
Some are more equal than others - acalmon
http://www.economist.com/blogs/graphicdetail/2014/11/daily-chart-2?fsrc=scn/fb/te/bl/ed/somearemoreequalthanothers
======
api
To argue that this is purely meritocratic requires you to argue that some
individuals are thousands to tens to even hundreds of thousands of times more
productive, intelligent, or hard-working than everyone else.

While differences do exist, framing the question that way makes it obvious
that the _very highest_ levels of the income ladder are largely a result of
network effects and leverage rather than productive activity.

Another way of framing the question: was Mark Zuckerberg's contribution to
computer networking more than a million times more valuable than that of Tim
Berners-Lee?

I'm starting to see the rise of "market fundamentalism" over the past 35-ish
years as part of the general trend toward the naturalistic fallacy over the
same time period. If it's "natural," it's by definition good. So if the
"natural" free market concentrates >50% of all wealth in <0.1% of hands, well
dag nabbit that's what nature obviously intended and who are you to argue with
nature? Wealth redistribution or other mitigating strategies are sort of like
vaccination and GMO foods-- tampering with nature and "playing God."

~~~
onion2k
_Another way of framing the question: was Mark Zuckerberg 's contribution to
computer networking more than a million times more valuable than that of Tim
Berners-Lee?_

A spurious argument - Zuckerberg's money isn't from computer networking.
Berner-Lee is essentially the inventor of the wheel while Zuckerberg created a
Ferrari. So a better question would be "Has Zuckerberg made a significant
contribution to ad sales and market intelligence data gathering?", in which
case the answer would be an obvious yes.

Obviously that leads on to a question about whether the inventor of an
enabling technology such as the web should be significantly remunerated for
their work, which society would apparently answer with a resounding no.

~~~
api
This creates a problem though:

If you are a highly intelligent and motivated person, you have many choices
about what to do. This suggests that doing the kind of basic R&D work that
might lead to the invention of the WWW is a sucker's game. You shouldn't
invent wheels. Instead you should invent Ferrari's using other peoples'
wheels.

This over time will lead to brain drain from the realms of basic research and
invention. I'd posit this as a possible explanation for the decline of
fundamental innovation since roughly 1970, which coincidentally is the era
when the groundwork for this shift in wealth distribution really got laid with
the emergence of the "new left" and the "new right." (What I call the
reactionary left and the reactionary right -- note that in both cases the
naturalistic fallacy is a cornerstone of these belief systems.)

I'd count myself among the drained. I decided not to do a Ph.D partly because
I didn't want to take a vow of poverty to do work to make other people rich.

Free markets reward things exponentially as they near the point of
consumption. The person who puts the icing on the cake is rewarded
exponentially more than the person who baked it, who in turn is rewarded
exponentially more than the person who made the flour, and so on. The folks
rewarded exponentially most of all are the financiers who simply move money
around to fund these activities.

This seems unfair in virtually every case, but it's incredibly unfair in the
realm of ideas, invention, science, and technology. In ordinary manual labor
the difficulty of each step tends to be similar, while in intellectual realms
the fundamental steps of invention and discovery are often exponentially
_harder_ than the ones closer to the end of the line. So for intellectual
work, the relationship between difficulty and importance and compensation is
_really_ pathologically skewed.

~~~
humanrebar
> Free markets reward things exponentially as they near the point of
> consumption.

Right. That explains why there's so much more money in gas stations than oil
wells. And why HP is so much bigger than Intel.

~~~
thisGuysAccount
Gas stations are consumers of the products of oil refineries and oil wells. HP
is a consumer of Intel's chips.

Free markets reward business to business sales very well.

------
applecore
The full article is here: [http://www.economist.com/news/finance-and-
economics/21631129...](http://www.economist.com/news/finance-and-
economics/21631129-it-001-who-are-really-getting-ahead-america-forget-1)

The 16,000 families comprising the richest 0.01%, or “1% of the 1%,” now
control 11.2% of total wealth—that's over half the wealth of the rest of the
1%.

~~~
tzs
I never know what to make of numbers like those, because the articles that
present them never offer anything to tell me what a good wealth distribution
would be. With nothing to compare to, I have no idea if those numbers are
showing something is wrong, or showing that things are fine.

In any group (the whole population, or any subgroup such as the top 1%) where
the are wealth differences within the group, then it is mathematically
inevitable that the top X% of the group will have more than X% of the group's
wealth.

If there is an individual who has more wealth than any other individual, then
it is also mathematically necessary that wealth_of_top(X)/X increases as X
decreases.

~~~
syntern
This. Also, it is not the top that matters, rather the quality of life of the
bottom percentiles. We need to raise those up, and as long as we can do that,
the top doesn't really matter.

~~~
AnimalMuppet
True, but I think if we look around, we can find some fairly compelling
evidence that we're not doing very well at raising the quality of life of the
bottom percentiles...

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doki_pen
The biggest lie told today is that we have less wealth in the world and we
can't afford things like social security and welfare. There is more wealth now
than there has ever been. Modern productivity is insanely high.

~~~
humanrebar
> There is more wealth now than there has ever been.

And the role is government is bigger than ever. Back in the day if there was
an earthquake, people didn't storm Congress asking what they would do about
the earthquake problem.

More significantly, people attributed bad health to nature, not bad insurance
policies.

Also, demographic have changed a lot. Now we have:

* fewer productive adults per household due to demographic trends (single parenthood, divorce, etc.)

