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Capitalism and Inequality (avc.com)
108 points by kawera 55 days ago | hide | past | web | favorite | 237 comments

This entire post is based on a strawman argument. AoC said that a system that allows billionaires to emerge alongside extreme poverty is immoral - with reference to hookworm(which she incorrectly referred to as ringworm) in Alabama. It's hard to disagree with that, and it's a VERY different point than claiming billionaires should not exist (which OP argues against).

By the way, the point AoC was trying to make when put in context is exactly the argument that the OP was making, which is that people getting rich is OK but it's immoral that people are getting rich and also people are living in extreme poverty, so we should improve the system so people aren't living in extreme poverty.

Where OP differs from AoC is (of course) in his assessment of how we eliminate extreme poverty - AoC is famously advocating a 70% marginal tax rate, while OP suggested some unspecified mix of "technological improvement" and "re-imagining of government" to achieve elimination of poverty. Frankly I think OP is just naive. Maybe he thinks government is literally in the stone age with an army of clerks shuffling paperwork, but I just don't see how eliminating some unnecessary jobs (useful, yes) in government can achieve "medical care for all, affordable education for all, and some amount of income for all" (OP's listed aims).

On top of that, ANY change to government is inherently political. The kind of revolutionary upgrades in government efficiency that OP wants would need to be a major party initiative - which would be opposed by the opposite party, watered down during negotiations, and subjected to compromise by the political process. This is simply a fact about how the world works. We're not an autocracy which means we don't get a visionary Steve Jobs figure who can dictate what the government will do for the next 10 years, and we have to accept both the good and the bad that comes with that.

To think that technology will magically save us from real world problems plaguing real people by "reimagining government" and "cutting unnecessary jobs" is literally wishful thinking. It belongs in a bygone era where tech enthusiasts were sure facebook and google would revolutionize the world by spreading democratic and free speech ideals to every corner of the earth. There aren't easy solutions to every hard problem and OP doesn't seem to appreciate this fact.

Well written comment. As someone close to the NHS and UK school system, Fred's type of mentality has hit these hard and contributed to Brexit. Both are constantly bringing in "change" type consultants. If only we can cut employees/use this software package/run it more like a business/get better leaders/have more digital strategies. No Fred, they just need money. They need money to pay doctors, they need money to fund beds, the need to pay teachers. Government doesn't run like business. A hospital can't just go bust, a council can't just shut up shop, this isn't how it should work either. His solution is roughly saying "well I like the status quo and if you come up with anything I'll take a look but will probably shoot it down". Sorry Fred, you're on "the let them eat cake" side whether you recognize it or not. Roll on March 29th.

It seems Brexit will do horrific damage to the NHS though.

I mean turning back the clock on half a century of economic integration to become some Juche state probably isn't going to work out so well.

What is "extreme poverty" and what is the character of the life of someone who lives in "extreme poverty"?

One of my biggest fears with this line of rhetoric: Extreme is a relative descriptor. If the most poor of us made 100k/yr, then they would be on the "extreme" end of the income scale.

I fear that it's too easy to forget that making 15k/year today makes you dramatically better off than median income earners from 100 years ago.

My own definition: While we have people who are incapable of paying for food, shelter, healthcare and basic education, we have people living in extreme poverty.

It's good that less of us are extremely poor today than 100 years ago, but the fact that you can watch Netflix in comfort while your teeth rot inside your mouth unattended does not mean change to the system isn't needed.

Do you add any context to that? For example, lets say I go out and I spend my paycheck on a new gaming computer, the next day technically I can't afford food. Is it societies job to step in? What if I am able bodied but refuse to work? What if I could afford to live with roommates, but I prefer not to? As for healthcare is everyone entitled to cutting edge experimental therapies from the mayo clinic, or would access to their local hospital and free clinic be sufficient to meet your requirement?

Depending on those definitions it may be that the vast majority of Americans already have those things or very few do. So clearly defining them is important.

I think you know the answer. That in your hypothetical example you had a choice it’s clearly not what people in extreme poverty have.

That’s what sufficient (not impoverished) money allows - the freedom to choose.

> Extreme poverty, abject poverty, absolute poverty, destitution, or penury, was originally defined by the United Nations in 1995 as "a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."[2] In 2018, extreme poverty widely refers to making below the international poverty line of $1.90/day (in 2011 prices, equivalent to $2.12 in 2018), set by the World Bank. This measure is the equivalent to making $1.00 a day in 1996 US prices, hence the widely used expression, living on "less than a dollar a day".[3] The vast majority of those in extreme poverty – 96% – reside in South Asia, Sub-Saharan Africa, The West Indies, East Asia and the Pacific; nearly half live in India and China alone.[4] As of 25 June 2018, Nigeria became the poverty capital of the world with more than 86 million of its citizens living in extreme poverty despite abundant resources.[5][1][6]


P.S.: In case anyone here hasn't read Factfulness and doesn't think that the world really is getting better in very measurable ways: https://en.wikipedia.org/wiki/Extreme_poverty#/media/File:Wo...

One of my biggest fears with this line of rhetoric: Extreme is a relative descriptor.

From the blog post:

I am not for the emerging progressive Robin Hood narrative. I am certainly not for the entrenched conservative Let Them Eat Cake narrative. I am for a new narrative that understands that everything must change if we are to find ways to support everyone in our society.

As far as I can tell, all societies have some form of redistribution as well as some form of Pareto distribution. This is because the Pareto distribution just appears everywhere in the same way the Normal distribution appears everywhere. However, the social instincts of Homo sapiens operate on a relative basis. Social unrest can well be brought about from relative poverty. Evidence indicates that crime is strongly correlated with relative poverty, not absolute poverty.


Calling Pareto outcomes "immoral" is insanity. It's ideology denying historical and scientific facts. However, denying the social effects of relative poverty is also ideology denying historical and scientific facts. We do need a new narrative, or perhaps an old narrative updated for today. (We need to stop the squeezing of "everyone" pastimes for luxury profits.) Great wealth is only stable in a society where people feel the rising tide lifting all boats. In any case, a narrative that vilifies entire groups of people is the last thing we need in 2019.

See that's kind of the schtick. There's strong incontrovertible evidence that capitalism is the hitherto only discovered thing that causes the tide to actually lift all boats in reality. The contention is how equally it should lift (and if that's even possible and even desirable, if possible)

There's strong incontrovertible evidence that capitalism is the hitherto only discovered thing that causes the tide to actually lift all boats in reality. The contention is how equally it should lift (and if that's even possible and even desirable, if possible)

Everyone should be able to take their family to the park, the museum, the movies, or the ballgame. Doing so shouldn't make you choose between feeling lesser/2nd rate or paying some big fraction of your entire paycheck. "Everywoman" and "everyman" should have their own nobility and feel they belong. That's how you know if a society works.

The wealthy should rightly fear the unrest of the masses. That's simply how Homo sapiens have worked throughout all cultures and all of history. There should be virtuous works for the public which include the entire community. Basically, either they fill the populist role, or someone else will step in and do it for them. The 1st option is not only the best for them, it's the best for society as a whole.

I don't understand. It's difficult to not read the straw man "all seats should be equidistant from the baseball diamond"

I hear you saying a lot of shoulds which need justification by themselves, but even if I accept them, there's nothing we know of that can provide that.

A core contention between us is likely to be "how much of our current lives are we willing to risk to speculate toward the feel-good shoulds?" My answer is "all steps should be dramatically small and take a long time to make sure we can back out if we misstep." That's the core of what it means to be conservative, to me.

In other words, Hell is a long way down, we, all of us, have it too good to speculate dramatically in large ways or in fast ways.

I don't disagree that descriptors like "extreme poverty" are inherently vague, but I think that's kind of the point - that regardless for where the exact line is, we can all agree there's some point where people are unambiguously in the world of "extreme poverty". For people in that world, we can easily pick out the hugest pain points in their struggle - lack of healthcare, lack of housing, and so on. And then, we can structurally change how these resources are distributed by society in a way such nobody will have to live without them.

That's really all the progressive agenda is, right? We recognize that having no healthcare at all (and the associated problems with that level of poverty) is immoral, so we want healthcare for all, even if we have to raise the marginal tax rate at the top level to do so (and so on).

I don't think there needs to be a formula for what constitutes "extreme poverty" to make poverty less painful for America.

Edit: or to put it another way, since most everyone agrees that going full communism is categorically a bad idea, partially socializing resources that can be considered a common good is a good alternative. We already do this with plenty of things, like the military, we're just looking to take it a step further where appropriate.

A rising tide lifts all boats... Or at least it should.

What do you think the world looks like for the poorest in the world in the next 100 years? 300 years? Possibly/probably better than you or I have it now.

As long as where they live isn't flooded by rising sea levels, or their farms aren't desiccated by drought....

Buy cheap land in Canada or Russia if you think arable land distribution will be affected by climate change :3

Completely unrelated to the content of your post, but I find it interesting that you lowercase the o in AOC as if it's a technology like IoT.

Haha yea wow I didn't even realize I was doing that.

> would need to be a major party initiative - which would be opposed by the opposite party, watered down during negotiations, and subjected to compromise by the political process.

The current parties? Never. They would simply talk about the wall or destroying another country. Or saction this and that.

In the last 6 weeks, the Yellow Vest Movement has achieved so much already. The power is in the hands of the people, if only they realize it. The good news is that this movement is spreading everywhere.

I will end with a story from a book I read a few years ago.

Talk is cheap.

Rather than end on a touch-and-feely note, I'd much prefer that he get back to the core question:

Instead of merely stating that he is a "fan" of things like Basic Income and (truly) universal education (not to mention at least having a hope of dealing in some reasonable way with climate change) --

The question to ask is: which progressive taxation measures, specifically, is he willing to publicly endorse as a means (almost certainly the only viable means) of attaining these goals?

Hard numbers, please. If it isn't AOC's particular step function -- "75 percent on all income above 10 million" -- then which progressive taxation schemes would he be in favor of -- and be willing to publicly and state as much?

The question of whether we "allow" billionaires or not is, to some extent, a semantic dodge. What matters is that, at the end of the day, in order to achieve any of these goals -- we pretty much have to "soak the rich" (in addition to ending corporate tax evasion and related measures). It follows from Occam's Razor and any level-headed assessment of all the ethical and economic factors involved.

The only questions are when (to which we already know the answer: as soon as humanly possible) and how exactly.

So again, it all comes down to hard numbers: Which progressive taxations is he willing to support? And what's the best way to get them implemented in time to avert further carnage and social disintegration -- that is, as soon as humanly possible?

(AOC = Alexandria Ocasio-Cortez)

he said in the article that he doesn't think higher taxes are the solution - that the government itself needs to be improved if additional programs are to be introduced.

Without any arguments or evidence that this would either (1) be attainable or (2) actually free up enough cash to fund all the good stuff he (claims to) support.

2) applies to progressive taxation as well. There's no reason to believe that raising taxes on the wealthy is just a free wellspring of enough money to fund huge, nation-wide social programs. There are myriad things that can go wrong: loss of investment pools harming the economy, disincentivising entrepreneurialism, the wealthy moving abroad, the actual collectable amount being less than you'd expect (because "wealth" is a very fuzzy concept in modern economies), the actual cost of these social programs being higher than you'd expect, etc etc.

Not that I want to shit all over the idea, it could equally work really well (I have no idea what the outcome would be), but a lot of the time these ideas don't receive the clear-headed analysis they deserve because they're ideological rather than logical in nature (taxation from the left, government efficiency from the right). I'd love it if we could pool all the ideas for ways to raise the minimum living standard, experiment with them and compare the results in a scientific way rather than just having two sides shouting at each other that their way is better.

There's no reason to believe that raising taxes on the wealthy is just a free wellspring of enough money to fund huge, nation-wide social programs.

Actually there's a lot of historical evidence to the effect that, when taxes are more progressive -- income inequality is less severe, affordable housing gets built and infrastructure is better maintained.

And not only that: because we're "all in this together", society tends to work more cohesively and deal better with external threats, like say, WW2 (compared to the nosedive into nativism and paranoia we're experience right now, in the face of comparatively lesser threats).

Source: U.S. history since the beginning of the corporate era (1880s or so).

That making taxes more progressive within certain limits has certain effects does not imply that these effects will progress linearly as tax progressiveness increases. After all, if you had a 100% income tax for some segment of population, they would all just move their money abroad.

