I think Americans workers are willing to tolerate conditions of exorbitant wealth disparity for at least two reasons.
First, because Americans believe someday that they will be wealthy and they do not want to eliminate their chance to join the club[a]. In my opinion, this is the most satisfying explanation. Workers do not want to remove that ladder to the upper class because in doing so, they place a hard cap on their expected outcomes.
Second, American political culture is derivative of a property-rights focused political philosophy. One of the biggest influences on the Bill of Rights and it's explicit protection of property rights was John Locke's Two Treatises of Government. John Locke argues that a defining purpose of government is in the protection of property (life, liberty and property). Americans therefore, view wealth as at least in some part meritocratic and rich, having earned their extra property, are wary of retracting that property. The importance of protecting what's "theirs" is politically, socially and legally baked-in to society.
If Americans' belief in their own prosperity suffer and/or the relative importance of property diminishes in light of other rights (health care, equality, etc.), I think then we might begin to see changes for high-wealth compensation. But, I would argue as long as each of these remain strong, we aren't likely to see any changes.
I think Americans workers are willing to tolerate conditions of exorbitant wealth disparity for at least two reasons.
I think most likely most American workers feel pretty helpless, like pawns in a game they can't exercise control over. They likely do not think of themselves as tolerating wealth disparity. They most likely think of themselves as enduring something they simply can't fix.
Health care is crazy expensive in the US. If you effectively addressed that, an issue which can leave The Have Nots bankrupt for needing medical care for a serious condition, you would go a long ways towards redressing income inequality.
Last I checked, the US was on a very short list of countries without maternity leave and the only developed/wealthy country without it and also on a short list of developed countries without universal health coverage.
It's not about reducing expenses. It's about trying to establish a social safety net that most countries that see themselves as more civilized than the US already have and it's part of what reduces inequality between The Haves and Have Nots in most places.
Look, I'm only reporting what Pew Research purports to be on Amercans' minds. If you think Pew is wrong or that Americans have the wrong view, that's fine. I'm not arguing that.
The US has maternity/paternity leave via the FMLA, but its not very long (12 weeks) and its not paid. Small businesses (<50 employees) are also exempt.
Unpaid leave isn't what anyone means here. It's not helpful to tell a wage worker to take FMLA for three months and thereby lose a quarter of your yearly income.
Americans only care about moving up that ladder themselves and keeping others below them.
Here’s examples..
1. Universal healthcare was proposed as early as 1912, but overwhelmingly white Americans at the time didn’t want to cover minorities. This was backed by insurers and the work of Frederick Hoffman, the head of American Statistical Association at the time. Nothing has changed on the universal healthcare issue since that time.
3. Americans obviously don’t care about gun violence. Since the sunsetting of the Federal Assault Weapons Bans, mass shootings (overwhelmingly committed by AR15) have skyrocketed with no end in sight.
4. 58% of Republicans believe the US country should prioritize expanding exploration and production of oil, coal and natural gas. As an example, China outspent the US almost to 5:1 in transitioning to low carbon energy production in 2023.
5. Americans don’t care about income inequality. Improving public school education is the best way to improve outcomes for poor people but state legislatures have been defunding public schools since desegregation.
Let's say this is true. Logically then, one could make the point that people who are loudly proclaiming that the American worker is suffering because of income inequality (just look through this thread) are clearly out of touch with the average American worker and maybe even have a saviour complex with a touch self-righteousness.
Americans realize that any tool that can be used to remove wealth from the rich can be used wealth from themselves as well.
France recently had what, like a hundred days of continual protests over poor economic conditions? But yes, give politicians more power to fight the fat cats. That'll work!
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EDIT: Check my profile, I founded a healthcare billing company. You know who supported the Affordable Care Act the most? Insurance companies. [1]
This! Every time I hear about a new tax for the rich, somehow the middle class end up actually paying it.
The rich have every tool in their arsenal to limit their tax liability. When you can afford the best accountants, lawyers, and politicians that money can buy, you can ensure that you will never have to pay your fair share. Oh, and even if a new law somehow does make their costs go up, they'll just pass it on to the middle class by raising the prices on whatever they sell to us to make money.
"The poor often say, “‘Why don’t the rich pay for it?’ or ‘The rich should pay more in taxes and give it to the poor.’” However, the real rich never pay taxes. The people who pay taxes are the educated, middle class."
Reduce government waste. You could leave entitlement programs completely intact and still cut billions of dollars in spending without anyone but heavy hitting political donors noticing. Then simplify the tax code with straight forward graduated income tax brackets without exceptions or deductions.
I looked around for lists of waste, fraud, and abuse and found this [0], and while I'm loathe to use The Heritage Foundation as a source let's just stipulate we could save something like $300B a year if we deleted all this stuff. That isn't even 5% of the budget, like you're not gonna tackle climate change with that kind of investment, especially if you're scouring all the new green policies to ensure they're minimally wasteful (also imagine the meta-bureaucracy needed for this).
I love the idea of simplifying the tax code, but I think if you're arguing it's useless to tax the rich I think you have to think that would be useless too, right? We'd need to actually have the rich pay their rate, but you're saying that doesn't work.
The problem is that your loophole is my socially-significant deduction. Why wouldn’t we want to allow deductions for insulation and energy efficiency, or electric cars?
Every deduction exists because someone wants it to exist. And “eliminate all deductions” lasts until someone goes “but what about the child credit” or any other issue.
This will continue as long as Americans continue to be averse to the idea of actual cash transfers and continue to use the tax code as a backdoor system for remitting subsidies and credits.
