
The Formula for a Richer World? Equality, Liberty, Justice - known
http://www.nytimes.com/2016/09/04/upshot/the-formula-for-a-richer-world-equality-liberty-justice.html
======
jernfrost
Way to brush over the severe problems with inequality. There were plenty of
countries poorer than France during the French revolution. It was not poverty
which caused it but inequality. In all societies high levels of inequality
coincides with political instability. All that wealth and prosperity is easily
lost if you end up with revolution and civil war. Look at America today. It
has not been as unequal and politically polarized in decades.

The author champions Adam Smith, but can not possibly have read him. He did in
fact speak at length about the dangers of inequality. He specifically said
that poverty was not an absolute phenomenon. It is not about how many calories
you get per day and the size of your dwelling. He understood hundreds of years
ago that poverty is a relative phenomenon.

The author also mentioned Picketty but elegantly ignored his reasoning for why
inequality is a big problem. One of the things Picketty pointed out is that
with rising inequality, inherited wealth starts dominating the economy. This
means the ability to get rich fast will most efficiently be accomplished with
strategic marriages rather than starting your own businesses. This is what the
world of Jane Austin was about. Everything came down to strategic marriage.
That was the obsession of the day. A society of high inequality over a long
time can not be a society of "the self made man".

That ought to be recognized as a problem.

~~~
WalterBright
As a counterpoint, there has never been an era where more people have risen to
great wealth so quickly as today.

Also, 85% of American millionaires are self-made (not inherited). See the book
"The Millionaire Next Door".

~~~
TheOtherHobbes
That doesn't square with research on social mobility. E.g.

[http://www.theatlantic.com/business/archive/2015/07/america-...](http://www.theatlantic.com/business/archive/2015/07/america-
social-mobility-parents-income/399311/)

It's easy to cherry pick a fact like "85% of millionaires are self-made" and
ignore the background of those millionaires.

How many come from secure middle class homes, or grew up in families in areas
which happened to benefit from a property boom?

It's a meaningless statistic unless you look at the bigger picture - which is
where you find a persistent pattern of research proving that the one single
most significant factor determining the wealth of an individual is the wealth
of his/her parents.

Worse, the US does far worse on objective social mobility than most other
Western countries.

The fact that a few individuals can still work their way up against all the
odds doesn't alter the fact it's an unreachable goal for most of the
population.

~~~
yummyfajitas
The parent was refuting this claim: _...inherited wealth starts dominating the
economy. This means the ability to get rich fast will most efficiently be
accomplished with strategic marriages rather than starting your own
businesses._

Your comment is discussing something completely unrelated. Facebook and
Salesforce were not inherited or constructed via a strategic marriage, they
were built. The fact that they were built by high human capital individuals
with good parents does not change this fact.

The fact that child earnings are correlated with parental earnings suggests
that inheritance of wealth is NOT the cause at all and that Piketty's scary
story is wrong. Rather, it suggests that US social mobility is low because
rich parents pass good work habits, intelligence and similar traits on to
their children while poor parents do not.

 _The fact that a few individuals can still work their way up against all the
odds doesn 't alter the fact it's an unreachable goal for most of the
population._

It's tautologically true that being in the top 0.1% is unreachable for 99.9%
of the population. So what?

~~~
ap22213
What are you trying to sell exactly and to whom are you trying to sell it?

I currently live around a bunch of upper middle income Americans (>$200k
annual household income), and I have family and friends in poor rural America
(<$10k annual household income). Both groups are struggling much more today
than they were 10 years ago. Maybe the higher-income ones are still living
well, but their work environments have become so extreme that I rarely see
them around anymore. I can see that many are being are pushed to their limits
just to maintain what they have.

There's a reason why Donald Trump even has a chance at winning the presidency.
Many of both of these groups want to see the whole system crash and burn. The
media personalities like to think that only the poorer ones are supporting
him. But, when I talk around my neighborhood, as much as my neighbors dislike
him, they'd also secretly like to see him win.