We had a ~90% marginal rate in the 50s and 60s with a roaring economy.

I think 70% marginal at a much higher income stepping level even going back to what historically worked.

In the 50’s and 60’s it was far harder to move one’s money abroad or operate as an ‘international citizen’ simply because we didn’t have the infrastructure. Not only that, the advantage of not having had world war 2 on the mainland meant that there were not a lot of attractive and functional alternative economies to move to, where now there are.

The argument that it worked fine in the 50’s and 60s and so it would be fine now is based on the assumption that those decades were representative, when in fact they were a historical anomaly.

Somewhere between 100% and the woefully inadequate levels we have now --

I'm sure there's a happy medium.

My point is, if that's true then great - implement higher tax brackets. But you should understand the effects of a drastic change before implementing it. That would ideally involve researching the economic and societal effects that are attributable to tax increases, because simply noting that eras with higher taxes tended to be better isn't a strong case.

That's to say nothing of the huge budget the US already has. I mean, there's no reason why you can't both increase taxes and streamline the existing government (e.g. defense for a start) in order to drum up funds for a healthcare system.

==disincentivising entrepreneurialism==

New business creation has fallen along with the highest marginal tax rate.[1]

==because "wealth" is a very fuzzy concept in modern economies==

But income really isn't and that is what we tax.

==I'd love it if we could pool all the ideas for ways to raise the minimum living standard, experiment with them and compare the results in a scientific way rather than just having two sides shouting at each other that their way is better.==

We could always look at the 33 other OECD countries and see where they have found successes.[2] Spoiler alert: universal healthcare, early childhood education, improved infrastructure (specifically: transportation, water, high-speed internet) and parental leave are specific improvements that could directly improve quality of life.

[1] https://www.bls.gov/bdm/entrepreneurship/entrepreneurship.ht...

[2] https://qz.com/879092/the-us-doesnt-look-like-a-developed-co...

my point wasn't to highlight definitive issues but to point out that it's not always as simple as "we'll just tax more". You're talking about a pretty big impact to the share of the population that generates the most (economic) value per-person - it's unlikely to have no negative effects beyond complaining.

Your first response doesn't establish a causal relationship between new business creation and marginal tax rate so I'm not sure what it adds here.

Consider this: I'm from the UK, and the US government seemingly spends more per capita than here ($22,726 federal + state [1] vs £12,757 total [2]) and we have a much more comprehensive welfare system. I don't think the problem in the US is a lack of budget - we have our own problems with wasteful spending but the US takes the cake there. I mean, the military industrial complex (aka defense budget) alone is a huge cash sink.

[1] https://en.wikipedia.org/wiki/Government_spending#Per_capita...

[2] I previously cited for this here: https://news.ycombinator.com/item?id=18939418

And my point is that we already have examples of plenty of policies from similar countries. Maybe we should look at what those places have done and see where we could adopt policies. In a way, the experiments you want to run already exist. The problem is much more about bias and ideology rather than data and experiments. We are talking about the only advanced country in the world where the controlling party denies climate change (a field with plenty of experiments and data).

You mentioned that a higher tax rate might lower entrepreneurship and I provided data that shows it has already trended down while we’ve been moving the top marginal tax rate lower. I never claimed it was causal. It shows that the thing you are worried about happening if we implement a specific policy already happened after we implemented the exact opposite policy. In that context, maybe we should review other assumptions or worries related to tax rates.

"The one part of the economy that seems immune to re-imagination is the government. If we were to force it to go through the same technological revolution that the private sector is going through, we would see massive efficiencies, and massive job losses, that would free up a huge amount of capital that could be used to pay for things like medical care for all, affordable education for all, and some amount of income for all."

What would this look like? The author doesn't really back up their claims from the first stanza with this massive hand-wavey argument. I am all for reimagining the government but I'm a little wary of throwing technology at a problem and expecting it to go away.

This is just like the tired old trope of saying run government like a business and it will fix everything. The government is in fact being transformed by technology. The government funds primary research that is the innovation behind the technological revolution.

It's unpopular here but AOC is right on the money about increasing marginal tax rates over $10 million. The American market is unique and we can support it. All this talk of capital and billionaires fleeing is FUD.

> The government funds primary research that is the innovation behind the technological revolution.

Why is this gospel? Let me tell you two experiences I had:

1) I worked in a bioenergy lab. We were on a DoE grant. The program manager, who had a BA in biology, did not know what a promoter was.

2) I was asked to write a DARPA grant. I did not particularly want to work for the military, but had to as a personal favor. I deliberately wrote it so that anyone with half a brain would look at it and say "that's too little work for two years". It was awarded.

I could go on, but these were the two most entertaining ones. The others are depressing.

What's the point. One. Government science initiatives are run by idiots. This has been going on for quite a while (installing a nobel laureate at the top doesn't matter, as evidenced by the first anecdote), and that's largely because you have to ask yourself "who goes to work in the labs and who becomes a program manager" and when they get "outside experts" usually it's professors and the professor promotion pipeline also is horribly broken away from "competent scientists".

Two: In the context of the bigger question, increasing marginal tax rates won't help. The big problem is that government mostly gives money to the already-wealthy (I didn't get paid much for that DARPA grant, but I can tell you most of the money for the work I did went to the executives at the small company that got the SBIR). Without getting into how this money comes from stealing from the poor, consider that maybe we look at politics wrong - we think "people have no political power because they are poor" and consider that maybe it's actually "people are poor because they have no political power (to get grants, etc)".

It’s sad how your lived experience is getting downvoted just because it doesn’t line up with peoples’ almost religious faith that the government is wise and government investment in science is always a good thing.

ok here's one of the depressing ones.

When I was on the DoE grant, the place I was working for was applying for a biology DARPA grant (different office from the DARPA grant that I was on later, that was in CS). At the time, Arathi Prabahukar was the DARPA chief and it was being whispered that she was very much grooming one of the "meta-PMs" (I don't know what to call it, but a head of a group of program managers) to a key part of her administration and possibly even her successor someday.

So there I was, at the head of the research institute's very nice mansion overlooking the La Jolla shoreline and we were throwing a party for the DARPA PM to try to, uh, nudge the person towards funding the project, basically currying favor. I guess us plebs (postdocs) were invited because it was necessary to show off that we did indeed have some smart people around.

Anyways, we didn't get the grant. Around that time, though, a friend and I were enjoying a bit of postdoc-schadenfreude following several science controversies (through retraction watch and pubpeer) and a huge fight broke out over a story that is now called "stripey nanoparticles". In short, a postdoc at MIT was asked to repro some results in the lab and couldn't and was convinced (and made very convincing arguments) that the previous PhD student's work was entirely an instrument artefact. This postdoc was then abused, retaliated against, and railroaded by the Principal Investigator (MIT Professor). Suddenly I noticed that the PhD student's who produced the unreproducible work name was familiar -- it was the DARPA head PM! The head PM's PhD thesis was basically all junk. Really I don't mean to criticize the PM, for this, in particular there should have been more guidance from the MIT professor. But the point is that DARPA just looks at the person and says 'hey, PhD from MIT, must be smart'. There's no deep review.

So we were taking bets on how long the head PM would last, and it was about two or three years before the PM disappeared quietly from DARPA activities. I think eventually the furor around stripey nanoparticles got to be so bad that politically the PM's career in the government was effectively iced.

I was curious as to what the PM is doing now, and it turns out that - no joke - CTO at a microfluidics-based medical diagnostics company.

A big question is which marginal tax rates.

Because whilst millionaires mostly aren't going to run away from their homes and business, a $10m income tax isn't difficult to turn into equity grants or royalties paid to a holding company etc for the relatively few people earning that much in salary rather than on their capital. Which means the net result might be millionaires structuring their income in a way where they actually pay less tax without any running away at all.

If you take the more radical step of slapping the marginal tax rate on dividend income and capital gains as well, you start significantly changing investment behaviour: if you don't allow writeoffs for losses then VC becomes a really, really unattractive way to park your money, and if you do allow writeoffs for previous years' losses you might well be making the risky punt relatively attractive. Obviously changing people's investment behaviour is a desirable side effect, but it's something that needs very carefully thinking though

If you really want to change the imbalance between rich and poor you probably go after untaxed extreme wealth rather than earned income though...

> If you take the more radical step of slapping the marginal tax rate on dividend income and capital gains as well, you start significantly changing investment behaviour: if you don't allow writeoffs for losses

Why on Earth would you not allow write-offs for capital losses? Heck, if you are taxing capital gains as normal income, there's no reason to limit the deductibility of losses against normal income to a small amount per year with carryover the way we currently do (though for the same reason you might want to allow people to recognize gains in advance of or defer part of large ones after realization, you may not to allow deferring recognition of some portion of large losses.)

I finished the sentence you've truncated on the assumption that the government would choose the option of allowing write-offs rather than the investment-killing theoretical option of not doing so. But that approach radically shapes investment decisions too: capital will be allocated to riskier projects when the government takes 70% of a good year's return on capital but allows capital owners to write off years of losses against it than when the equivalent tax rate is 15% or 20% of a good year's return on capital. Sometimes that might actually be a good thing for the economy, but either way the effects are a lot more complex than the government simply earning higher revenue.

> capital will be allocated to riskier projects when the government takes 70% of annual return on capital but allows capital owners to write off years of losses against it than when the corresponding tax figure is 15% or 20%.

I'm not convinced that's actually true at the level of large investors; as long as write-offs are allowed, the break even point is the same (and a lot of big investors are corporate and corporate capital gains are taxed as normal corporate income, so are unaffected by personal capital gains shifting from preferential rates to normal personal income rates.) The big difference for write-offs comes from smaller, less diversified individual investors if you allow full write-off against regular income rather than limiting to $3000 a year.

The breakeven point looks the same until you factor in inflation (assuming no relief for that) as a benchmark and realise that at 70% tax you need ~9% annualised gross returns instead of ~3% to beat it (but with writeoffs for bad years, that's still achievable). Even with the superrich already being risk tolerant and willing and able to pursue high yields, that's going to see some rebalancing of portfolios

Obviously this doesn't apply to regular public companies and financial institutions not paying 70% tax rates, but we could expect to see corporate vehicles entirely controlled by people paying 70% tax on dividends and capital gains from them behaving a little differently too.

David Graeber argues that government is already made in the image of corporations.

The Utopia of Rules: On Technology, Stupidity, and the Secret Joys of Bureaucracy



My core, motivating principle is helping people help themselves, help those who can't.

My second motivator is fairness, whatever that looks like.

If I was King, I'd:

Invert our current welfare state, from top-down paternalistic to bottom-up empowerment. UBI, more or less.

Switch our healthcare from fee-for-service to wellness and prevention. Incentivizing keeping people healthy over profiteering the treatment of disease. aka Capitation Model

Change education from grades and scores to achievement, experience, and competency. Think merit badges from Girl & Boy Scouts.

Fully extend property rights over the commons, creating efficient marketplaces for water, air, land, etc.

Require all accounting to include all externalities.

Break the duopoly by changing our voting systems to approval voting (executives, issues) and proportional representation (assemblies) as appropriate.

You would probably have to run government like a company which basically means a dictatorship where management makes all decisions.

How would that work, because a government can't lay off citizens.

Plenty of totalitarian states have laid off citizens. By the millions.

The exact opposite approach would be better. You want it to work like a healthy part of the economy, which means companies of all sizes competing to provide better services at lower costs.

Who makes the decision to pick the best service? Essentially government contracting in theory works exactly like you are describing.

Government contracting is heavily incentivized to privilege companies which have close ties to government officials. Have a look at the political scandals of the last 8 years in Brazil. Nearly all of them had to do with officials getting “favors” from companies in exchange for government investment and contracting deals.

As long as the government deals in the peoples’ money instead of suffering from its own choices, you cannot compare government contracting with the open market.

I think one of the virtues of the article is that you can make a case for the fact that the government must be terribly inefficient at achieving its goals, based on evidence from parts of the private sector that have or haven't gone through disruption, without getting into the details of what to change.

A good place to start combatting inequality is the education system. It's a long-term bet, but improving our schools, the information they give students, and the skills they prepare them with for life will vastly improve their chances of success.

