The Upward Redistribution of Income: Are Rents the Story?
cepr.net
cepr.net
Put another way: Just because no software is 100% error-free doesn't mean it's better to go with software that has had no QA whatsoever and is known to be very buggy.
I'm not sure what your implication is, though. Are you afraid of a liberal bias, conservative bias, pro-capitalist or anti-capitalist bias?
If I posted a paper from the Quarterly Journal of Austrian Economics, I doubt that you would consider the "journal" part to be a consolation.
The author (Dean Baker) is a supporter of ACA. Maybe this is some sort of attempt at fomenting support for bringing down doctors' wages in order to help bring down the costs of ACA.
http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf
> Recent trends in both capital wealth and income are driven almost entirely by housing, with underlying mechanisms quite different from those emphasized in Capital.
If the paper reads too academic, here's an accessible write-up:
https://medium.com/the-ferenstein-wire/a-26-year-old-mit-gra...
"this upward redistribution comes from the growth of rents in the economy in four major areas: patent and copyright protection, the financial sector, the pay of CEOs and other top executives, and protectionist measures that have boosted the pay of doctors and other highly educated professionals."
The Medium blogger seems to only be talking about housing.
"In classical economics, economic rent is any payment made (including imputed value) or benefit received for non-produced inputs such as location (land) and for assets formed by creating official privilege over natural opportunities (e.g., patents)."
FTA:"The argument on rents is important because, if correct, it means that there is nothing intrinsic to capitalism that led to this rapid rise in inequality, as for example argued by Thomas Piketty."
I find Baker mostly moderate and nicely curmudgeonly.
Isn't rent seeking the defining characteristic of capitalism? (compared to other ways to implement a market economy)
>When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.
Capitalism is merely a kind of economic system where the means of production are controlled privately for the purpose of profit.
Observed consequences of capitalism are commodity production, competitive markets, sophisticated financial markets and instruments of debt and credit, wage labour, capital accumulation, and rent seeking.
Adam Smith describes mercantilism, which is nearly pure rent-seeking and capitalism. which is oh so much less so.
If you have a royal patent on all beaver pelts from the New World - to where your corporation can order the sinking of ships carrying contraband beaver pelts - then this is nearly pure rent-seeking.
Rent seeking grows like weeds at the edges of capitalism, but it is not, strictly speaking, capitalist but rather that which capitalism replaces.
This may seem pedantic but it's actually pretty useful.
A quote from Wikipedia[1]: "Smith defined "capital" as stock, and "profit" as the just expectation of retaining the revenue from improvements made to that stock. Smith also viewed capital improvement as being the proper central aim of the economic and political system"
So, in capitalism this is implemented as private property. (A perpetual, transferable, exclusive right to some resource) If we f.ex. changed the implementation from perpetual to time limited non-transferable, we could do so in a manner that would retain the expectation of retaining just enough revenue from improvements.
Would this still be capitalism?
[1] https://en.m.wikipedia.org/wiki/History_of_capitalist_theory (The actual source was a broken link)
The "time limited" thing sounds more like 19th Century Progressive thinking informed of Ricardo. It sounds basically like George to my ear. And dependent on how all the math works, I can see no reason it would not be an improvement on perpetual ownership.
I take capitalism to mean a market economy in which capital is traded as private property in a manner where the property holder gets to extract rents from ownership.
As a contrast, I've been thinking of a system where property laws are altered so that property rights imply rent going from the propery holder, not too. I think this can be done in a manner so that the market manages to distribute capital to where it is needed, even more effective than the current system, while also have a few interesting side effects toward social justice and welfare.
Land value taxes are the obvious example. But take copyright. What if those rights could only be claimed as long as you pay for them? It could for example make it much easier for streaming services as either there is an entity paying for the exclusive right, whom you could negotiate streaming rights with, or there is none, implying the work is in he public domain.
I'd wager a government levying an LVT would negate its benefits since such an undertaking would give it sufficient velocity to expand its actions and thus be able to collude with the private sector in all the other, more damaging I'd think, forms of rent-seeking.
The progressive income tax has become a failure due to the wealth elasticity of demand being higher amongst those with more assets (thus being least sensitive to it), along with them finding it easier to avoid it. I don't see an LVT as faring much better.
When it comes to government they should have no rights to the rent extracted, the commons should not be seen as a state asset. In principle it should be distributed as a dividend (which, in turn, could be taxed)
Land rent taxes can't be passed on to the tenant. Land taxes serve to aid in the arbitration of land as a resource. And presumably, we stop taxing labor, and possibly even production in general.
One can always hope.
"Progress and Poverty" is a fine book and explains it all quite well.
Every time you read about the horrors of San Francisco property prices, think to yourself "if they had good Geoist land taxation, that wouldn't happen."
But that's the same with all other production. You're rearranging matter.
While it's not legally exactly the case that when you own a piece of land, you actually own the entire projected cone of matter inwards to the centre of the Earth. No, but ownership of the land (surface area) is intrinsically tied to the geometric volume of that cone (it's just at a certain depth politics steps in, and even further down, physics). Outwards it's the same, up to a certain height it's yours, then politics, and finally physics. Good thing there's this gravity well preventing us from projecting our deeds into the universe.