There has been some frightening instability rising in the US, and it had a lot
to do with inequality and unfairness. Many people are realizing that working
hard doesn't matter as much as they were taught.

Anyway, package up what you're selling as a solution to the above crisis, and
I'll try it out at least. Otherwise, it just sounds like you're complaining
that the billionaires are being treated unfairly.

~~~
yummyfajitas
None of this is responsive to my point, namely that current inequality is
mostly self-made wealth rather than inheritance (contra Picketty).

------
jondubois
I think money isn't the issue here. Freedom is the issue.

If you're a regular person:

\- You have no free time because you have to work non stop just to pay the
bills (especially rent)

\- You have no free speech because if you say the wrong thing at work, you
might get fired. Workplaces tend to severely limit individuals' ability to
express themselves freely (because people have their livelihoods at stake).
It's usually a very tense environment.

\- For a lot of whitecollar jobs, you don't even have freedom of thought. You
can't do your work while thinking about other stuff; your mind has to be
focused 100% on the work (and in a lot of industries, the work is increasingly
mechanical and repetitive).

The problem is not lack of money itself, it's lack of freedom. The only way to
get freedom is through having a lot of money.

~~~
soufron
You can lower the importance of money by having great public services that
will be paid collectively.

~~~
visarga
What would it take for a community to "break off" the grid and not need money?
Land for agriculture, solar panels, 3d-printers for parts, water filtration,
AI and robots for automation (maybe the robots can build more robots, as
well). What a single person can't do, maybe a hundred or a thousand can. Some
technologies are converging towards independence, there might be a way to
escape the system as it is now. Maybe we get to see various lifestyle
experiments popping up, as long as the communities can take care of
themselves, and seek independence.

I think independence research should compliment UBI as a strategy for the
automation age. Give people the necessary means of production to provide for
themselves absent wages.

~~~
prodmerc
And... then what? You get a small community where some people will establish
themselves as leaders and be in control. It would be worse.

~~~
visarga
You could be right, a small community might be limiting and controlling, but
my basic intuition was to divide the power and protect people from large
companies. Up until the age of automation it was not possible to divide
concentrated power, because things were too interdependent on each other. If
there are ways to live without depending on others, communities of like minded
people will surely form to build their "utopias".

------
soufron
Yeah sure... "Poverty is the problem, not inequality". That's just lobbying
and self-delusion into believing that improving the riches always ends up
improving the poors. John Rawls where are you? Equality does not mean having
the same amount of money. That's naive and uninformed. Equality means sharing
everything. It means that the nids of the riches and the poors will go to the
same schools, that everybody goes to the same hospitals, etc. Of course it
implies that these services must be good enough so that the riches wont look
for something else. But then you can have both poors and equality.

~~~
nickff
The only problem is that Rawls was wrong; there is ample evidence showing that
we have differing views on what is right even when shielded by a 'veil of
ignorance'. For instance, your view of equality is not the same as mine, as I
favor a 'rule of law' paradigm of equality (, and I do not mean to imply that
you are 'wrong'). The author here seems to value Pareto (absolute and
widespread) improvements over relative measures, which you appear to
prioritize; one could even make the case that you are encouraging avarice.

~~~
physicalist
There can be no such evidence because there is no such thing as a "veil of
ignorance". You are fully aware of your social status. It seems likely that
this knowledge informs your values.

~~~
nickff
Your status does inform your values, but we differ in values even if we
aggressively correct for social status (as well as upbringing, race, and every
other factor). This is a 'nurture vs. nature' issue, where Rawls assumed
nature was irrelevant, but was incorrect.

------
scalio
> Enrichment from market-tested betterment will go on and on and, over the
> next century or so, will bring comfort in essentials to virtually everyone
> on the planet

That smells strongly of the same kind of delusion that fuels capitalism,
infinite growth.

> What, then, caused this Great Enrichment? Not exploitation of the poor,

Apparently, none of our clothes or electronics are being fabricated by
(economic) slaves.