The "obedient worker" model of education is obsolete. Kids should be given more freedom to explore (a la the Montessori Method). They're inherently creative and we should nurture that, not stifle it. Curricula based on practical work that teaches high-level concepts like organization, perseverance, and patience would do wonders. Add in basic finance skills and boy howdy.

Give a kid context and I'd bet they'd shine. "Okay kids, we're going to learn mathematics by learning how to design a space shuttle." That is easily a full semester/year long project that could touch on a TON of different topics. Kids wouldn't be left out because different jobs in designing the space shuttle could be assigned, each touching on core concepts (e.g., "hold a successful meeting with five other students to decide what happens if an engine fails").

Education systems are highly local. The Zuckerberg kids aren't going to Cesar Chavez Elementary, or any of the other public schools, and will only know the children of other ridiculously rich people. You need to take steps to actively combat that kind of class separation.

I'm not saying that rich kids shouldn't get a good education. I'm saying that every kid deserves a good education.

Which is why this is a Department of Education level of implementation. I'm not talking about "daddy, they don't have juice boxes" type of schools, I'm talking middle of Iowa, watch out for that loose bail of hay on the road public schools.

Designing those programs can be done in a way that teachers can be taught how to teach them. Not easy or quick, but doable.

Ultimately it's a matter of admitting that the current education system doesn't work and start a national effort to recruit minds that can design a new one (and then actively start developing it and testing it).

With public sector unions nothing will be able to change.

Charter schools are basically government subsidized private schools for "middle class" kids who live in resource poor public school districts. They are like magnet schools but they were opened up to private and for profit entities. Parents like them because they concentrate well motivated kids. Republicans like them because they will help bust unions. This will basically continue the current socioeconomic stratification we have.

We would do a lot better investing in intensive early childhood education, providing after school care as well as subsidizing 3 meals a day to our kids.

Here's the problem, though: what do you do about individuals with a low IQ? Not even crazy low, but low enough that STEM fields are out of their grasp? There's little evidence that IQ can be substantially increased through education... and I think those of us who pursued that path tend to incorrectly assume it's open to anyone if they just had a better school.

I doubt low IQ is a significant problem in public education. I'd wager the #1 problem in our schools is bad parents. Schools are now expected not only to teach, but to parent students as well.

A kid going to a crappy school who has good parents is still going to thrive. They will be motivated to complete homework, can receive help, etc. A kid going to a crappy school with crappy parents is going to crash and burn. Heck, a kid going to a good school with crappy parents is still probably to crash and burn. There may be more of an effort to help from school administration, but generally... crappy parents don't care if their kids don't do the homework, won't (or can't) help their kids when they get stuck, and blame the school system (or teacher) for their child's failure.

Bingo and we should anticipate this. Education programs (and the support systems around them) should be designed as though parents are _not_ going to participate. Simultaneously, though, there should be educational programs for how to parent. It's not "obvious" to everyone. The majority are in the "we had sex cause' it felt good and now we have a rugrat" bracket.

Which is why every aspiring egalitarian society work hard to take the parents out of the equation. Day care in Sweden cost like €100, and you get that in cash benefit for having a kid, which means it is essentially free. Successful societies aren't in effect more sophisticated, they just make it easy for themselves from the beginning.

1.) Understand the cohort. Group kids based on cognitive abilities and reevaluate on an interval (once per year, for example).

2.) Match the level of ability to the task. Practical work doesn't have to just be STEM. For example, "make sure the meeting room is clean, all attendees have a glass of water, and the lights are turned on." Simple checklist-style work that empowers the individual while being aligned with their abilities. It's important: keep reiterating to students that no one is "better" than anyone based on their jobs and that each is integral to the task at hand.

It'd do wonders if we quit belittling people just because they lack a certain level of intelligence.

The only way to do this without creating a hierarchy would be to group people in individual subjects. That would however be a logistics nightmare.

.. Unless we embrace the real revolution: computer based learning at your own pace with teachers guiding individual students.

> group people in individual subjects. That would however be a logistics nightmare

You mean... like... in college?! Especially with computers, this is a piece of cake. Collect all preferences, add weights/priorities and some hard constraints (e.g. no class after 3pm), throw it into a SMT solver to generate individual student's schedules, give schedules to students & teachers. Done.

The problem is that a higher teacher:student ratio may be necessary and younger students can't neccessarily travel as far. (Some parents don't have cars, sparsely populated areas, etc.) For cities I think this is a no-brainer however.

Exploratory computer assisted learning like Khan Academy would be possible. It would also change teachers role from public speaker to guiding individual students who are struggling or are curious.

We could easily have these two models function side by side depending on population density.

The problem is how much are you willing to pay for the clean meeting room service? With transportation time and cost I don't see a way to scale that in a manner that pays a decent wage.

That's irrelevant. The point isn't the cleaning service, it's teaching kids that they can _do_ something. The next step up from that is "hey you did that well, how about trying to paint the shuttle." Scaled encouragement over time.

Contrast that with "sit down, shut up, and look forward" and yeah, you're going to have a lot of idiots running around that aren't worth much economically.

I misunderstood and it turns out I agree. Something like tech school or apprenticeship is how that type of training happened historically. Mike Rowe has a foundation pushing a similar idea that may be along the lines of what you are talking about.


Bingo. Cognitive skills are compensated at a much higher rate.

While I totally agree with how obsolete is the current education system, as a person who has worked in several experimental education projects I still have my doubts that semester/year long projects work well.

Kids and teens have very short attention span, when you say let's create a space shuttle they want to do it ASAP. After few days working on the same project they usually get very tired and the supercool subject becomes another "normal subject". Furthermore, not every kid wants to design a space shuttle, some wants just to dance, others draw graffiti, some others just sing or even reading a book might be more satisfying for some. What I want to say is that education is a quite complicated task. Parents and their contexts play gigantic roles that superfun and shinny activities at school cannot replace.

I think inequality have to be fight from many angles, better jobs, universal health systems, investing in 3rd tier neighborhoods, less taxes for people who have less, helping people who have shi jobs and cannot afford to even search for new ones to have better ones, better integration of immigrants in the cities, etc, etc, etc

Some examples of some of those projects



edit: format

> Kids and teens have very short attention span, when you say let's create a space shuttle they want to do it ASAP.

So we teach them how to rein that in.

> not every kid wants to design a space shuttle, some wants just to dance, others draw graffiti, some others just sing or even reading a book might be more satisfying for some.

Dance: choreograph the ceremony before and after the launch.

Graffiti: design the space shuttle's logo, branding, and marketing.

Sing: see dance line above or other vocal needs like recording audio instructions for procedures or status updates on the mission.

Reading: prepare a flight manual.


The space shuttle is one example. My point is that adults need to apply creativity to generating multiple options, not just trying to make everything a one size fits all solution. Take some of the folks who write Hollywood scripts and have them create interesting projects for learning. Hell, we could even take movies and use those as our foundation (makes it fun for the kids and parents).

If this is something you're interested in working on, shoot me an email: me@ryanglover.net.

Here's a structural thing we could do to improve our education system. Give teachers more money. And on top of that fix, change the career path incentives to keep the best teachers teaching. Right now, the best teachers are financially incentivized to stop teaching and become administrators. Pay teachers more, and pay administrators less: this decreases administration bloat, and increases the competition for being a teacher. The difficult thing to swallow is that we'll probably have to overpay poorly performing teachels for longer than one election cycle.

Its an endemic problem in almost all industries that upward mobility means "management" despite it often being a completely divergent and esoteric skillset from the job you were hired on for, and often one that is less resource intensive to train for - learning good managerial skills can often be a weekend seminar, versus the years it takes to become competent in a companies codebase.

But of course the boss sets the salaries so thats where the money ends up going.

I wholeheartedly agree. I was lucky enough to chance into a "project-based learning" alternative program in Jr. High, where we had fewer, longer class periods and freewheeling, long-term multi-discipline assignments.

Although I performed poorly in traditional academics, my belief in my creative capacity and industriousness—acquired during this period—has never left me, and forms the basis of the autodidactism that has facilitated my career.

I remember reading that it was proven that the more basic subject the more structured educational methods are beneficial (i.e., an ability to teach is more important than how well you know the subject at earlier stages) — you are not a special snowflake.

I would heartily recommend "Learning how to learn" course (free) and the corresponding books.

That headline from The Hill seems a bit disingenuous. The full quote was:

> “I do think that a system that allows billionaires to exist when there are parts of Alabama where people are still getting ringworm because they don’t have access to public health is wrong”

And also:

> “It’s not to say someone like Bill Gates or Warren Buffet are immoral people,” she said. “I don’t believe that.”

Both of which seem basically in agreement with Fred's response to the quote.

Ringworm is an odd disease to pick out. It's not a parasite, it's a fungal infection of the skin and quite common. Even if people have access to quality healthcare, they can still get ringworm.

And in fact, you can self-treat with over the counter anti-fungals.

I think the author of that quote doesn't know what ringworm is.

Correct, "(Also, for what it’s worth - I meant to say hookworm*)":


Hookworm, on the other hand isn't. Hookworm is attributable to a government (and its people) failing its people -- not disparate from Flint's water crisis. Basic sewage (septic in most cases) maintenance not being performed.

Unfortunately, the primary solution, condemning the buildings on these lands, could be seen as forcing people off of their land and hurting generational wealth growth -- even though for the underwater mortgage amounts and considering the land should be condemned -- and competing mortgages/rents to cities with sewer systems would be less...

Reading the article, this is happening in areas of septic tanks, not gov’t provided waste treatment. In addition, they are building on flood prone land where septic tanks don’t work.

Seems more like somebody screwed up when they built a community versus some epidemic due to poor healthcare.

You are 100% correct. I remember wrestlers getting it in high school and it was easily treatable.

AOC corrected later that she misspoke, meant to say hookworm.

Yeah. Author claims AOC/followers are ignorant yet falls into the clickbait headline trap. Yikes.

I just don't understand how inequality can be truly eliminated in a world where people are motivated by money and power. Until you can build a society where people actually love and care for each other instead of themselves, a certain percentage of the population will always try to become more equal than the others.

And, they will become more equal than the others, just like the pigs in Animal Farm, because once you have power, you can change any rules.

I don't think the goal is to build an "equal" society, which god knows will never work because people are just so different. I think the ideal goal is to build a society which even the lowest members of society have their basic needs met, a meal, a roof, health care.

I would go one step further and say that all levels of society should benefit on average equally from growth. It's ok that higher incomes get a larger share but that share shouldn't be growing disproportionately as it has done over the last decades.

you just described the system of the scandinavian countries

This is correct; this is even what the socialists argued for[0] and at least according to SEP[1] there is only one identifiable proposal of a "perfect" equality (as some in this thread have taken it to be) in the history of philosophy. The confusion over what [in]equality means and what can or should be reduced is a sticking point in a lot of political debates.

[0] "When we say that experience and reason prove that men are not equal, we mean by equality, equality in abilities or similarity in physical strength and mental ability. [...] It goes without saying that in this respect men are not equal. No sensible person and no socialist forgets this. But this kind of equality has nothing whatever to do with socialism. In brief, when socialists speak of equality they always mean social equality, equality of social status, and not by any means the physical and mental equality of individuals." - V.I. Lenin, "A Liberal Professor on Equality" (1914)

[1] "Simple equality, meaning everyone being furnished with the same material level of goods and services, represents a strict position as far as distributive justice is concerned. It is generally rejected as untenable. Hence with the possible exception of Barbeuf (1796), no prominent author or movement has demanded strict equality."

No, it won't work.

You get inequality even in money-less societies. E.g. most people use Instagram not for money, but they still compete, and feel good/bad due to inequality - they compete for likes, followers, photo quality, ... - in other words, status.

It's deep in the human psyche. I don't think we can escape it.

I think most of us taking up this fight are perfectly fine with people fighting for status and visibility if there aren't children dying of curable diseases and homeless people dying in the streets.

> there aren't children dying of curable diseases and homeless people dying in the streets

Then that should be the goal, not eliminating inequality. At least, that's my goal - I see more downsides than upsides from eliminating inequality altogether (e.g. the downfall of communism, no Elon Musk, etc)

There's a ton of prisoner's dilemma-inspired research into this that has many types of answers to this question. Not perfect answers (perfect equality is not attainable), but interesting options still.

For example, as soon as you have a system that allows for punishing each other, then people turn out to be willing to punish cheaters even at their own expense. And the addition of that to group dynamics tends to make it self-stabilizing.