I understood your argument to be that the rich tend to find ways to pass on their taxes, which I might even agree with--maybe, so I was thinking that if taxes don't do it then what would. I agree with my sibling though: the tax code is where we've subsidized people for generations now because of our discomfort with giving benefits to Black Americans. I think it would be hard to convert all that into equivalent benefit programs, and I think that's why people on the right advocate so much for it, because the likely end result is that many of those programs are cut, and the rich still only pay capital gains.
It’s simpler than that - there is no economic system that both rewards and incentivizes productivity that wouldn’t result in stark wealth or income equality.
Consider a simple game of flipping coins would result in similar inequality despite it not being a game of skill at all.
Inequality is inevitable. Waste of time and energy discussing that. Rather we should discuss actual quality of life grievances (and to be fair these may be related to the inequalities).
There's also the weird and uncomfortable truth that substantial wealth accumulated all in one place is what keeps a significant amount of private business, arts, and craftsmen in business.
Who really needs a beautifully-curved hand-carved wood staircase? Nobody, but rich guys want them occasionally, so that's keeping a whole company and a couple of master craftsmen in business.
You could argue that this is just a misallocation of resources and that without said rich guys the same economic productivity would move elsewhere instead. But I'm not convinced that's equivalent, it's "mythical man-month" reasoning. $1 in 100 people's pockets is not the same as $100 in one pocket.
I'm not at all arguing that the money is deserved or that we shouldn't consider wealth redistribution policy. As you said, it comes back down to quality of life. When we talk about wealth inequality, it's important to realize that we're not trying to prevent people from making money and spending it on things other than groceries and gas, we're trying to prevent people from being materially poor, and mess with everything else as little as possible.
It's sort of true. Give money to the masses, and there will be more demand for mass-produced products. When money is concentrated in the hands of a few elite, they'll commission some exceptional things.
But on the other hand, the same masterwork staircases could be put towards public buildings, like grand libraries, museums, and train stations. Then everyone can enjoy those splendid things and the master craftsmen still stay in business, without their works needing to be confined to the mansions of the wealthy.
But these days we tend to disapprove of public works being anything beyond the bare minimum of utilitarian functionality. Anything else is seen as a wasteful extravagance.
I often hear your first point repeated, but have never met a poor person that thought they were going to be a millionaire.
However, I think it is a biased caricature of a real phenomenon.
I think Most Americans don't want the government to put limitations on how successful they can be and put barriers in their way if they start being coming successful.
This is essentially the same idea with different framing
Part of the issue is that regulation tends to hurt small businesses more than big ones. So I think resistance to adding new rules is somewhat justified by the experience that adding new rules makes it primarily harder to run small business. Whether this is a matter of naivety in policymaking or anticompetitive regulatory capture is another issue.
Even the shareholders of some of these firms think the executives are robbing them with the compensation they've set (see ongoing Tesla lawsuits, for example). But, they can't come up with a clear rule for what "appropriate" pay is.
I suspect we'll hit a point where the pay is so excessive that it's worth buying companies purely to cut the pay of management, as it'll be the easiest way to improve profitability.
These stats are so meaningless. American big tech workers make literally tens to hundreds of thousands of times more than poor Africans.
Ok, what are we going to do about it? Of course, someone will respond moving the goal posts about how it’s different.
Turns out when you’re the one making too much money it doesn’t matter or count, which is, funny enough, the same thing these health care CEOs would say.
Unlike many hypocrites I have absolutely no problem making thousands more than the global poor and the global rich making more than me either. It is what it is. I can make hundreds of thousands more while still hoping and contributing to raising the floor in quality of life. Not impose meaningless arbitrary income limits.
People think this line of thinking is to shut down discussion, but there’s no discussion to be had to begin with. Shall we make everyone have the same wage? No? What’s the actual proposal here? None.
>I can make hundreds of thousands more while still hoping and contributing to raising the floor in quality of life.
I used to believe this too. Sadly the statistics suggest this is no longer happening and millennials as a generation are the first to be worse off than their parents, with rising income inequality being a driving factor. Robert reichs class is available for free on YouTube, interesting stats to follow to help entertain other perspectives.
Robert Reich is a far-left hack who claimed that "a libertarian vision of an uncontrolled internet [is] the dream of every dictator, strongman and demagogue".
Sadly this is looking more and more like the rich countries becoming more like poor countries in terms of income distribution within country than the poor countries looking more like the rich countries, though likely some kind of meeting in the middle ( still a bad outcome if you are interested in rising standards of living for poor globally)
This is not really true. China has seen a dramatic rise in wealth spread over much of the population with the rest of SE Asia seeing a smaller but dramatic per capital growth over the last 3 decades. India is also seeing huge improvements. Here is a good study to look at[1].
Do you have a source for this? Thomas Piketty's Capital in the 21st century goes into wealth inequality in great depth, and would suggest that intra-country wealth inequality is dramatically increasing in the west, but he doesn't have sources on inter-country wealth distributions. I would be interested to know more.
In figure 2.3, it shows that global inequality hasn't been lower since the 1870s, back when virtually all but the rich would be living in poverty by the standards of today.
check out your world in data. For better or worse the income equality thing is outweighed by the gains in China and India but most of the world seems to be improving on that front.
There are still countries getting worse though sadly
> check out your world in data. For better or worse the income equality thing is outweighed by the gains in China and India but most of the world seems to be improving on that front.
>There are still countries getting worse though sadly
It would be far more constructive to give an actual link to proof than some massive site.
