone out quickly and civilly for posting a
shallow, ontological quip is one of the best things we can do to keep this
type of serious conversation fact-based, on-focus, and troll-free. Too often
nowadays these things can devolve into semantic wankfests with little
semblance to "fact" or "truth".

------
baybal2
Do you people known that medieval Europe had double digit property and land
taxes? Kings and emperors back then were way more afraid of somebody becoming
richer than them; the modern day political establishment not so much.

~~~
contravariant
I'm confused. Are you advocating for lower taxes to prevent the political
establishment from enriching themselves, or are you advocating that employees
revolt and overthrow the executives to install a more democratic management?

~~~
baybal2
I'm not advocating anything here.

------
candiodari
The thing that's worrying is that America and Europe are the only places where
inequality is so small. Visit India or Africa once and take a look there.

------
bogle
Eat the Rich. Nosh! Nosh! Nosh!