If many in the group can chip in to gravely punish a cheater at a small cost to themselves, the group can become quite stable and egalitarian. But I can also see how that can be stifling and oppressive-by-majority (think small-minded villages).

The thing is it's not just money and power that motivate inequality, it's freedom. In a truly free society, some people will turn out to be particularly talented, or motivated, or hard working, or lucky and will end up benefiting from those things. Other people will choose to do things of limited or no economic benefit, or choose or only show any ability at undemanding jobs, or be the victims of illness, accidents or other obstacles. Then there's always a few people who are criminal, or will cheat the system.

The thing is we do need to encourage people to want to work hard, find something they are talented at and do jobs that have large economic returns for themselves and society. We all benefit from this.

People who work hard, take risks, build business, employ lots of people and provide valuable goods and services to their customers deserve to be well compensated. If they are to grow their business and employ people, how are they going to do that if they are not well compensated?

I do believe in a fair and progressive society. I live in the Uk and I think on balance we get this about right. We have a functioning social safety net, including a world class health service that's free at the point of use. We have a decent education system that's free for all up to secondary level. I wish we had free university education, but that would be tough to find the funds for. Yet we also have a dynamic and productive economy that funds all of that.

The thing is you can't have the social safety net and free health and education without a well functioning economy. The resources have to come from somewhere. It's not perfect by a long shot, but not everyone that is wealthy got there by cheating.

One of the few quality comments in this thread. Thank you.

I agree.

I'd like to clarify my reply to the GP is only with regard to the UK not really being fair and progressive to all who are in its society. With regard to the other items, about the importance of reward and economy, etc., I agree.

I live in the UK too, and sadly I must disagree that we have a fair and progressive society or a functional social safety net at the moment.

There are a great many people outside the system, for whom the system doesn't function.

Many different groups. Abandoned elderly. Abandoned young people leaving care. But I'll talk about just one of the groups for whom the safety net is failing - migrants.

There is a large cohort of people who are long-term denied access to NHS care ("right to healthcare" is a boolean flag in a database), denied lawful access to housing ("right to rent anywhere" is a boolean flag in a database), cannot claim any government benefits ("recourse to public funds" is a boolean flag in a database), and cannot work -- absurdly, not even volunteer work -- and so, perversely, cannot pay tax.

Try imagining how it feels to have an easily cured, but terminal if untreated disease in that scenario. And try to imagine what happens if you are pregnant or break a leg.

Yes, pregnant people avoid hospital in the UK for fear of discovery and forced break-up of their existing family.

Try imagining being dependent on friends to provide food and a place to sleep. Because no housing agency will rent to you, and you have no money, and no matter what your skills, you're not allowed to use them.

Try imagining getting your healthcare from secret places, run by doctors who do it on the side, and it has to stay out of your medical records,

Try imagining every business you start has to be an illegal business, no matter how innocent it is.

Try imagining everything you make, everything you build, everything you own, and everyone you know and care about including your own family, could be separated permanently from you in a midnight raid at any time. Yes, families are permanently broken up in midnight raids.

Try imagining your mental health, and try imagining that you daren't speak to any therapists about what's really happening in your life.

And try imagining, you have done everything by the book. You are innocent.

Every application, every fee, every bit of paperwork, every bit of evidence. You're married, you've been here for 30 years, you have a connection to the UK, you've paid £x0,000+ in fees, you've been bounced around the system for years or in some cases decades in this state. But the system rejects you, or keeps you in limbo, for reasons lawyers can't explain, civil servants don't explain, and judges overturn - if you're lucky enough to afford to get in front of one. You are innocent, but screwed.

I know people in that kind of situation. Because of those circumstances, they rely on friends to provide all their food and accommodation, they can't use basic services to look after themselves, they are permanently scared of losing everything, and they daren't speak to almost anyone about it.

Those are the lucky ones - they have friends who will do that, for years, at personal cost to themselves.

I have a lot of admiration for friends who will do that. And they do it secretly. You might know someone, without knowing.

It's a big strain on everyone, and it certainly isn't a functioning social safety net.

I don't regard it as a fair and progressive society if it's "more fair to some than others", to paraphrase Orwell.

The worst part, for me? That so many people of the UK seem to celebrate this. They want more of it. There is an unpleasant "I've got mine, and they deserve it" attitude all over the place. Certainly not everyone is like that. But too many are. Lead, perhaps, by the current PM, who was chief architect of much of the hostile environment (it hasn't always been like this in the UK, it got much worse), and continues to encourage it.

+1, excellent reply. The May hostile environment policy was a horrible travesty, the most appalling result of which (that I'm aware of) was the persecution of 'windrush' migrants from the Caribbean.

However surely the majority of the people in the situation you describe entered illegally or are avoiding review of their immigration status? I was under the impression that legal asylum seekers do get financial assistance, are entitled to medical treatment and can work if their application takes longer than a year to process. Are you saying that the police are raiding the homes of asylum seekers that entered legally, have registered with the authorities and have an application for asylum under current review?

This reminds me of a quote by the historian Will Durant.

"Nature smiles at the union of freedom and equality in our utopias. For freedom and equality are sworn and everlasting enemies, and when one prevails the other dies."

Created an account just to thank you for the post; one of my favorite Will Durant quotes. And so true.

One thought experiment is to think that people are motivated by love and empathy to their family and neighbors and future generations and it's this very thing which leads to war and power and inequality. People are motivated to succeed for their family and society not for power and money on its own. They want their sons and daughters and their family and their family's family to also do well. The manic evil tycoon is a fairy tale.

Now I think Marxism or communism also agreed that people were motivated by love for their family and society so they sought to get rid of the family. more Brave New World than Animal Farm.

You clearly can because some countries do much better than others. The trick is to avoid throwing out the baby with the bath water.

Inequality is a consequence of technological progress and barriers to entry.

Some human activities today have high level of productivity.

A doctor can only serve one patient at a time. Top tier athletes or actors can serve millions of people simultaneously.

Local bar can serve fewer people than Facebook and those who own a local bar will be much poorer than those who own Facebook.


Another component are barriers to entry.

Some professions are relying on brand power (acting) and others on credentials (surgeons). Anyone can do a job of a janitor, but not everyone can be a highly skilled engineer or surgeon or be highly recognizable name in entertainment.

Some businesses have barriers to entry (economy of scale, networks effects) while others are in fierce competition.


People who are poor are doing relatively unskilled, low productivity work (service industry professions). People who are wealthy are relying on high productivity and barriers to entry.

Why is Zuckerberg so wealthy? Because Zuckerberg's business can serve billions of people every day directly and has monopoly power due to network effects. Some low level Facebook employee is selling his services to one company which is a low productivity activity (they are not selling anything directly to billions of people, but selling services to one company) and those services can probably be done by millions of people around the world so the barriers to entry are low.

Once you understand this, you will realize that inequality is a structural thing.

Totally agree--look at ANY communist experiment. All ended up with massive amounts of inequality (in addition to incredible poverty).

Jesus this was shit post. He doesn't make any sense or have ANY decent argument in favor of billionaires. He just rambles on about how "I know a few and they don't seem like bad people"


Billionaires exist because any system where people are given different opportunities when starting out end in vastly different outcomes.

Modern business scales to the point where you can create something in your basement that people around the world can buy.

Bill Gates isn't 100 billion times smarter than the top software people he worked with at IBM. Yet, he is worth that much more than them.

Income inequality destroys the social fabric of a community. And our country will continue down it's long dark path as long as billionaires and the rich elite hoard their wealth and power from middle and lower class Americans.

Billionaires exist because any system where people are given different opportunities when starting out end in vastly different outcomes.

However, if you look at the historical record, there are many groups who are seriously disadvantaged who succeed, while other groups are advantaged or neglected and yet stay poor. One of the key differentiators is cultural isolation. Groups can remain culturally distinct, but still enter into the mainstream of cultural and economic life. These groups generally prosper. (Call these participation communities.) Other groups remain culturally and economically isolated, often through the machinations of their own elites, and they remain poor, often developing in-group militancy. (Call these isolation communities.) German immigrant groups throughout history are interesting in this regard, as some German emigrant groups were participation communities that prospered, while others were isolation communities who fell behind economically. Chinese immigrant groups also contradict the "different opportunities" narrative by arriving on new shores poorer than the poor of the new country, yet pulling themselves up into the middle class in several generations. (So success isn't genetic. It seems to be carried by culture and it's transmissible.)

Bill Gates isn't 100 billion times smarter than the top software people he worked with at IBM. Yet, he is worth that much more than them.

That is how Pareto distributions work. Shakira isn't orders of magnitude more talented than other performers who have remained obscure. Effects akin to Network Effects accrue to lucky individuals who were in the right place at the right time who had implemented "GYST" and made the right moves.

Income inequality destroys the social fabric of a community.

No disagreement there. Crime is correlated with relative poverty. Everyone does need to feel they are full participants, and have pride as such in the community. Then again, the historical record shows that trying to scale egalitarian/communal societies past a relatively small size tends to result in decaying and destroyed social fabrics as well.

>There are many groups who are seriously disadvantaged who succeed

Yes. Cultural advantages exist. It's a part of the issue of income inequality.

>That is how Pareto distributions work.

I know. That's my point. Redistributing excessive wealth would counter this.

>Then again, the historical record shows that trying to scale egalitarian/communal societies past a relatively small size tends to result in decaying and destroyed social fabrics as well.

I am not talking about everyone being a hippy and living together in harmony. I am talking about capping wealth or income and redistributing it.

Yes. Cultural advantages exist. It's a part of the issue of income inequality.

Cultural advantages not only exist, but they clearly have tremendous effects. Not only are the effects large, but they also tend to be very efficient with respect to cost. If people are really serious about addressing poverty, then this should be one of the first places they look.

However, when I look at the policy positions of my chosen tribe (the Left) I see it favoring policies which erode the transmission of wealth-generating cultural knowledge. I see policies which encourage isolation communities. I see policies which have resulted in the dissolution of families. I see the glorification of subcultures which are anti-education.

I am talking about capping wealth or income and redistributing it.

I think some American billionaires would do well to be more like wealthy elites in Japan and Sweden. I think it would be very good to see some of that wealth go towards the building up of the physical and cultural commons. I suspect it would be far better if that were voluntary, than if we set a precedent by making it forced.

The properly wealthy have done very little for equality in Sweden. Sweden also has relatively large wealth inequality. Egalitarianism in Sweden definitely hasn't been voluntary (and is more and more of a joke every day).

> where people are given different opportunities

People will always have differnet opportunities, because parents always want to help their kids start at better position in life than their peers. It's a completely justified and human desire.

> Income inequality destroys the social fabric of a community.

No, forced and unnatural power relations, like forced equality destroys the fabric of a community. In Soviet Union, my engineer parents and their parents, who have spent years of hard intellectual labour in their craft, have had almost the same lives as workers engaged in the most basic hand labour, who have been coming to their workplace drunk for years and never even faced a danger of unemployment because of their horrible work ethic, because "social country" couldn't allow it. Communities this have created have been so much more toxic and awful than anything I've ever seen in any western country.

>my engineer parents and their parents, who have spent years of hard intellectual labour in their craft, have had almost the same lives as workers engaged in the most basic hand labour, who have been coming to their workplace drunk for years and never even faced a danger of unemployment because of their horrible work ethic, because "social country" couldn't allow it.

Good? As long as your parents were comfortable and safe, why is it a problem that less "deserving" people also were? Comments like yours sound less like "hard work deserves success" and more like "as long as I am above someone else, I'm happy." It comes up a lot in discussions of minimum wages - a nurse was fine with $17/hour until a fast food worker also makes that, suddenly it's an outrage.

Next time you're involved in a group project and end up doing all the work while the rest of your team receives the same grade, get back to us on what you just wrote.

We're not talking about grades, we're talking about the basics of a dignified life; food, medicine, security. I absolutely will take on more burden to help those who are less fortunate. Get back to us when you grow up and grades aren't your primary concern.

> I absolutely will take on more burden to help those who are less fortunate.

Looks like you want to make your own, free will decision about what to do with your money. That's what private charities are for — that way, we both get to decide for ourselves, exercise our choice and you get to feel morally superior (and get the deserved praise), and someone else gets to use their money in other way.