No offense, but that's like me saying, "You want proof that climate change is real? Check the internet," that's not proof, just some nebulous hand-waving. No one would or should believe that.
Their source data for the slight decline [1] in global inequality (which is only hypothetical) is the Worldbank [2], a source that has been heavily criticized for data-rigging [3-5].
The Worldbank also tries to present itself as helping to reduce inequality [6], so they have a bias for showing results.
I am not saying you are wrong or right, but let us keep the conversation quality on this website strong.
The argument you appear to being attempting to support is:
> Global inequality is actually decreasing (potentially at the expense of Americans).
The link you have [1] states that "While the steep rise of inequality in the United States is well-known, long-run data on the incomes of the richest shows countries have followed a variety of trajectories."
Also, "high and rising inequality is not an inevitability; it’s something that individual countries can influence".
This does not say anything about a global trend. This support nothing except that counties can influence inequality levels.
> Unlike many hypocrites I have absolutely no problem making thousands more than the global poor and the global rich making more than me either. It is what it is.
Good for you. I believe that's a privilege one has to be able to throw hands and say "it really is what it is". That's totally alright if one is aware that it's a privilege. I assume no malice over your comment, but to even discourage discussion on wealth inequality is awful.
Right, it's not alright specifically because they're not only saying "I'm financially comfortable and I don't care if other people aren't", they're saying "you shouldn't care either and we should all stop talking about it, aren't I mature?" Seems antisocial to me.
Wealth inequality is not an issue. Repeat after me: it’s not an issue.
There are, however actual quality of life issues to be resolved and discussed. Trying to take things from people to make things right has never worked, ever. Including the infamous French Revolution.
You’re comparing workers in two vastly different markets to workers in the same market. In the US, wages for one class of employee have exploded as wages for the rest have stagnated.
Market is a term that can be used to describe “an area or arena in which commercial dealings are conducted”
You can absolutely refer to the US economic market or African market and the participants there in. If not I would love a reference to explain otherwise.
Of course different kinds of labor receive varying compensation and these things depend on the level of skill and demand. This isn’t a question of whether everyone should be paid equally. It’s a question of how to resolve growing income disparities between top earners and low earners, specifically asymmetric income growth. Top earner income is rising at amazing rates while low earners are seeing meager increases. This has been ongoing for decades. There is an entire discussion on it here so I don’t think there needs to be any more elaboration.
Irrelevant and ultimately arbitrary distinction. Is it bad for certain people to have too much money or not?
Consider that Americans waste more energy and generate more greenhouse gasses that citizens in other, lower emitting countries pay for - we are all on the same planet.
Ultimately these discussions devolve to people just being bitter others having more than them.
What’s arbitrary is your choice of argument. You completely reject my point with a hand wave and make this a comparison between developed and under developed/developing nations
Your point of saying the question is between if someone makes too much is obtuse and, honestly, naiive because the concern is does someone make too much in light of the environment they exist in. If the money they make in their market outpaces and outstrips those of others involved in the same market to an unreasonable extent then that is a problem. It means the market is not being fairly compensatory to those who contribute. This is seen in stagnant wage growth across sectors. This is seen in younger generations inability to purchase homes
But let’s make this about how people on America make more than people in Africa as though such a reductive and myopic straw man addresses the real issue at hand here. No one here. No one. Is saying people in Africa should be poor or not earning a wage that is compensatory to wha they contribute to the world economy. Blood diamonds, cocoa, fishing, etc etc. but your pretending this isn’t a well discussed issue is neglectful of reality
The poster you’re responding to is pretty laser focused on inserting a statement about the overwhelming might of their intellect into the comments on this article. This isn’t so much a discussion about compensation but more a deft display of nth dimensional chess that can only be engaged in by neigh and other titanic geniuses that agree with them.
I stand corrected. Your musings about how to solve housing in the health care CEO compensation thread have convinced me that you are not just posting online to sound smart
I wonder who's spending the PR and lobbying money to prevent all these wonderful solutions from being enacted, and when people "just vote" for these solutions anyway, buying politicians who stop good bills, make voting harder or just ignore the voters.
Taxing the rich is less about the money, and more about the power it buys.
This sort of defeatist thinking is a plague in America. Consider local city councils who decide on approving special permits for housing. You might opt out from voting and some nimby joins and whoops there is another huge development that doesn’t happen, meanwhile rent continues to increase.
I vote. I participate in local politics. And yet, decade after decade, my voice is overridden by the desires of the ultra-wealthy. Where I live, developers run the city, with many council members literally working for development firms for their day jobs, and yet rent continues to increase. The developers are making a killing out there, they aren't struggling to afford their tenth condo building like the individuals and families struggling to find a rental within their price range.
>> You might opt out from voting and some nimby joins and whoops there is another huge development that doesn’t happen, meanwhile rent continues to increase.
I was directly replying to this accusation that I'm to blame for idly standing by whilst nimbys oppress the developers. I respond that none of that lines up with my local situation, and yet your boogeyman of rent increase is ever-present.
By your own admission it seems there are few nimbys and plenty of development. Voting alone will not stop rent increasing. My point was there is a very particular class of issue that can be prevented.
> ... [complaining] instead of just voting, which would solve most of their issues.
You presented "just voting" as a panacaea. You've retreated to the "[single] very particular class of issue" while sounding very triumphant that I'm the fool. Classic motte&bailey.
I don't know about where you live, but I've never had more than one to three opportunities to "just vote" per year. I spend the rest of the time "complaining."