While I do mostly agree with the article's conclusion,

> But the modern world came from treating more and more people with respect.

it all looks terribly cherry-picked to me in order to make a certain point:
"The current system is fine, we can all feel good" or thereabouts.

~~~
berntb
>> Apparently, none of our clothes or electronics are being fabricated by
(economic) slaves.

You know the full argument as well as I do, I'd think?

For a country to get rich, it walks up a staircase. It starts with simple
industry, investments in education and at the top after two-three generations
are Japan or South Korea? What to do to walk the staircase is known today,
there are examples. It mainly needs lack of conflicts, little corruption and
good (capitalist) governance.

If you have good counter arguments, other than that China has one generation
left of stairclimbing, I'm interested?

This was what changed my world view regarding this:

[http://www.slate.com/articles/business/the_dismal_science/19...](http://www.slate.com/articles/business/the_dismal_science/1997/03/in_praise_of_cheap_labor.html)

~~~
scalio
Thank you for that link, and for changing my view on the subject.

The thing about capitalism, though, is that it's an apparently reliable way of
doing things in such situations. Apart from the odd crisis, it has worked
fabulously for the west during the 20th century. With the internet, however, a
lot has changed. I'm not old enough to quantify exactly how much or what, but
what's certain is that it has created an entirely new ground to explore and
'colonize', and I don't think capitalism is at all well suited for stable
humanist development in both the physical and the new virtual grounds.

------
apatters
The NYT again reveals its inability to look at anything outside of its
comfortable Western bubble. The global trend of the past 10 years has been a
wave of efforts by entrenched rulers to suppress free elections, free press,
and a rise in corruption. There is a rough consensus among most watchdog
organizations that track this sort of stuff on a global level that measures of
freedom are getting worse or in the best case holding steady. The majority of
the world's population does not live in democracies with honest elections and
justice systems that are free of corruption. Sure you can argue that maybe on
some 50+ year long trend things are getting better but to write a column like
this in 2016 is just tone deaf. This is why no one wants to pay for the news.

~~~
berntb
Interesting, do you have some serious references?

I've seen the argument that as the general economy increases for an
industrialized society, democracy becomes a necessity?

(What seems scary is that with increasing 1984 Big Brother technological
capabilities, it seems more possible for e.g. China to combine economic
freedom and harsh political oppression.)

So, it is not like that?

~~~
apatters
Freedom House is probably the most relevant watchdog/measuring organization I
can think of for the general case of "equality, liberty and justice" that this
article's author was handwaving about. They try to assess the state of several
different types of freedom in every country around the world and produce a
complete index. Their view is that the world has been getting less free for
about ten years now. Many other organizations monitor and rank countries by
their degrees of various kinds of freedom - for instance Reporters Without
Borders ranks countries based on press freedom and the Heritage Foundation
ranks them based on economic freedom - the general character of the
assessments of these organizations is that the world is getting less free, not
more.

------
esolyt
> taking from the rich and giving to the poor helps only a little — and anyway
> expropriation is a one-time trick.

It is not explained why it helps only a little or why it has to be a one-time
trick.

And why is the author talking about "expropriation" instead of "taxing"?

~~~
x0137294744532
> And why is the author talking about "expropriation" instead of "taxing"?

The process of expropriation usually occurs suddenly and forcefully in the
name of the public interest and are focused on one specific group. Taxes on
the other hand, are taken regularly and are applied to everyone (although at a
different rate).

------
woodandsteel
There are a lot of problems with free market capitalism. One important one is
that, while living standards have skyrocketed in the developing world, in
recent decades they have stagnated or declined in the developed world. Another
is that the rich have a highly disproportionate influence on the political
system. A third is crashes caused by the finance industry, as in our recent
Great Recession.

That said, I think the overall message has a lot of truth. The reason this is
so is that industrialization produces vast, orders-of-magnitude increases in
the total wealth of a society, and free market regimes, over the long term,
are better than any other at both producing the technological innovation
involved, and also putting it into efficient use.

That is why the Soviet Union and Mao's China both stalled out in economic
growth. It is also why crony capitalism economies, where the road to wealth is
based on governmental connections, as in Putin's Russia and the whole Arab
Middle East, don't have successful economies.

That in turn ties to democracy. If you have an authoritarian regime, then
probably it is going to try to enrich its members and control the economy for
its own benefit, rather than that of its citizens. With a democracy it is much
more likely the market will be free enough to have real, sustained growth.

------
Animats
China officially disagrees.

Anyway, the big improvements in the standard of living came from the
industrial revolution, not the Reformation.