When, however, state takes this money from you without giving you any choice over it, using it's monopoly on violence to force you into doing that, that's no longer your moral decision. That's just inevitability.

Are you one of those "taxation is theft" freaks?

Are you trying to bring this conversation down to labels and slurs?

Applies to team projects in the professional world as well. Add to that the slackers that kiss up and get that sweet promotion you wanted based on your blood and sweat. World isn’t so simple like you’ve made it out to be son.

The world also doesn't have to be the barbarous rat race you seem to be resigned to, son.

Yes, I am competitive and so are my motivations. Are you trying to paint it as something bad?

Income inequality is forced power relations.

And we don't want an end to capitalism, we want a cap on it and limits.

The problem is how much power the elites have vs. a person with median income.

If a billionaire sues me, he will win. There is almost zero I can do about it. It almost doesn't matter what happened. I am powerless to stand up to them. Same with billionaire corporations. I have NO power to stand up to them.

The greater the income inequality, the greater the difference in power dynamics in a market/currency based economy.

There is very little justice for poor people and anyone trying to fight a billionaire.

This topic is of course ripe for a flame war, but what I think is almost always missing from this discussion is that not all "elite" rich people are all the same. How people got and use their wealth is very important in the consideration on whether or not "income inequality destroys the social fabric of a community". Paul Graham's essay "How to make wealth"[1] is a great read on this topic. One of the key values that emerged in the West was that if the people with the power of violence in society do not just take everything from the productive people, the whole society becomes much better off.

The people who take by force, the rentiers, the rich who steal by fraud, the ones who just spend their days on yachts and luxurious island estates eating caviar and drinking champagne, these rich elites should be scorned and reviled. We should strive to make laws to punish them and take their wealth and power.

But we do want inequality in the amount of society's assets that can be accessed by people. Hard working people who have the skills, talents, networks, drive, etc. to get important, very difficult, things accomplished should have access to greater wealth so they can do great things for society. Musk created and is the leader of SpaceX that is building reusable rockets. He also spends a great deal of time and effort running Tesla, which made the first great electric cars and is forcing positive change on the whole automobile industry. Jobs and Wozniak built and sold great personal computers. Gates may have been a bit of an asshole when running Microsoft, but he was part of bringing computers to the masses and he seems to be really interested to doing good in the world. A billionaire who has almost all of their productive assets tied up in productive activities in which they are a critical component, can do great good. They are not consuming but producing. Look for people who strive to produce win-win situations. A free market system (a system where people are free to trade with anyone else) with a strong rule of law and allowing people to keep what others give them seems to work pretty well. 80% income tax rates are not a good idea (and shouldn't we really tax wealth and not income, if we want to get rid of the idle rich?).

It does not seem to me that governments will spend assets better than the best of the wealthy elite, just move it to someone that is much more unaccountable. One should remember that there are hierarchies that are built on competency and cooperation as opposed to those built on the power of violence. We should support the former and tear down the later. A hard problem, but a least something better to strive for then just generic "tax the rich" refrain.


> The people who take by force, the rentiers, the rich who steal by fraud, the ones who just spend their days on yachts and luxurious island estates eating caviar and drinking champagne, these rich elites should be scorned and reviled. We should strive to make laws to punish them and take their wealth and power.

Of course someone stealing or defrauding needs to be punished, but what's wrong with eating caviar and drinking champagne on a yacht in general? :-D

> Gates may have been a bit of an asshole when running Microsoft, but he was part of bringing computers to the masses and he seems to be really interested to doing good in the world.

well, that's certainly a really, really interesting cover for his actions at MS.

he pretty clearly used anti-competitive behavior to gain an advantage. if you acknowledge that as well, then what you seem to be claiming is that it's ok, given that he's now a good guy, doing various good works around the world.

facts as they are, that wealth may not have been concentrated among this individual had his monopolistic behaviors been curbed earlier or crushed outright. so, yeah, we should be grateful that bill is doing good things for the world, but there's no reason to use that as an excuse for this sort of brazen lawlessness-cum-world savior archetype that seems to be what a lot of really, really wealthy people are going for.

> It does not seem to me that governments will spend assets better than the best of the wealthy elite, just move it to someone that is much more unaccountable.

It seems to me that history shows that a wealthy "elite" will spend assets in order to, directly or indirectly, increase its own wealth; and will do this without answering to anyone, many times not even the Law.

Whereas a democratically elected government will/should spend assets to increase its society/voters' wealth, and answers to its voters regarding how their money is spent. What's tough about this system is that it requires voters and taxpayers to be active in monitoring their government.

Your argument doesn't make much sense. What takes away people's profit isn't violence, but competition. When people get really rich it is because there was little competition. Bill Gates is ultimately rich because for software you are granted a monopoly by default which means other smart people can't de facto compete with you. You can't really on the one hand say companies like Microsoft and SpaceX are great, and on the other wish they make a lot of profit. Because that essentially means there will be less of them in the market.

Elon Musk, Bill Gates, and all the other brilliant entrepreneurs that propel our society into the future are most often not motivated by money.

Elon clearly doesn't give a shit about his money. He only wants to own and control his companies. His wealth is simply a byproduct of that.

Capping billionaire wealth won't stop innovation.

If you just let them control their companies, then they probably will work just as hard if you take away their money over a billion dollars.

It will help to stop the growing inequality that will continue to destroy our society.

The government is controlled by the wealthy elite, so I don't get your point. Their job should be just to redistribute wealth with (ideally) an universal basic income.

But, the elites don't want that because it's too simple. Basic income redistribution scares the hell out of them and they will destroy the country rather than give up their beach house.

While I respect Paul Graham's career and his abilities as an entrepreneur (I mean we are doing this on Hacker News), I am always very skeptical of wealthy people talking about "How to get wealthy".

And his essay isn't bad, but it's still coming from a place of insane success, much of it not duplicatable for 99% of the people even in such a opportunistic place like Silicon Valley (I know he addresses this randomness of success in his essay).

The wealthy elite will ruin this country. Look at our president. The asshole is walking example of shitty capitalism at it's worst. He is literally the leader of our country.

Inequality of output is not the same as inequality of opportunity. Two people with thr same opportunities may have different outcomes due to different decisions and luck.

Bill Gates leveraged a traffic light data system into a global default OS and productivity suite. It might be because he's lucky, it might also be because he saw things Microsoft's smartest hundred engineers did not.

Fund children to get food and education to the best of their abilities. Healthy adults don't deserve anything and can stand on their own feet.

Rich parents generally have rich children.

Let's take a look at Bill Gates' luck. He was at a private high school which was only of a few in the world that had access to super-ish computer. Not only that, he was given control access to do whatever he wanted.

Sure, he was talented, but if he hadn't been at that EXACT high school at that EXACT time, he wouldn't be a billionaire.

Billionaires need a shit of ton of things to go right and ALL their decisions need to work out almost perfectly.

Even when they "lose" something, if you became a billionaire, you found a much better opportunity right after you "lost" something.

The fact is the number one predictor of a person's income, health and net worth is their parents income. How do you explain that the extremely high correlation of parental income and children income?

You've just said it can be both luck and talent. This is exactly what the comment you're responding to says.

The parents income doesn't just magically create wealthy kids: money runs out. In the US, wealth controls the child's access to good education, and parental wealth may also result from good genetics (intelligence) or culture around wealth and investment.

An example: friend of mine isn't particularly intelligent, but she's wealthy because she knew the law of 72 and said no when offered a credit card (with compound interest like all credit cards) before her frontal cortex developed. Most young adults would say yes and immediately enter financial slavery.

Just because someone is talented and lucky, it doesn't justify them making $100 billion while others die from lack of basic health care.

Parental income is the highest predictor of a person's income. Nothing you have said counters this argument.

If you have any stats or data that counter it, then please provide them.

You are assuming someone making 100 billion is related to others dying from lack of health care.

It would be entirely possible for both to happen: an actual competitive health care market in the US reducing costs to closer to the rest of the first world and the government paying those costs via taxes (pretty close to what people in the US pay now).

> It might be because he's lucky

Yes, this is it.

People do not become billionaires through sheer determination and leveraging opportunities. They are in the right place at the right time (and often have a pool of capital already), and that is 90% of it. The last 10% is hard work, taking risks, and foresight.

"Rags to riches" is a story we're told so we believe that any of us can climb to the top when, really, it's a way to placate people who have nothing, and not just that, but to enlist them in unbending support for those who have everything (because, one day, THEY might be the billionaire).

While personally I don't think anyone's work can be worth billions a year, I don't think people necessarily have a problem with the dollar amount of money that the wealthy have. In my view it's the feeling of impotence and lack of agency people feel. If you work a normal job that most people would expect to work their whole lives you feel powerless for the most part. Your only option is to plug away for an indeterminate amount of time until you retire (?) And it's not guaranteed you'll work there forever as the lifespan of most jobs has shrunk.

It leaves a paternalistic relationship between the business and the average worker. They don't get to feel like they're interfacing with the labor market, they're at the will of their employer. They should be grateful that your employer provides healthcare otherwise they might actually die. Maybe they should open a GoFundMe if they can't afford it. They should respect the patronage of private donations and privately funded grants your city benefits from.

The reason why universal programs are attractive is because they give the average person a sense of agency. Because they're universal they aren't a "handout," they're part of what it means to interact with society. Everyone pays in and everyone gets paid out. But if they're not universal they quickly become handouts for the poor instead of features of society.

He says he wants a new narrative, but makes no suggestion of how we can curb inequality other than the standard Valley tech-bro "government is hella inefficient" statement.

>, but makes no suggestion of how we can curb inequality

Fred's version of "curb inequality" is different than yours.

He's saying there's moral vs immoral inequality:

- immoral inequality: billionaires exist while poor people don't have basic needs met

- moral inequality: billionaires are ok if the poorest people have adequate healthcare, education, and some UBI

His blog post is about moving the narrative towards the 2nd scenario of inequality. One can also disagree with Fred's 2nd scenario. I'm just pointing out the nuance in his essay.

I am tired of this shtick where when companies fail, it is a beauty of free market at work, but when government projects do, it is because government is inefficient and same people who keep expounding how you have to put money into all sorts of ridiculous ideas because you can't tell which one will work, turn around, lose all humility and just know how they could do better governing.

When government projects fail everyone involved walks away with money, not so when it comes to private sector projects. In fact take a look at some of the big consulting firms like IBM, they get paid more when governmental projects fail because they are paid first to implement them and second to fix the implementation they failed at delivering in the first place. The politicians who voted for the project are generally reelected and the cycle continues into the next major project.

When companies fail (because they're providing a service that not enough people want, or because they provide it too inefficiently), those companies stop using resources, which frees up those resource so that someone else can use them (presumably more efficiently, or to provide something that more people actually want/need).

But when government projects start to fail, the first thing that usually happens is that they get considerably more money to try to make it work, and that goes on for years. And when government programs don't work, or don't do something that enough people need or want, those programs far too often just keep going, for years and even decades, wasting resources that could better be used for something else.

The main difference is that companies fail with their own cash (or that of private investors) and everyone who loses money in the process had contributed that money voluntarily.

When government fails, it’s with the money of taxpayers who had no choice of not contributing and who might in fact have been heavily opposed to the failed project.

The most hilarious part of the narrative is that, when talking about the US federal government at least, a huge chunk of its inefficiency is right near the top of its spending.

Social security isn't waste. Its money that goes from taxes to people who then spend it. Its wealth redistribution, but for some stupid reason its from current workers to past workers than from the rich to the poor. But that money is by and large functioning as direct stimulus in myriad ways - most retirees spend their social security checks on goods and services essential to their life, they don't really try to save or reinvest the money that much, it provides a very consistent demand base and revenue stream to build a business for, and it alleviates pressure on the children of retirees to not have to care for them - or for much more expensive welfare programs to take care of them when destitute.

Theres probably some really nihilistic misanthropic argument that medicare is a waste, since the recipients are unlikely to make much further substantial economic contribution, but don't go arguing that you should be left to die just because you turned 70 and probably won't be "worth much" anymore.

Medicaid however absolutely isn't wasteful. Giving those without the means to afford healthcare access to it dramatically improves their ability to be productive and saves hospitals substantial amounts of money not having to provide live saving treatment for someone who couldn't afford to come until they were actually dying. It keeps people from becoming money drains on the economy by curing their ailments before they become debilitating.