There are hosts of measurable problems with massive wealth inequality. You paint is as one person “just having more”, but that’s a ridiculous reduction.
It’s actually one person having more than literally a billion other people combined, and THATS a problem
You think we can solve problems otherwise but you never explain what is wrong with income ceilings. Why can't we build more houses and our a ceiling on income.
Here's a dirty secret in case you say all the billionaires will run away with their wealth. They aren't worth much.
Bezos isn't Amazon and if he was never born those people would work somewhere and the online store market would be divided somehow.
Billionaires harness labor and capture demand they create little of it then most of the benefits accrue to people who buy things not build things.
The version of it's a wonderful life starring Bezos has him stumbling around Bedford falls marveling that virtually nothing has changed and terminates with him begging Clarence to put him back because he misses his yacht.
Regards your edit. I don’t have magical numbers to give you. I’m curious if you think that makes me wrong.
But what I would like to see is a ratio where workers can buy a home, have a family, have some level of leisure, and be able to afford healthy food. That is not a reality today for people directly participating in the worlds largest market.
And also one that confers some sense of fairness. Tell me how this is at all fair to workers?
My point is that home ownership isn't something that workers in even some of the most enlightened countries have. In contrast, there's incredibly high home ownership in some places that have dubious quality of life.
And so it begs the question why home ownership is voiced as such an important need of workers? I would argue that the incentive structures should be more aligned around good shelter.
Home ownership has been advertised and indoctrinated in the psyche as The American Dream, but I would question that dream...
The vast majority of those countries have large inequality gaps. The only ones that don’t are listed under countries that have higher rates of home ownership
I’m not even about to begin to touch the notion that home ownership, which has been a staple of human history since time immemorial, is not important. That strikes me as a comment waayyy to deep in the kool aid
So now we’ve moved to comparing CEOs in different industries? Your own post compares executives to workers and workers to African workers. The post here talks about CEOs making vast additional sums while workers are getting pinched. Why are we suddenly comparing CEOs in healthcare to CEOs in other markets?
In fact it’s incredibly ironic considering the same people being addressed here, I.e. executives are major contributors to the exploitation of workers in the developing world. It’s the general population that has to learn about then address these issues and nothing would change if executives were left to their devices.
That's an interesting attempt to deflect from the income disparity between those in executive positions to those that work for them. Even in tech, while the salaries of tech workers is high it's nothing compared to the execs.
But let's follow the deflection. Instead of monetary disparity, lets look at energy waste disparity. It was recently shown that the top 10% wealthiest Americans contribute to 40% of the greenhouse gas emissions in the country. As you said, we are all on the same planet. just because they have managed to grab a bigger piece of the pie shouldn't mean that they get to pollute the planet more than anyone else. In both cases the mindset needs to change and those at the top maybe need to be a little less greedy overall.
> That's an interesting attempt to deflect from the income disparity between those in executive positions to those that work for them. Even in tech, while the salaries of tech workers is high it's nothing compared to the execs.
That's quite the arbitrary line to draw. Different roles have different labor markets. If you're a software engineer you are probably getting paid 10 times more than an EA.
> It was recently shown that the top 10% wealthiest Americans contribute to 40% of the greenhouse gas emissions in the country.
To be in the top 10% in America in terms of wealth, your net worth needs to be ~$850k.
To be in the top 10% in America in terms of wages, your annual comp needs to be ~$175.
That means probably most senior software engineers are in that bracket - https://www.levels.fyi/
When wealth inequality within a society is often a contributing factor to revolution and societal collapse, it's not an irrelevant factor.
Your stance is fine and logical, but most people don't feel the same. The difference between your wealth vs a poor African, vs your lack vs a rich American, is that you have the ability to collectivize and reach that rich American physically (not advocating violence, but pointing out that revolutions are violent).
I agree that Americans should also keep this in mind, when we as a country deal with the global poor. We're richer, but they have numbers. Not wise for us to fly too high above them, without using that wealth to benefit them too.
I would argue that it is making wealth inequality a political issue and outrage around it is often a contributing factor for revolution.
It is also worth noting that the results of those revolutions are often worse for both the rich and the poor. There's a long list of countries that have destroyed productive but unequal economies and replace them with those that are worse, and usually unequal but on a different axis.
People like to talk about the French Revolution with Eat the Rich slogans, and forget that it left everyone worse off, led to dictatorship, and eventually everyone coming back around to realizing the old system wasn't so bad.
Wealth inequality affects the people, the polis, how could it not be political? I am not arguing for revolution, I am saying severe wealth inequality is a contributing factor to something I would rather avoid. No American should want our poor so desperate they resort to revolution. No American should want our government to unequally oppress the global poor. Revolution is a product of unequal systems, and I agree it is crushing.
> Irrelevant and ultimately arbitrary distinction.
This is a good point. America and Africa are the same because they’re both on earth. Few people have the good sense to dilute a point to absolutely meaningless terms, all of that muckety-muck about “relevance” and “the topic at hand” distracts from the truly important work: handwaving in such a way to shut down discussion at light speed
Why do people take such low pay for making sandwiches? Genuine question, because doesn't that just lower wages for everyone and sorta peg the value of a sandwich maker to being $X/hr?
> Ultimately these discussions devolve to people just being bitter others have more than them.
No, just like complaining abou theft doesn't betray the secret wish to be the thief, but for there to be no theft. Same for wages not matching productivity, not even inflation, while inequality keeps rising. If you can't understand that, that says solely something about you.