~~~
MarcScott
The industrial revolution would most likely have never occurred in Britain
without such reforms as intellectual property and land rights.

------
pjc50
Justice is the overlooked leg of this tripod. Societies where the law is
unevenly enforced find it harder to develop.

------
erkose
While I'm not arguing with the article, I thought liberty is freedom bound by
justice.

~~~
nickff
That phrase is laden with subjective meanings:

Liberty: positive or negative liberty?

Freedom: freedom from or for what? Obligation, morality, ethics, work, or
responsibility?

Justice: is this rule of law, or some type of social justice?

------
lutusp
The article fails to mention a key element in eliminating poverty -- free and
affordable access to fertility control measures for women, as well as an
absolute sovereign right for women to choose when and whether to have
children.

~~~
mamon
There's one huge downside to this: eliminating poverty by reducing population
leads to aging society, which leads to shitty pensions for retired workers,
higher taxation, higher public debt, etc, which in turn leads back to
population reduce.

Basically, birth control leads to a slow death of civilization. The most
tragic thing about it is that you can't do anything about it, as denying women
the choice would be violation of their human rights.

Therefore, advanced societies are doomed to die out and be replaced by more
primitive ones. Which happened few times in history (e.g. Roman Empire) and is
already happening again in some part of the world (e.g. EU immigration crisis)

~~~
grey-area
The fall of the Roman empire was due to birth control?

~~~
mamon
Maybe not only because of that, but abortion was pretty common in Roman
Empire. If you think it requires modern medicine to conduct abortion then you
are mistaken.

~~~
omonra
Can you cite anything that mentions birth control as having anything to do
with roman empire collapse? I'm genuinely interested.

~~~
pjc50
This is ridiculous, because the Roman empire did not collapse due to running
out of Romans. Rome had a very generous naturalisation policy, part of its
success.

The fall of Rome is probably the most overdetermined overinvestigated event in
history; everyone has their pet theory. It's usually marked as the crossing of
the Rhine by various 'barbarians' and the inability to mount an effective
defence.

------
brador
The ultimate solution is a machine that solves every need I have before I have
it.

But then why live?

------
hal9000xp
I feel smell of leftism from keywords "equality" and "justice".

You don't need machine learning to automatically spot social democrats (they
have almost the same rhetoric as socialists), a simple python script is more
than enough.

By the way, what this article is doing on HN?

~~~
jnbiche
Your heuristic failed here. The writer here opposes raising taxes and even
uses the favored fiscal-conservative term "expropriation" (her words:
"expropriation is a one-time trick"). She exalts Adam Smith and the free
market. She's no social democrat.

~~~
hal9000xp
You are probably right, may be I was wrong on this article. In particular, I
agree on this:

"Raising low productivity by enabling human creativity is what has mainly
worked. By contrast, taking from the rich and giving to the poor helps only a
little — and anyway expropriation is a one-time trick. Enrichment from market-
tested betterment will go on and on and, over the next century or so, will
bring comfort in essentials to virtually everyone on the planet, and more to
an expanding middle class."

Till recently, I spent time and actually read articles on NYT (or similar)
even if they had some keywords in title. And almost always, I found that
author is supporter of labour party or Bernie Sanders or something like this.

This time, I was probably mistaken.