But after that... its military spending. With 2.1 million active personnel and a budget of 590 billion the government is paying $280,000 per service member. The military does produce some research, and the US has some influx economic benefit from being the "world police" and largest military on the planet, but almost certainly not enough to offset the amount of money going into what is effectively a public jobs program that doesn't produce almost anything of value to anyone directly. The military does "employ" more than just its enlisted by keeping dozens of weapons contractors in business but they are then just companies manufacturing arms and weapons of war that cannot make anyones life any better. Its all a total and complete waste of money.

But of course the GOP platform is always cut everything else and spend more on the military, despite it being the most blatantly wasteful use of federal money, because its "their" jobs program, not the "others" jobs program. Spending money on the military is just a way to win elections for most rather than anything to consider a moralistic evil for wasting so much - money, lives, time, effort - on. It seems the conservative take away from the New Deal was that the guy giving someone money to dig ditches and fill them in is probably going to get the ditch diggers vote.

> the standard Valley tech-bro "government is hella inefficient"

this is not a Valley standard. this is a consistent viewpoint held for many decades by a variety of thinkers. your comment appears to just be shitting on it, instead of offering any challenge to it's accuracy.

We are talking about opinions here, tips of extremely vast icebergs, so I'll try to be careful. Disclaimer is that I disagree with Fred, agree with AOC.

I can agree with Fred that the bottom should have the basics covered, and that's the most important point here. That is, we want an economic system that allocates more resources to those at the bottom than we currently have.

Where do these resources come from? I think that the presence of billionaires is simply the other side of the mathematical equation here. Assume with me that wealth follows a power law distribution. Presumably we have the ability to adjust the shape of that distribution (as AOC advocates in some way). The outcome of shifting the power law from, for example, alpha=1.5 to alpha=3.5 is a dramatic evening out of the distribution. The curve is flatter and the top earners will have less relative to the average. So you would have fewer billionaires.

OK- instead of flattening out the overall curve, maybe you put a floor instead, as Fred argues for. What part of the distribution would you have to take from to add the extra tail weight? Most of the weight in the distribution is at the head, where the billionaires are... so I would assume it would come from there. Hence, no/fewer billionaires, no?

I think Fred's and others' broader point is that we should continue having incentives for success. I agree. Maybe a little less incentive, though.

I'm glad we have the opportunity to start discussing this topic on a national stage.

EDIT: grammar

I'm not sure what are you trying to say. Do you agree with AOC or not?!

A tax rate of 1000% won't result in "fewer billionaires" as 0 of the top 10 (and approximately 0 of the top 100 I guess) billionaires made their wealth through salary. It's almost always either entrepreneurship or inheritance or marriage or more multiple of these. Taxing income won't change that.

AOC's suggestion is a cheap political play that encourages the low-vs-middle-class adversity and might win her some votes, but really most billionaires would applaud it, because, again, they'll escape unscathed. She can't suggest taxing profits/capital gains/inheritance/trust funds of course, because then she'd make enemies of actually powerful people.

>She can't suggest taxing profits/capital gains/inheritance/trust funds of course, because then she'd make enemies of actually powerful people.

Maybe you're right, but I very much doubt it. I'm at work, so I don't have more time to research it, but I'd be willing to bet AOC will or has suggested increasing taxation on at least capital gains and inheritance. These are commonplace suggestions from the center to the left.

Well I sincerely wish they pull it off (not just cosmetically of course, but in a way that prevents all tax avoidance) but I also sincerely doubt they can.

I agree it’s a political play. It’s not enough, we need to address tax loopholes, capital gains, offshore tax havens, etc.

The spirit of her comment- that billionaires and poverty should not coexist in our current society- I believe is clear, and my comment holds in supporting it.

A good question to ask is how many orders of magnitude of what the average person makes do you need to make to be "incentivized" to be productive. Would the current billionaire stop participating in the economy if they suddenly could only make five orders of magnitude more than the average worker instead of six?

They'd have their analysts re-evaluate expected profits, and, if they could increase returns by shifting some processes from their current country to somewhere else, they would.

I want to jump in on this because of the hookworm topic as I'm located near Alabama.

The Huffington Post article on Hookworm cites a homeowner that pays a mortgage for a mobile home on land that has a broken septic system. Unfortunately for the inequality argument, the article cites utility and mortgage costs that are higher than if the homeowner were to move to a different (newer or more permanent building on a different lot.


Rudolph has a $611/mo mortgage payment and $300 electricity costs -- on a trailer on a "campsite" (non appreciating asset, especially when considering the hazmat of broken septic systems).

Perusing Zillow, there are many newer, larger, permanent structures, on land, ranging from 20k-150k (read $150-$600 month mortgages on appreciating property). Alabama also has a 3% downpayment step up grant program for households w/ less than $97k of income.

Is this an affordable option on $1,200 month income (plus social security in 3 years,) maybe not, but it's probably more affordable than fixing a septic system on land she doesn't own and a house falling apart - and indicates rentals, especially between Lowndes Co and Montgomery or Atlanta would be viable, healthier options.

I’m not a millennial but I’m with his kids. Tax the wealthy. Rebalance directly. Any notion of trickledown and secondary effect rebalancing is fraught with complexities and conditionalities. It would also take an entire generation to figure out whether the approach worked or not.

The US has a more progressive taxation scheme than a lot of other countries.[1]


A question for those of you in France (or Europe more generally) - many of the changes being proposed -- universal healthcare, free or low cost education, paid for with higher taxes on the wealthy -- basically already exist in your country.

Yet France has seen the yellow jackets, and there seems to be a feeling of discontent that's spread far and wide throughout Europe. So my question is, why? And what does that bode for the US if we move in that direction?

(BTW, out of curiosity I looked up taxes in France and I didn't realize that it had a real wealth tax, which goes up to 1.5% of all assets: https://en.wikipedia.org/wiki/Taxation_in_France).

France provides healthcare and education. It doesn't guarantee food, shelter, or power. Of course there are relief programs in place if you are without, but there is a substantial difference - as can be seen in any countries welfare programs - between "everyone gets this for free all the time" and "apply and qualify for this limited offer program only if you really need it and we think you do".

The equivalent of the NHS and public education for the later three would be things like widely available public housing with short enrollment periods, maybe even "public" hotels you can stay at. Public food kitchens without needs requirements - just free meals provided by the city if you want them. Free groceries, up to a threshold, per person - something like "food stamps for all". Same with electricity, you could have a "free" amount every month for what the minimum a person should have would be.

Of course when you talk about it all like that you eventually just get to UBI as a means to accomplish all those without the bureaucracy. But as long as France only guarantees a portion of the bottom rung of the hierarchy of needs there will be discontent amongst those who cannot fulfill the rest through the market economy.

The "feeling of discontent" in France goes far beyond the Yellow Vests protests, which are more like a "Tea Party" populist movement pushing for stagnation and short-term complacency. The low-productivity fraction of their labor force is essentially shut out of the labor market due to a combination of high taxes + extremely hostile regulatory environment.

And no, they can't adopt something sensible like UBI or EITC - not without reforming the way their government is run from the ground up. Which is exactly the sort of reform the "average dudes" that are now powering the Yellow Vests protests don't want. France is FUBAR - "God-Emperor" Macron had been trying to start seriously working on fixing the mess, but he is clearly failing just like his many forerunners.

France doesn't tax the rich high enough is the basic problem. Macron also passed big tax cuts for the wealthy that did not stimulate the economy as well. So the working class are feeling the taxes as well as not having enough economic opportunity. Nationalism is also big in Europe as it always has been. People see refugees getting resettlement benefits and that upsets them. It doesn't help that ISIL want to shoot and blow people up as well.


> France doesn't tax the rich high enough is the basic problem

Not even 10 years ago, I read that France introduced aggressive taxation on the rich ("75% supertax"), with disastrous consequences, so they got rid of it.

Concentration of wealth is the price we pay as a society for having a system where we pay people to give us what we want. It's extraordinarily difficult to have an Amazon without a Bezos, or a Microsoft without a Gates, or a Walmart without a Walton.

This isn't to say that we should ignore concentration of wealth, or that we shouldn't ensure that wealth generation produces positive externalities. Rather, we should remain aware of the tradeoffs we're necessarily making when we tamp down on inequality.

> It's extraordinarily difficult to have an Amazon without a Bezos, or a Microsoft without a Gates, or a Walmart without a Walton.

This presupposes that any of these are desirable.

For what it's worth, more affordable consumer goods are way more important to the everyday blue-collar folks who tend to not be the readership of this forum. If you're making six figures, you care a lot less about a thirty cents a pound price difference of ground beef, and can afford to care about the concentration and centralization of the retail industry.

I'm not talking about the desirability of large corporations generally, but about those three particular examples. There are large companies like Costco (though obviously Costco is not targetting blue-collar people as much as say Walmart) that deliver cheaper goods via economies of scale but are organised rather differently from Walmart or Amazon.

How do you propose interfering with Walmart's ability to compete aggressively on price without interfering with Costco's?

That's pretty easy. Require Walmart to give decent employee benefits. Costco already does that, so that wouldn't hurt them.

The world would be an overall much poorer and more brutish place without all of the businesses that have ever drawn feelings of consternation from the public.

Again, I'm not talking about all of the businesses that have ever etc. But there are certainly corporations whose non-existence would have made the world a much richer and brighter place.

These sorts of comments feel to me like they're part of a concerning trend for middle-class and upper-middle-class folks to fail to empathize with the needs of the working-class and below. "The world would be richer and brighter if Walmart never existed" is a value statement on the relative importance of ethical business practices versus being able to buy a pack of ramen noodles for 19 cents versus 40.

And the really dangerous part of this trend is when it gets codified into law. It's most obvious in zoning, where often times the kind of quality concessions that are necessary for building cheap housing that is barely acceptable is made illegal. Zoning that excludes single-room occupancy units, minimum road setbacks, lot width minimums, bedroom size minimums, etc - all things necessary for making things that poor people can afford, but a lack of empathy and awareness of affordability side of these tradeoffs makes a naive upper-middle-class person support grossly classist policies.

I was actually thinking more about Microsoft than Walmart with that statement.

But you're treating this as if I'm saying 'any big corporation which sells foodstuffs and other basic goods is a blight upon society', as if it's an aesthetic argument because I don't like the looks of Walmart.

Walmart is a tax-payer-subsidized megacorporation which pours vast resources into the hands of the Walton family. If we're going to have such a thing, we might as well cut out the middle-man and just have a government-run chain of groceries. It's somewhat ridiculous that my money (via taxes) effectively ends up in the pockets of billionaires even if I never shop at their establishments. (Same goes for Microsoft.)

So my statements have nothing to do with classist policies, that Walmart offends my aesthetic sensibilities and so therefore should be removed. I'm saying it drains resources off in the wrong ways. And it's not just about people buying things at Walmart, it's also about people working at Walmart.

So you're going off on a tangent about something I'm not at all talking about.

If you are contending that Walmart having never existed would be a net benefit for humanity I think you would have a very hard time proving that. I am not defending their business practices, merely pointing out that it would be extremely hard to fully account for.

> If you are contending that Walmart having never existed would be a net benefit for humanity I think you would have a very hard time proving that.

I don't really think I have to. It seems like a self-illustrating proof. Walmart drives small businesses out of business by artificially lowering prices for short amounts of time until they've driven competitors out of business. They play dirty tricks employing people at weekly hours that don't require benefits, and so tax-payers end up subsidizing Walmart by being on the hook for the health benefits of many of Walmart's employees. It's welfare for billionaires.

Why does it seem like every billionaire is exploiting our legal system as much as they're innovating?

Bezos exploiting sales tax and workers, oil companies and the Kochs exploiting environmental externalities, Oracles, Microsofts, and Googles exploiting patents to prevent competition. All of these companies consolidating as much as possible to get as close to a monopolistic position as possible, to charge as much 'rent' as they can.

All these self made billionaires are using the law, and imperfect or lacking regulation to fuck over millions of people.

Sure they're providing a service along with it, but the vast sums of wealth are possible because they poison the earth and steal and fuck over the rest of us while they do it.

It is the plight of rational actors to optimize their position. The government should be focused on making sure that those companies are properly paying for public resources that they use. If they are not, the laws should be changed to make sure that they are. However, the more complicated laws and government get, the easier it is to find loopholes. Anyways, my point is that the billionaires are doing just as any of us do--they just have more tools at their disposal because of the scale of large companies and the complication of the world.