This has been the HN playbook for a while now. In order to shut down a conversation, just accuse the other side of jealousy. Particularly before Musk fell out of the general graces of the user base, it was incredibly common to see comments like this in regard to any criticism.
Fits well into the category of "thought terminating cliche" [1]. Sadly I've noticed a steep increase in them being employed here and other similar sites lately, often with the intent of "winning" arguments.
> Is it bad for [...] people to have too much money or not?
Yes, by definition. The question is, how much is too much money? And in what context?
Put another way, in a given economy, how much do the wages between the top and bottom earners need to differ in order for there to be not only a perceived inequity, but a genuine ethical imbalance?
We are all on the same planet, but we are not all under the same jurisdiction. My vote matters for healthcare in the US, but bears no direct influence on the healthcare in countries in Africa. If I believe that healthcare CEOs don’t create as much value as they are paid, then I may gravitate towards a single payer system and vote for a candidate pushing for it.
This stats is relevant, if you vote based on data of how shared infrastructure is used.
Nonsensical argument. Equality isn't all or nothing it's better if we have less of it even if we don't have none of it. Furthermore people have obvious interests in decreasing inequality directly effecting them more than inequality between their home nation and another.
Rich people having almost all the money means in practice they have almost all the power and our society consistently acts in a fashion so as to serve the interests in virtually all matters right up until something is so important that it solely makes or breaks elections.
Billionaires don't just hoard all the toys they are outright poison for democracy.
If you aren't a temporarily embarrassed millionaire you are yourself benefiting from inequality and value your own interests over the rest of us.
It's ok if you think greed is good just admit it and don't pretend more ethical people are just jealous.
>Consider that Americans waste more energy and generate more greenhouse gasses that citizens in other, lower emitting countries
I have considered it, and it’s why I support ending all immigration (legal or otherwise), even enforcing reverse-migration if necessary.
Every person we bring here 10/20/30x’es their lifetime carbon output. Pro-immigration leftists are some of the biggest polluters on the planet for this reason.
I agree, and to solve this problem I say we nationalize and socialize healthcare to provide it to all citizens free of cost just as they do in many African and other countries. This will remove the need to have any healthcare CEOs entirely.
I thought for a while now that the healthcare industry should have the highest profit margins in a properly functioning economy. Surely saving lives should be rewarded more than serving ads or reality television.
It seems like the common thought is that goods and services that are the most valuable should have the least rewards and incentives for people to produce, when in fact we should incentivize them the most.
For the economically-minded folks out there, there's a difference between profit incentives and total cost. Ideally the economic system would be set up to drive cost of goods down in general.
In your world, the healthcare industry should have the highest profit margins because it saves lives. But in the real world, the healthcare industry has the highest profit margins because it lets people suffer and die. How did we get here?
What is more important than your life! Hey, you're bleeding out right now! Sign this contract where you pay me everything or we won't treat you.
Capitalism only works if you have the option of shopping around, if there is competition. If you're dying, then the first ambulance to reach you get to charge you whatever they like - and they do. And they can take you to an ER where doctors can charge whatever they like - and they do.
So, hey, let's introduce insurance! Now, the purchase decision is separated from the crisis.
Except the goal of the insurance CEO is to maximize profit. No different than any other business. And they do that by not paying for things. Denied. Denied. Denied. And if they can't deny, then they can insist on cost caps.
And of course, the ambulance and ER doctors don't like caps, and so they all leave the "network", and can charge you what they want. And they do!
And the insurance CEOs don't like that and so they say that if you use an out-of-network doctor then they don't cover you, or they cover you even less.
And they pay Trump and Republicans money to pass a law that says, actually they can sell you insurance that doesn't cover anything (if you read the fine print)!
So then maybe you decide that you need a single payer system like the UK, but then the rich people decide that they don't want to pay for the poor people, so they pay the government officials (or they are the government officials) to cut spending and cut spending and now no doctor wants to be a doctor and they can do quite well in a private system or leaving the country.
I think the fundamental problem with your statement is that there is no such thing as a "properly functioning economy". There is only human greed, tribalism and psychopathy.
I think the main problem is inability to shop around. It's basically impossible to start a insurance company. If you do, your profits are capped as a percentage by law. Do you know what makes more profit than 5% on $100? 5% on $200.
Now you have a system where it's basically impossible to start a new insurance company and compete. For the existing insurance companies, the best way to make more money is to pay more for treatments and raise premiums.
Agreed. Current insurance companies have profit margins caps by regulation. This is actually an incentive to drive up healthcare costs because 5% of $200 is more than 5% of $100.
I'm curious what barriers there are to prevent a company coming in offering insurance at 1% profit and undercutting the competition
> Of course, someone will respond moving the goal posts about how it’s different
It's very different though, we're talking about either workers under the same company, or citizens within the same country.
Both of which have social contracts binding the people within those organizations.
If you're working for one of these companies, it's your potential comp going to that CEO. You've also contributed to that income with your work at the company. There's more entitlement and reason to feel like the CEO isn't pulling in the weight of it's comp. That you're not getting the same comp to value ratio. That you could do better or just as good a job as them, etc.
Similarly, as a citizen, you might feel they're not producing value to society proportional to their wealth. That they're not paying their fair share, etc.
If some poor person in Africa had also entered in a similar social contract, they'd have similar rights to complain about your big tech salary relative to theirs. And you might be more concerned about it as well, you might be asking for better social welfare or free healthcare for example, to help them out. Or discuss changes to tax brackets. Etc.