* fewer children per household that grow up and contribute payroll taxes

* fewer people dying at their prime (and contributing to pensions, etc. without drawing anything)

* higher standards of living (bigger houses, multiple TVs, grandma lives across instead of upstairs, obesity outweighs starvation as a problem, etc.)

~~~
aswanson
Funny how you didn't address the increase in productivity bullet point. Guess
it didn't fit your worldview/agenda.

------
dominotw
I recommend this NPR podcast, you'd be surprised by the results.

"INCOME INEQUALITY IMPAIRS THE AMERICAN DREAM OF UPWARD MOBILITY"

[http://intelligencesquaredus.org/debates/past-
debates/item/1...](http://intelligencesquaredus.org/debates/past-
debates/item/1159-income-inequality-impairs-the-american-dream)

------
smoyer
The worst implication I see find (reading between the lines and via the
graphs) is that our middle class consists of only 9.9% of the population. By
subtraction, the middle class holds around 56% of the country's assets.

So our middle class is indeed shrinking but also moving towards being upper
class.

~~~
api
What's _left_ of the middle class is sort of becoming a "lower rich" class.
While this is somewhat anecdotal, what I see emerging is a kind of banded
stratification: a tiny "superclass" holding a majority (>50%) of all wealth, a
"lower rich" class, a very small working middle, a vast working poor, and a
vast class of unemployable welfare recipients.

------
refurb
I'd be very interested to see the impact of baby boomers on the distribution
of wealth.

Remember: (1) wealth tends to be correlated with age and (2) baby boomers make
up a much larger percentage of the population (i.e. age distribution is not
equal).

If you have a large bolus of folks moving through their careers, the graph
follows the typical wealth trajectory. Right now, baby boomers are at or near
the peak of their wealth.

~~~
6stringmerc
If you're interested in this subject, ZeroHedge has been compiling some very
useful data regarding employment. Here's a link to two graphs that show the
"age skew" at play in hiring for the past several years:

[http://www.zerohedge.com/sites/default/files/images/user5/im...](http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/09/Workers%20aged%2055%20and%20over.jpg)

[http://www.zerohedge.com/sites/default/files/images/user5/im...](http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/09/55%20older%20younger_0.jpg)

Full article:

[http://www.zerohedge.com/news/2014-10-03/hiring-
grandparents...](http://www.zerohedge.com/news/2014-10-03/hiring-grandparents-
only-230k-september-were-added-55-69-age-group-10k-lost-prime-25)

------
scott_s
The webpage for the paper (!) has more information: [http://gabriel-
zucman.eu/uswealth/](http://gabriel-zucman.eu/uswealth/)

There's also a slide deck for a talk on the paper:
[http://eml.berkeley.edu/~saez/SaezZucman14slides.pdf](http://eml.berkeley.edu/~saez/SaezZucman14slides.pdf)

------
andrewla
I find it hard to take this sort of analysis seriously, when the authors admit
that they don't even understand the order of magnitude of the error bars on
the data.

Not to mention that the regulatory landscape has changed over time, and since
that directly influences several classes of errors (from waiters under-
reporting tips to "the 1%" hiding money in now-illegal tax shelters)
estimating historical trends is an exercise in futility.

And we effectively have no way to benchmark how well these different studies
are doing at measuring the underlying phenomena that they're trying to
measure, this is really just making up numbers and calling it "wealth
distribution".

~~~
phillmv
Welcome to problems with social science!

>this is really just making up numbers and calling it "wealth distribution".

We can go deeper. Almost everything you hear about the "economy" is based on a
mathematical model that makes a variety of assumptions. What is income? What
is wealth? Who are the people participating? How does information get
transmitted? What is a "good" outcome and what is a "bad" outcome?

Further, "waiters undereporting tips" is a tiny problem next to "wealth is
somewhat unmeasurable since we don't survey it or tax it".

The best we can do is measure what we can and try to make reasonable
inferences. But it's _not_ an exercise in making up numbers. It's an exercise
in interpreting what the numbers we have are saying.

------
jprince
It is interesting that OP uses a line meant to denigrate socialism to critique
capitalism. I think that the graph is misleading - the average poor person
today has 3 wide screen TVs, an Xbox, a smart phone and air conditioning. Poor
people in 1916 would sometimes starve during the winters. To compare 1916 to
2014 as if they are equal highs in inequality is meaningless: Overall,
everybody is much, much better off.

~~~
a_gentle_autist
You've clearly never spent any time in a real poor neighborhood.

Or, more likely - you consider the lower middle class "poor" by your inflated
Silicon Valley standards.

Reminder: avg. US HOUSEHOLD income is 52K/year.

~~~
waterlesscloud
68% of US Households with income under $50,000 have at least 1 HDTV.

[http://www.leichtmanresearch.com/press/030714release.html](http://www.leichtmanresearch.com/press/030714release.html)

~~~
Someone1234
All TVs are "HDTVs." That 68% will be near 100% (of TV users) once more TVs
die in the next few years.

If I go onto Amazon right now, filter sellers by Amazon.com, sort by low to
high, and look at the cheapest two TVs: Samsung UN24H4000 720p: $147.75 and LG
22LB4510 1080p: $159. Both "HD."

So, using HDTVs as a metric of poverty is dumb. They're the only game in town.

~~~
waterlesscloud
Right. So things which were once luxuries are now common and cheap.

Which was the point.

~~~
Someone1234
Sounds like a nice way to dismiss all Western poverty ever. Have running water
and electricity? Clearly not poor...

Just pick anything that 90%+ of the population have: internet, electricity,
gas, water, a car, heating, a telephone line, etc and then declare it your
"line" for poverty.

~~~
waterlesscloud
That's not the point under discussion.

~~~
Someone1234
What exactly is the "point under discussion" then? Because it sounds pretty
close to that if that isn't it.