It's a curse inherent to capitalism. Any incentive to make what people need also works as an incentive to make people need what you make.

Seems like we have a military and postal system that are nigh-perfect counterexamples to your point.

>price we pay as a society for having a system where we pay people to give us what we want.

This notion of convincing someone to do something for you (even for pay), while it seems very natural and common sense on the surface, actually entails a whole social arrangement which must be penetrated to understand it. The seemingly naive question "why do people work for others?" may have been more obvious in the past - when there were no such things as government safety nets - but now the question has changed and become a lot more interesting... as has the question of why people go above and beyond the call of duty for sometimes no perceptible reward.

It turns out this topic is very much related to social psychology and the nature of desire, which is a favourite of philosophers. Frederic Lordon has a great book, Willing Slaves of Capial: Spinoza and Marx on Desire in which he tracks the recent development of capitalism through its stages. Here's a word from the blurb:

>To complement Marx's partial answers, especially in the face of the disconcerting spectacle of the engaged, enthusiastic employee, Lordon brings to bear a "Spinozist anthropology" that reveals the fundamental role of affects and passions in the employment relationship, reconceptualizing capitalist exploitation as the capture and remoulding of desire.

Yet it is the Billionaires that keep the inequality in place, they keep the minimum wage static, raise prices, destroy quality of life for the majority by removing social funding.

Publicly funded projects work, CERN, NASA, the Internet, Telco Technology, all funded by taxpayers. It's proven we don't need these Billionaires. Their talent is welcome but not worth the lives of everyone else. There is plenty of great individuals that are not as greedy as your clients.

> Those entrepreneurs, like Rockefeller, Carnegie, Morgan, Bezos, Page, Zuckerberg, build very powerful monopolies and amass billions.

And what do they (or their descendants) do now? It is also worth noting that the Federal Reserve (the biggest scam of all) which keeps printing money out of thin air at will was the idea of a group that included Morgan (or Rockefeller).

The author doesn't back up anything, quotes no theory on either side, no history or economic data. It contains killer anecdotes and gut feelings though - a ratio of about 100%-0% between navel gazing and chin scratching VS reading Marxist theory where people have, you know, talked about the thing you're talking about for over a century. It's particularly stunning that an essay on inequality does not mention the word "profit".

My favorite part is the killer anecdote that seals the deal at the end, which is basically the equivalent of "You dislike Wall St but you own an iPhone? Interesting". It may as well have been pulled from a boomer Facebook meme.

I think that being late to a rally against charter schools because you were busy trying to get your kid into a charter school is quite a bit more specific and powerful form of hypocrisy than the above meme.

It’s strong evidence to me of a deep hypocrisy in a way that deciding you’d prefer an iPhone over Android is not.

No it's collective action vs individual self interest. Or actual politics versus consumerism. Not the same thing at all and should not be confused. If you think a charter or private school is the best for your kid right now and for you then that's one thing. And what is best for other families and teachers in your community may be another. You can support them politically.

Also who gives a shit about the hypocrisy of protest attendees anyway? It has no bearing on the what is right.

> If you think a charter or private school is the best for your kid right now and for you then that's one thing.

If you think that, act on that, and simultaneously seek to deny that to others, I think you’re a hypocrite and adjust the coefficient of my caring about your opinion on the topic to zero or negative.

Deal, I'll consider your coefficient adjusted then.

But for my benefit, can I just confirm my suspicion that you sincerely don't understand the difference between politics & personal marketplace decisions? Because if so that's some VERY strong ideology you've got going on.

I understand the difference, but if you seek to get some good privately and prevent others from having access to that good by policy, I think that’s a dick move at a minimum.

Same issue as the uproar over a US politician going to Canada for an elective medical procedure after working against changes to the US system to make it more like the Canadian system.

> I think that being late to a rally against charter schools because you were busy trying to get your kid into a charter school is quite a bit more specific and powerful form of hypocrisy than the above meme.

I don't think it's hypocrisy at all; thinking that it is essential for your child under the present time policy regime because that regime harms all public school students, but particularly those who remain in traditional schools, in order to reward charter operators is not even slightly inconsistent with thinking the system should be reformed to eliminate that problem.

It's not hypocrisy any more than it is to be late for a protest against marijuana being criminalized because you are trying to negotiate a deal to get probation instead of jail time for marijuana possession.

In your MJ example, IMO it’s not hypocrisy because both of your actions are aligned. You are protesting MJ being criminalized (arguing for others’ sentences to be reduced/eliminated) while also arguing for your own sentence to be less severe.

If you view the system of public-subsidized charter schools as harming all students, but moreso those that remain in traditional public schools, the two situations are precisely analogous; you object to the policy that imposes the harm on a broad class while attempting to mitigate the harm you (or your dependent) experience given the existing policy.

Ok. While I don’t see them as precisely analogous, I now agree that they’re more similar than I first thought, provided you believe that all students are harmed by the presence of charter schools.

Thank you for taking the time to explain it again so it landed.

It seems to me that you expect a lot from a short opinion piece written on a personal site.

I'm trying to find an essay I remember reading in the past 5 years titled something like "Inequality in Equalville" but my googling isn't finding it. Does anyone remember what it was called?

So many people think that capitalism and socialism are the only economic systems -- two ends of a spectrum, and society needs to decide where on that spectrum it falls.

The English writer G.K. Chesterton, who popularized the idea of distributist economics, calls distributism a "third way" that doesn't fall on the spectrum, but sits outside the line entirely.

Chesterton pointed out that both capitalism and socialism entail consolidation of ownership of productive property. Under capitalism, you end up with Big Business, and under socialism you end up with Big Government.

Chesterton advocated for distributism, where the ideal is that the ownership of productive property should be as widely distributed as possible. Note that distributism does not advocate for a redistribution of wealth, but rather economic policies that make widespread ownership possible, such as those that help address some of the disadvantages that small businesses and worker- and consumer-owned cooperatives face when it comes to competing against megacorps.

>Chesterton pointed out that both capitalism and socialism entail consolidation of ownership of productive property. Under capitalism, you end up with Big Business, and under socialism you end up with Big Government.

Is Chesterton aware that (going by what you describe here) what he wants is exactly what both Marx (in Critique of the Gotha Program) and the anarcho-Communist socialists wanted all along? Furthermore, post-Marxist socialisms like John Roemer's argue for a redistribution of productive resources. As to whether this solves what researchers see as exploitation inherent in today's system remains a question.

Distributism also has an interesting model for devolution of power structures generally (not, of course, devolving everything in the same way or to the same extent, but rather according to the relevant properties of the thing/institution).

This seems more an addendum to socialism than an opposition to it. Specifically it calls for distributed ownership of the means of production (which most socialists advocate, as "state socialism" isn't really desirable).

Also, it talks of forming workers' guilds. See https://en.wikipedia.org/wiki/Guild_socialism.

It seems to me the ideas are actually quite aligned in their ultimate goals, however it looks on the surface to be different to socialism because socialism tends to be synonymous with "state socialism" in people's minds.

It's more like anarcho-syndicalism than statist socialism though.

Creating the middle class was a deliberate policy choice [1]. Hard fought and narrowly won.

That the rich get richer is just math. It's not a value statement.

Without active wealth redistribution, accelerating inequity is inevitable.


I personally don't care how we do it. UBI, cashectomies of windfall profits, restoring progressive taxation to subsidize the safety net. Whatever.

I am tired, however, of the bickering over the details. As though the primary issue at hand is tax brackets and capital gains. These food fights just muddy the core conundrum.

The trick is balancing capitalism with democracy, lifting the floor without lowering the ceiling.


[1] Kevin Phillips, Reagan's conservative economist, detailed our history of purposefully creating a middle class and the upper class' efforts to thwart such efforts:

Wealth and Democracy: A Political History of the American Rich Paperback [2003] https://www.amazon.com/Wealth-Democracy-Political-History-Am...

> Without active wealth redistribution, accelerating inequity is inevitable.

Having watched Mark Blyth, he has a theory that the capitalistic system can operate in one of two modes (https://vimeo.com/247596824):

A) Mode that favors the workers (US before 1970)

B) Mode that favors the capitalists (US after Reagan & Thatcher)

When capitalism is in Mode A), you get horrible level of inflation, but rising wages and profits for the workers (and since one man's wage is another man's expense the prices rise too). It creates great environment for taking credits, since inflation devours any profit bank can make on a credit. This hurts the returns of capitalist and investors, who stage a "market-friendly revolution" that will change system to B).

When capitalism is in Mode B) you get stagnating wages, and rising profits for capitalists. On the other hand, this causes inequality. Credits are available, but generally a bad idea, since the wages are decreasing. Usually in this environment the Supply Chain is Globalized making it really hard for Labor to move, but making it super easy for Capital to transfer (as Mark says "Good luck striking, if I can move my production to China")

1. Income redistribution via social welfare programs has massively increased since 1970. The actual statistics contradict the theses of the equality sophists.

2. The unions that pushed wages up 1950-1970 also eroded America's manufacturing competitiveness and efficiency, which contributed to the outsourcing of manufacturing. The reason union membership numbers in the private sector declined was because the industries that employed unions contracted. And that was largely the doing of unions and the very generous collective bargaining agreements they got for themselves. IOW the gains they brought about were not sustainable. In contrast, the wage gains attained in the pre-union, free market era of the late 19th century were sustainable. They accompanied an increase in the competitiveness of American manufacturing, instead of coming at its expense.

"The trick is balancing capitalism with democracy, lifting the floor without lowering the ceiling."

Plenty of people would be fine with lowering the ceiling when the ceiling is currently "having a higher net worth than some nations". We don't need Bezos to be as rich as he is in order to motivate people to try hard. We don't need one unelected man wielding that level of power individually.

I stopped reading after this:

>I also understand that government is bloated and there are many places where we could cut spending to fund these new innovative programs that could help counter the immoral wealth imbalance we have in our country.

His understanding is wrong. To the extent that there's fat you can cut from the U.S. federal budget to fund other programs it's in healthcare or defense. "Waste, fraud, and abuse" are the equivalent of the Underpants Gnomes' "???". It's a placeholder for a real argument.

I find myself wanting more specifics from this short essay. A lot is said by the author who has a vested interest in maintaining the status quo with vague references to UBI and other changes but no concrete policies that would actually implement real change in society.

As is, the Silicon Valley establishment is certainly not invested in paying more tax, thank you very much. While I don't believe billionaires are inherently immoral, I would like to see sample implementations of UBI rather than yet more posts equivocating about it.

From a fiscal perspective a higher tax rate would not make much of a dent in the the US deficit; a piece in the WSJ addressed much of it: https://www.wsj.com/articles/the-crippling-cost-of-70-tax-ra...


>I also understand that government is bloated and there are many places where we could cut spending

The problem with this critique (the right-wing rallying cry since at least Reagan) is that no one ever wants to cut any particular program (which Fred acknowledges later in his charter school story). The right in the US, for example, bemoans government spending every year, then doesn't cut any spending, raises military spending, and then cuts taxes. Again, Fred acknowledges this, but doesn't take the next step of doing the unpopular, hard work of deciding where we can size down. I'd like to hear exactly what spending Fred thinks we should cut, otherwise this position is pretty empty.

> If we were to force it to go through the same technological revolution that the private sector is going through, we would see massive efficiencies

Again, this is what the Republican party has been saying for 30 years, but has been unable to deliver. We can say we want "more efficient government" until the cows come home, but there is something in the system that is preventing us from doing so. What is that thing? Let's talk about that. Otherwise, this post is just a rehash of Republican talking points and slogans, without any real proposals.

A lot of people wants to cut a lot of spending!!

It is politically impossible because the spending has very strong political power behind it. That's why it exists in the first place.

A lot of people say they want to cut a lot of spending, but everyone wants to cut different things. Ask half a dozen people what they want to cut and they’ll say things like everything but military spending, or everything but Medicare or Medicaid or SS, and after you tally up the un-cuttables and cut everything else, you’ve still got a budget that’s 95% of the current one.

I’m not anti-military by any means, but I’d be more than happy to cut the JSF project (and replace it with something else, so not 100% net savings).