Ah yes this old callous ignorant BS. Get off the internet and go out into the world and talk to your fellow citizens outside your income bracket and stop abstracting things to a point where you feel comfy missing the point.
Your argument is that nothing should be done about the absurd gains of the vertical part of a parieto distribution because differences in the long tail of the horizontal part exist.
Agreed. These articles use a mix of greed, envy, and wrath. It's always, "a good thing happened to someone while a bad thing was happening to someone else!"
How much does a nurse deserve make? Or a home health worker? Or a waiter? Or a teacher? Or a software engineer? Or a business executive?
I’m not prepared to put a dollar amount on what anyone deserves to make, and neither are any of you.
The thing with capitalism is that there isn’t someone going around trying to set prices for things based off some moral philosophy. Prices and wages are based on what people are willing to pay.
Sounds like we have a healthcare CEO shortage then because the market is paying an exorbitant amount for something that doesn’t need to be as scarce.
With that aside, I suspect (and many other commenters here as well) that there’s price fixing involved in executive pay, creating an artificial floor that insulates from the effects of the labor market
Of course we have a shortage of CEOs or can manage large organizations efficiently. Just like we also have a shortage of NFL quarterbacks or MLB pitchers.
Healthcare CEO pay is in-line with executive pay of similarly sized firms.
Simply put, senior management of large corporations is a skill few have, and even fewer are willing to take the responsibility and stress of.
give their money to africa then! I’d vastly prefer that over vacation homes and private jets! I whole heartedly support the immediate seizure of this specific asset class with all proceeds going to the people of africa!
Many reasons, but if you're going to whatabout this aggressively it's not worth arguing. But chiefly because African poverty isn't closely related to inflation in the West, while corporate profits are, and are possibly causal for it.
You're recasting this as "they have too much money!!" But that's obviously not the problem and it's just bad faith to claim that it is.
If you want to get riled up, get riled up over the idea that maybe the same people responsible for poverty in the Global South are also responsible for inflation in the West.
Or you can try to deflect on any related issues in the hope that you never have to worry about it, your choice.
Edit: you added this and I found it particularly ridiculous.
> no problem making thousands more than the global poor and the global rich making more than me either. It is what it is.
Great, so let other people who care do their thing. Do you expect someone making $100k a year to give it all away to some random family with less money? That's an individual act of heroism, but it doesn't make a dent in the problem on a bigger scale.
Also let's be clear: I for one don't care that some people are rich, I care that some people are poor. If one person's richness is a cause for the other's poverty, then it's a problem.
> Not impose meaningless arbitrary income limits.
Who is?
You might not be aware, but a large number of people in the US and Canada are struggling financially right now due to inflation. So when someone else seems to be making increasing profits at the same time as they're raising those prices, you start to wonder about the causes.
This isn't some Harrison Bergeron situation, it's about actually trying to solve problems. If you are content with your life then stay out of the way of the people who want to make things better.
> If you want to get riled up, get riled up over the idea that maybe the same people responsible for poverty in the Global South are also responsible for inflation in the West.
CEO compensation is often disconnected from traditional supply and demand dynamics or direct value creation, and that's a problem.
1. They set their own pay
CEOs determine their own pay packages or have influence over the decisions of compensation committees.
2. Their compensation keeps escalating higher and higher over time, beyond reasonable impact to performance
Companies benchmark their CEO's compensation against that of peers in similar roles at other companies. This leads to a "race to the top" effect, where CEOs' pay keeps escalating without direct correlation to company performance.
3. They're rewarded for short term gains
CEO's often have bonuses driven by short term stock performance, so they can game their decisions to maximize their own pay over the companies long term benefit.
4. Who is considered for the role of CEO is artificially limited
Only people with experience managing a slightly smaller company are considered qualified. This makes the pool of candidate small, which allows them to justify a high pay.
5. They're an inner club
Eventually, it's CEO's hiring CEO's and setting each other's pay. It's normal that they all eventually decide to pay each other more and more. As CEOs are on boards and board members are CEOs.
It depends. In private companies it can be the CEO, or the CEO can be the owner who sets it's own comp. But generally yes, it's the board of directors, but rarely without input from the CEO. So it's not uncommon for CEOs to have an influence over the compensation committee about what their comp should be.
One might think of executive pay in the same way startups think about user acquisition cost versus lifetime value. The question isn't just about the numbers per se, but about the underlying value an executive brings to the organization, and whether that value justifies the cost.
History has shown that markets often reward the bold and innovative, but they also have a way of self-correcting when things go astray. The parallel with executive pay is intriguing: how do you quantify the value of leadership, vision, and strategic acumen?
it seems the debate around executive pay reflects deeper societal questions about value creation and value distribution. maybe, possibly, the solution isn't to reduce executive pay outright, but to tie it more closely to demonstrable long-term value creation, not unlike how successful startups operate.
Or how about ceos serve on other ceos boards and have been approving absolutely outrageous packages for 30+ years and now we’re in clown world.
All of that nonsense about value and vision means nothing when ceos helm companies who are protected by a myriad of what should be considered antitrust violations.
What vision and value could a healthcare ceo possibly provide?
Been in the corp world for 20 years and not once have I seen any meaningful change come from a ceo of companies the size of which we’re talking about.
I agree, their value is greatly exaggerated beyond their clique who are also in onto the scheme. They do bring a lot and are a key player to their value extracting system, more than the actual worker who gets the job done. When things go south they have golden parachutes. Whatever they risk is taken care of.
> I agree, their value is greatly exaggerated beyond their clique who are also in onto the scheme
I cannot concur. I think truly stellar CEOs are worth their weight in gold.