The problem as I see it is the same outcome but different mechanisms as you describe. Those who benefit from a project are very willing to spend time, energy, thought, and money to preserve the status quo, while those who are opposed have a very diffuse opposition to most of the specific programs.

The JSF project is essentially complete. You're advocating dumping billions of dollars of R&D to start over and build something else, when all that's left now is conventional aircraft building -- and oh by the way that aircraft is now being built by our allies (who helped to fund the R&D) as well.

OAC appeals to the instinct of shared sacrifice.

"Let's all sacrifice some of our liberty to ensure no one is left behind"

It's a useful instinct in small villages of 180 closely related people. It does not work for countries constituting 300 million people with very little linking them together.

First pragmatically: social democracy has tremendous adverse effects on economic growth. The poor are better off with less redistribution and a higher rate of recurring economic growth. This can be demonstrated mathematically, no matter what our gut instinct may say.

Second, as a matter of principle, we do not have a moral right to force others into this shared sacrifice pact, simply on the basis of shared nationality. Billionaire or not.

People may claim billionaires amidst poverty is immoral. I think it's far more immoral to violate the principle of voluntarism and force people to sacrifice alongside us.

Contrary to popular belief I'm not a billionaire, just a humble centimillionaire.

Government in the US is a captive of corporations and money politics. Many laws are written by lobbying groups working for large corporations. Do you see these laws improving the quality of government?

In an ideal world, school kids would be taught how power law networks work - how they result from preferential attachment. Then they'd be able to connect the pieces and see that popularity and capitalism are the same and produce the same inequalities. Inequality is not about money.

Agreed. We need more tools to study complexity, and the study of networks is one such tool.

Exactly. This is what foster inequality among individuals doesn't go away with a different economic system.

He seemingly believes that the government is a barbarous relic in need of computational analytics and technology to make it work fairly. What this has to do with capitalism was missed by me. Perhaps we can all agree that if we the people were granted a 'capitalistic infrastructure' that allowed anyone who wanted to work could work and have the most important factors in Maslow's Hierarchy of Needs scale fulfilled; (food, water, shelter, electricity, security, education) we would have less envy, anger, violence towards one another and way less crime

Maslow's Hierarchy of Needs scale: https://www.simplypsychology.org/maslow.html

I agree with the author but how exactly do we fund a basic income type system for the masses without raising taxes on someone or some entity?

Why would raising taxes be a bad thing? The highest US tax bracket in 2019 is 37% for income over $500,000. I don't see why a higher tax bracket, along the lines of WWI or WWII would be untenable. Could you elucidate why you are so averse to raising taxes?

I find it harder to accept that every person making income is subject to a 10% fed. income tax, in a country where the basics of survival are not even provided. Why shouldn't income over a million a year be taxed at a much higher rate?

I can tell you why I'm averse to raising taxes.

Because the utlitity of government expenditures is really low: for each successful program it has failed programs that last decades and sometimes even have negative returns, let alone justify what private investment would have gotten.

Because the person that advocates the most for the tax, the politician, gets to spend it, and has nothing to lose by doing so and plenty to win.

Because the mechanism itself allows to get money from anything and put it into anything, and once in place its exceedingly difficult to take out, even if it has short term positive results.

Because even today, the government as it is wastes money on a plethora of projects but instead of cleaning itself up, it demands more resources.

Because the consolidated expenditures of the entire government is 23k/year/capita which means that if you just slashed government in half, you could give a thousand dollars to each american every month without raising a single tax.

The top 3 richest counties in America are actually surrounding Washington D.C. Money is extracted from everywhere else in the country via taxes and paid to people in that area.

That's not how taxation works... The rich counties around DC are for quite different reasons.

If you mean that people that earn less pay less tax--what I am trying to say is that money is being taken via taxation across the entire country. However, that money is being spent by the Federal government in high concentrations in certain places. The DC area is one such place. Any military base or Federal government office is such a place. Money is being spent there that was earned elsewhere. Why do you think senators fight so hard to keep military bases in their states? It is because a military base is a firehose of Federal money going into their state from elsewhere.

My point is that the rich areas around DC are not rich because of tax money.

Military bases are a boost to the economy in some places. They're a drain in others.

I'm not averse to raising taxes, i was commenting on the authors aversion to raising taxes, it was a question directed at him or anyone who might give a good answer to "how can we achieve a social safety net for the masses without taxing corps or people?"

> The highest US tax bracket in 2019 is 37% for income over $500,00

+ 13% state income tax = 50% (california)

Add in 15% medicare and social security on earned income.

Then add in in 10% sales taxes.

Carving out the government.

The US government today spends 23k per person/year. https://www.usgovernmentspending.com/per_capita

I think you do some of that and also raise taxes across the board. MFJ making $75K/yr AGI might get $12K in UBI and an increase of $6K in their taxes. MFJ making $45K might get the full $12K and no tax increase.

I don’t know what the right levels are, but it can’t/shouldn’t be “everyone gets an extra $12K of spending money thanks exclusively to the ‘tippy top’ earners.”

That figure mostly shows how little wiggle room to create a UBI exists. I have a feeling that eliminating all funding for education and healthcare to create a new $12k pa handout for people not currently entitled to welfare or social security might not be a universally popular move...

I think it shows plenty of wiggle room. You think all the dollars that go to health spending are well spent? 5k year per capita means that the government spends 400U$S per person for all the health expenditures it has, on top of the 400--700~ a month american spend for PPO plans for themselves without getting government health assistance.

Just pensions and healthcare are almost half the expenditures, 2 things absolutely in the realm of inefficiency.

I don't think the US healthcare budget can't be improved. I just don't think the way to improve it is to eliminate it altogether to pay for a fraction of the US population to receive $12k handouts instead.

And the pensions budget is mostly spent on disbursing cash to people with the right social security number - precisely the thing you're advocating doing more of....

Basic income is not "for the masses", it's mostly for the destitute (although even poor people with more earned-income would be getting some BI). "The masses" would largely be funding it via the taxes that now go to other social assistance programs.

There's nothing new about rich people wanting to kill off government. Fortunately it hasn't entirely worked yet, and our current safety net (as paltry as it may be) is still somewhat protecting the vulnerable margins of our society from being mercilessly swept up in the maw of modern scorched earth capitalism. This new generation of politicians like AOC will be our savior from the last three decades of self-serving grifters picking away at what was once a great nation with a sense of civic duty.

You completely ignore the scorched earth left by war. How is that exactly protecting the vulnerable? It would not be possible without massive entities like the State.

It’s true that the current income tax has shortcomings due to the mobility of capital owners. I think it would promote competition to focus more on wealth taxes on immobile assets (on e.g. land, patents, spectrum, and ownership of networks) as an alternative to some income taxation. See e.g. Glen Weyl’s book Radical Markets on this topic (https://www.amazon.com/Radical-Markets-Uprooting-Capitalism-... https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2818494)

The fact that there are billionaires in the world is unfair. Most of them didn't create any value for society. They just captured value created by others. They were just at the right place and at the right time. Wealth is so concentrated today that it has turned capitalism into a zero-sum lottery.

It's a lottery not only in the sense that there are very few winners and that the payouts are huge but also in the sense that the winners are chosen randomly. Investors invest randomly because they have no idea what's going to work; that's why less than 10% of all companies succeed. There is no skill involved in distributing capital efficiently; it's either completely random or the result of monopolistic wealth-concentration.

The discussion is always around increasing or decreasing the size and expense of the government. So I like that the author is advocating increasing efficiency instead. Doing more with the same amount of spending is a good goal. And I think there are a lot of places the government could be made more efficient.

But, as a staunch capitalist myself, I believe we do need to start raising taxes on the rich. I think the 70% marginal rate on people making 10M a year is a good start, but ultimately more a token gesture than anything meaningful. It won't raise enough money, since there aren't enough of those people.

We need to start counting capital gains as income. No more long term 15% rate. If your investments are kicking out money that you live on, that should be taxed at the same marginal rates as my wages!

The problem of course is that the true rich have influence over the politicians. So they point the politicians at the upper middle class, and say "hey, raise the marginal rates on these people instead!" Pretty soon the narrative is "oh, you make more than 100k a year, that's immoral!" And the wealth divide would just get bigger and bigger.

TLDR: We need to tax wealth in some capacity. There are many many approaches to this, but we need to find a way to actually tax the rich, not just fleece the upper middle class.

If you tax capital gains then no one will invest unless things are 100% guaranteed. Your winnings need to cover your losses.

Capital gains aren't wages

Some other commenters have pointed out that The Hill selectively quoted Ocasio-Cortez in the tweet mentioned in the article, but I want to engage the selective quote ("Economic system that allows billionaires is 'immoral'") on its own, and argue that it stands on its own. I think that we've lost some perspective on how obscenely much money a billion dollars really is, and it's worth thinking about the implications of this gigantic number.

Money is something we give people in exchange for labor. Is it possible to imagine any amount of labor that would be fairly compensated with a billion dollars? If a restaurant worker makes $25,000 in a year, what kind of work could one person possibly do to deserve 40,000 years' worth of restaurant wages? For that matter, we can even compare those numbers to the earnings of a software developer. If you make a salary of $150,000, it would take you 166 lifetimes (6,666 years / 40 working years in a lifetime) to make a billion dollars.

I know that capitalism offers ample justification for why someone might accumulate that much money (risk! market efficiencies!) but none of those add up to a moral case for me.

Without the ability for a single man to acquire that much capital we wouldn't have Tesla or SpaceX.

Labor doesn't always have value. If I spend 8 hours digging a hole nobody wants there is no value in it despite strenuous effort involved.

But if someone with the talent, ability, resources and balls to earn a billion and then risk it on a new company to cure cancer, or solve similarly worldwide problems does so they deserve it.

I'd argue that musk and bill Gates are far more effective with their money to improve humanity as a whole than if 90% of it were distributed to the destitute. SpaceX has also proven to be far more flexible, efficient, and agile than NASA in recent memory.


The adage is perfectly reasonable when you recognize that influence in government comes not from popularity but from money. I always refer back to the Cambridge study that correlated money to legislation and that citizens will has no impact on what becomes law[1].

So yes, there are lambs being served up for dinner by wolves, but its not that there are more wolves than lambs - the lambs simply don't get to have a say.

THAT is why inequality is so detrimental to society. When money buys influence, and a few dozen men can wield as much as half of everyone else, only their desires matter. Everyone else is functionally unrepresented.

[1] https://www.cambridge.org/core/journals/perspectives-on-poli...

Are you implying that Fred Wilson and his ilk are lambs?

Give that domain over to the VideoLAN project already.

So, a few things. First, I don’t feel like the author really addresses the problems people have with inequality. In my mind, the real issue is that the floor is too low, which is related to inequality. If one person makes a billion dollars a year and another person can’t make $1000 a year, they’re very unequal. If we could adjust the system so the first person still makes a billion a year but the second person makes $100k/yr, we’ve reduced inequality.

But we have huge structural problems in the US that I think could be mitigated by stronger social support programs. I’m a “libertarian socialist” which is a real thing, but it means I don’t really advocate that we use the government to form social programs, but I do strongly advocate that we form social programs through voluntary means. Unfortunately the left ignores the ways we could help each other without the government and the right ignores the fact that some people actually want to pay to help others. I feel as though the right could get a lot of what they want by working with the left to form strong voluntary social support programs that compare favorably to government programs.

However, I’m not against using the government to help people. Martin Luther King Jr was a brilliant man who understood the needs of his people, and he advocated both for community power and for government programs.

We have real problems in the US that leave millions struggling to feed themselves. Millions our children grow up with poor schooling, which can lead bright people down a dark path. Soon we throw them in prison and forget about them.

My issue with billionaires is not that we have billionaires, but that we have billionaires and starving people. We have homeless people who die every winter because it gets too cold. We have enough money to care for them! The wealth is there. But we’ve failed to organize ourselves well enough to use it effectively.

I don’t mind billionaires, but I do mind that we have billionaires and destitute people. We have enough wealth to do better. It is not immoral in itself to have billionaires, but I do think a system that produces both billionaires and poverty is wrong. The left wants a solution and all they can think of is taxes. I really wish the right would see that helping build community power would reduce the need for government support.

Also someone please break the military industrial complex.

This fucking guy leads with an anecdote about a family ski trip?

My heart goes out to him and the other poor maligned ultra rich.

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