The problem is, we have a great many CEOs being paid like they are the 4 sigma CEOs when in fact they are ordinary CEOs and not worth their pay in iron even.
> how do you quantify the value of leadership, vision, and strategic acumen?
A bunch of rich people on the board vote on compensation. It doesn't have anything to do with quantifying the "value" of the CEO's supposed qualities. They do it based on their own opinions and biases, what they get out of the deal as shareholders and board members, and maybe a commissioned study based on pay of CEOs at similar companies.
If we did have a philosophy that allowed us to perfectly quantify that value, it wouldn't change how the process actually works for setting their pay.
Yeah, no free lunch / easy solutions here. post-ex evaluation often misses the ongoing impact of decisions made during a leader's tenure. also there is difficulty in isolating the effects of a single leader from the myriad of other factors that could influence a company's success post-exit. ex. Market conditions, subsequent leadership, and unforeseen global events, to name a few
I’m personally a bit tired of people complaining about executive pay.
Would the world really be any different if executives were paid $4 million instead of $4 billion?
It’s a drop in the bucket.
It’s like blaming climate change on people who drive Lamborghinis. Yea, it’s a part of the problem, but is it really the problem we should be focused on fixing?
How would the world be a better place if we stripped executives of their wealth?
> Would the world really be any different if executives were paid $4 million instead of $4 billion?
Definitely! You're asking if worsening wealth inequality hurts anything. This greed and unfair compensation is the entire reason why vasts of people suffer through life while ridiculously few get to have control over theirs. I mean that on one hand you have people who can't afford housing and food, and the other can't meaningfully spend whatever they are bestowed with.
> How would the world be a better place if we stripped executives of their wealth?
Would a redistribution of that wealth imply better living standards for everyone?
> > Would a redistribution of that wealth imply better living standards for everyone?
> No.
Why not?
> The fabulously wealthy aren't spending their billions on consumption.
Naturally not, that would be impractical. However, their immense wealth affords them immense power in society and that is of concern.
> You're mistaking wealth and captial for money.
I see this repeated very often by people defending the ultra rich and never understood why they think it was a good reply. Especially in this case, as their point was some people barely scrape by while others have so much money it’s more than they can reasonably spend. Nothing they said indicated they were confused about the difference between money and wealth.
> The fabulously wealthy aren't spending their billions on consumption.
True. They don't have to. They can and they would if it came to it.
> You're mistaking wealth and capital for money.
Neither. I'm saying they hold an insane amount of power over society. Also, nobody has to own so much money. There will be lenders begging you take their money if you're powerful enough.
>> How would the world be a better place if we stripped executives of their wealth?
>Would a redistribution of that wealth imply better living standards for everyone?
Basically no. This is the misconception about wealth inequality in general.
Living standards are more about goods and services produced, not numbers in a bank account. The wealthy consume more, but not proportional to their wealth. most of their wealth isn't used for consumption at all.
Elon Musk must doesn't eat 100 cattle a day, have 1,000 personal doctors, or live in 1 million different houses.
If you took all of Elon's wealth, sold it off and redistributed it (assuming this is even possible), you would just see more expensive burgers, more expensive doctors, and higher cost of rent.
This is because Elon isn't using up all the resources. He just has a higher number in a computer somewhere.
I think this is inaccurate. Complaints about CEO wages are made from positions that perceive their pay has stagnated and is therefore not compensatory. The facts about wage growth bare this out to be true. When you have executives and C suites making money have over foot but you have no movement in common employee wages you will see comparisons being drawn. Those comparisons will then lead to derision.
On the other hand, Moderna's CEO made 400 million last year. Moderna has 4000 total employees. I would argue that ratio is skewed heavily in the wrong direction, and the company would be much better off if the vast majority of that money went nearly anywhere else.
That said, I'd genuinely love to hear any legitimate arguments as to why that payout is in the shareholders best interest.
He made $400 million from stock sales. He got paid 20 million by Moderna. If the first employees agreed to sacrifice their salaries for more equity, they would be similarly well paid.
Your analogy doesn't hold (like most car analogies).
Someone making 100x more than the average worker in their industry simply doesn't have the capability to see those workers (nor the consumer) as anything but ants.
I somewhat agree that C-levels aren't the root of this problem. What's needed is to rein in hedge funds (who corrupt almost all industries) by closing things like the "carried interest" tax loophole.
That analogy doesn't hold. The reason they see those below them as ants is because there are so few like them. If there are only 2,640 billionaires in the entire world then that is very different from being middle class. Billionaires never have to take a commercial flight and never have to wait in line, and never have to wait for table, etc.
There is a quantitative lifestyle difference between a millionaire and a billionaire. And between someone who is compelled to work for a living vs. someone who can subsist at the highest lifestyle on passive income alone.
You are never going to be a billionaire. But you can conceive of being a landlord, surgeon, or FAANG engineer. Those are all wealthy people, you have a chance. But not billionaire.
Do you see? They're like black holes. The laws of physics are speculative at the Billionaire Event Horizon. It seems reasonable that they play by different rules.
No one is going to answer your questions, they're neither sincere, nor interesting, nor the gotchas that you think they are.
There are many countries, and lots of history. Maybe you could point to an example of getting rid of wealthy people and the lot of everyone else improved?
> There are many countries, and lots of history. Maybe you could point to an example of getting rid of wealthy people and the lot of everyone else improved?
I would argue that you are not talking about getting rid of wealthy people in the same context as those you replied to. This is not about 'class warfare' or 'revolution'. No one is going to the 'killing fields'. This is about changing policy via democratic process that changes incentives and structures that allow this to happen in the first place, not by chopping off the heads of rich people.
However, I would argue against 'getting rid of billionaires'. The billionaires aren't the problem -- the inequality is the problem. If we put in place a system that had a 'bottom rung' which was high enough from poverty then it wouldn't matter.
> This is about changing policy via democratic process that changes incentives and structures that allow this to happen in the first place, not by chopping off the heads of rich people.
What do you propose get changed? A cap on how much you can make? A cap on where you can invest? A cap on how you can spend?
I am aware of the examples you were referring to. My point is that your examples are extreme given the context of the discussion. So far, the discussion has been focused solely on executive pay: nobody is talking about the proletariat tearing down capitalism.
As far as examples go, there are countless instances of revolutions - esp. those targeting monarchies - that brought clear, long-term (relative) prosperity to the average citizen.
Getting rid of the king is not the same thing at all as getting rid of the wealthy people. The American Revolution was the wealthy people getting rid of the king. Prosperity resulted.
In the French Revolution, the poor people got rid of the king and the wealthy people. I invite you to look at the result. Spoiler: lots and lots and lots of dead ordinary folkses.
Elon Musk isn't the king of anything. He can't order you to kiss his ring.
I think we need to define 'prosper' before making that statement. What does that mean and who are we talking about? Imperial Spain 'prospered' but at the expense of a large portion of the world's population become enslaved, and then the kingdom itself did not endure. Which examples of prosperity exist outside of colonialism? If only a small population prospers at the expense of the rest of the world, is that a win? If not, then if something has never existed then how can you claim that it cannot happen by changing the status quo?
> I think we need to define 'prosper' before making that statement.
Things go off the rails when devolving into debating the meaning what common and well understood words like prosperity.
You and I both know what it means.
As for Spain, they didn't prosper much from colonialism. The reason is they stripped the New World of gold and silver, shipping it to Spain. The result was not prosperity, but inflation.
> prospers at the expense of
That's not how markets work. That's how theft, looting and confiscation work. Ironically, confiscation is what is proposed here.
Apparently we don't since we don't agree on the example I cited?
Look, I am sure you strongly believe you are correct, but by stating things as true and then refusing to actually discuss them on more than a superficial level you are not going to convince anyone of anything but your confidence in your belief. Using simplistic examples and then claiming that everyone else is wrong foundationally when they try and figure out how your claims apply to other examples is frustrating and unproductive.
> That's not how markets work.
Well, since you are saying in another thread that inflation is as simple as %inflation = $GDPpresent / $GDPlast * 100, then you might forgive me if I take your understanding of markets as a tad naive.
I'm currently modifying a car. Each part is a drop in the bucket yet once I add up the price of them all...oh look I can't afford it and something has to give. Want to guess which 'something' has never been looked at to give for, well, at least my entire past middle age adult life?
I'd like to see the amount that all healthcare workers were paid during this period, for comparison. If it's 400 billion, it seems like 4 billion wouldn't be out of line.
Funny math ends up at $1.3T for healthcare workers. Looks like half an order magnitude higher than your estimate - even if we assume they were paid much less 2 years ago.
Healthcare workers is a much larger group compared to healthcare CEOs though. A few billions divided between a few CEOs is not the same as trillions diluted among tens of millions of workers.
Well, blame the government and their ZIRP policies that caused that inflation in the first place. States will do literally EVERYTHING else but accept well-deserved blame.
Why are product companies going on earnings calls and saying that inflation is coming from their raising their profits if it results from deficit spending?
When a lot of money without collateral is printed, it dilutes the value of the money already in circulation. That dilution of value is called "inflation".
I've heard endless other "explanations" for inflation. None of them make any sense, and don't fit the facts.
You being unable to understand something in a certain way that others do does not make that thing into what you can understand.
Edit: I am being rate limited, so here is my response to the reply below:
Think of it this way: economies are not simplistic analogies to villagers being given free money.
Our incomes have grown a lot over the past century yet things get cheaper. It is never a simple equation. If it were that easy that a bit of deductive reasoning could explain it then it would be pretty obvious, but the fact that we are arguing about it at all means that it isn't, and thinking that it is, because you cannot grasp the complexity, is not going help anything. If the utmost minds in the field are saying that it is really complicated and that they don't even know exactly how it works, then why do you think you have it figured out?
First, because Americans believe someday that they will be wealthy and they do not want to eliminate their chance to join the club[a]. In my opinion, this is the most satisfying explanation. Workers do not want to remove that ladder to the upper class because in doing so, they place a hard cap on their expected outcomes.
Second, American political culture is derivative of a property-rights focused political philosophy. One of the biggest influences on the Bill of Rights and it's explicit protection of property rights was John Locke's Two Treatises of Government. John Locke argues that a defining purpose of government is in the protection of property (life, liberty and property). Americans therefore, view wealth as at least in some part meritocratic and rich, having earned their extra property, are wary of retracting that property. The importance of protecting what's "theirs" is politically, socially and legally baked-in to society.
If Americans' belief in their own prosperity suffer and/or the relative importance of property diminishes in light of other rights (health care, equality, etc.), I think then we might begin to see changes for high-wealth compensation. But, I would argue as long as each of these remain strong, we aren't likely to see any changes.
a. https://www.magnifymoney.com/news/wealthy-survey/, https://www.cnbc.com/2022/08/31/44percent-of-americans-think...