You can actually rearrange the matter, scrape off the top soil, sell it to someone else, and you still own the exact same piece of land. That soil changed ownership, maybe it had something valuable in it, then so did that. But the piece of land you own, is still the same, it didn't even shrink. (not even a little bit if you define its size to be the angular area).
It's not even made of matter in a sense, it's more like a piece of space. To the extend that you gain certain rights over the stuff and matter that somehow ends up in that space, even if it wasn't there before.
It's also got to do with energy, eventually all the energy here came from the sun, right. That conical slice of the Earth that you symbolically bought, also gives you the rights to the solar radiation energy that beams into it. In a very real sense, it's like you own a fixed percentage of the Earth's yearly energy budget.
Similarly, that other thing, Time, I suppose you'll agree that you can't quite trade time in the very same way as you can trade physical goods. You certainly can't trade someone's time by "rearranging matter" :) Also a particular slice of time only happens once, you can't make more of it. And even if you somehow "buy" someone's time, you don't really get it, your life doesn't extend, your day doesn't gain extra hours. What you really bought are the services that person will perform within their slice of time. At least you can sell land :)
But seriously, while the above is a bit of philosophical dressing, land really is special. Maybe it makes more intuitive sense, living in a country that is packed tight, every square metre planned (even the "trimmings" and leftover bits between roads and such are registered and classified as "rest space"), compared to the USA where there's so much empty space between everywhere. Although, maybe not, obviously in a densely populated city like (say) NYC, space is at a similar premium.
There's some parallels with goods that humans came up with ourselves, such as domain names or IPv4 space, and probably some even better examples I can't think of right now. There's a limited amount of those. But the limit is artificial. We did make more IP addresses with IPv6 and we did make more domains with the new gTLDs. Or maybe with limited-edition collectibles. You can't make new ones because they'd be forgeries, but really only because we say so.
The thing with land is, this is the amount we have, and we know it, and all we can do is symbolically cut it up in parts and symbolically assign those parts to ownership.
Contracts, holding shares, property... These are pretty dang fundamental, but you're just brushing them all off as "rules." It's absurd to try to study Capitalism SEPARATE from those rules.
Housing rents in pretty much all markets are productive in excess of the real life utility from the housing that earns that rent due to the myriad restrictions that prevent supply from growing proportionally to demand.
Lawmakers should as a general rule try manage both supply and demand curves so that the intersection between the two moves towards the origin or stays relatively the same.
It does. Everyone has self-ownership, and as such services can only be sold in the units contracted. A contract for a single indefinite unit service (slavery) would be logically consistent, but a property rights violation and therefore invalid.
Same thing with farmland. There's a farm there because somebody made a farm there; it wasn't always farmland. Somebody cut down the trees, cleared the brush, broke the ground, and started planting. It wasn't easy. Later, somebody (a series of somebodies) bought the equipment for the farm to be economically viable in the current environment.
Real rent is when the king or somebody gives you a monopoly on selling boot blacking (or whatever), so you can charge whatever you decide, and everybody has to pay it or go without boot blacking. I don't see a farm or a mine in the same category. (I do see a house for rent in an area with zoning restrictions in the category of economic rent, though.)
I guess I also didn't give a concrete place to draw the line, though...
In the case of he farmer the cost/value calculation is probably such that a 10-20 year contract would be enough for the investment to pay off.
So it seems I'm arguing that perpetua, inheritable, property rights can be excessive, and thus create rent
an exploration company would peg an exploration lease-the monopoly right to explore for minerals on that land. They pay the (state) government for the privilege.
when an economic deposit is discovered, the company can apply for a mining lease-the monopoly right to exploit the tin deposit. The pay the government for the lease, and also a royalty on the minerals.
Whilst you can say that the mine was not there, and someone had to invest capital to exploit the deposit, the minerals themselves were always there, and once extracted are gone forever.
Perhaps the price at which the government sells monopoly mineral rights relative to the profits sets the boundary between rent seeking and not?
Or are you defining pursuit of profit to be "rent seeking"? If so, your definition is in error; that's not what is meant by the term.
Capitalism promotes the former type of trade. For example inventing patents and copyrights as tradable property. these types of propert have no intrinsic value besides the rent extraction.
Those are elements of a state-enforced monopoly (over patents/copyrights). Either way, the latter example you cite is (I'd argue) just as prominent as the former. It's called value-creation (or addition?), and is the core of a supply-chain.
I wouldn't say the defining characteristic, but it certainly happens a lot, and is what Marx and now Piketty warn about...
(rent seeking of course being the movement of capital to where it can obtain economic gain without any benefit to society)
That being said, I think as our technology progresses, we, at least in America, have plenty of land that would be good once we can figure out reliable ways to generate energy (already mostly there with solar, wind, geo) but more importantly water. I have always imagined my off the grid setup as sufficient to power a dehumidifier that pulls water from the air and filters it to potable. (in concjuction with a well if possible, sometimes though the water is below rock or other tough structures or is too deep.)
The original point is though, that the more wealth you have the more you can generate and create (for yourself or others), but the less you have in a growing population of less-havers, pulling yourself up is harder than ever.
tldr - The middle class is what's really under attack here, as the poor have formerly had more upward mobility into becoming middle class. That is going away with the current growing inequality.
Both reduce the demand for local human labor, and thus depress wages. They cause wealth redistribution upwards by providing a power imbalance between the capitalist and the worker.
David Harvey did a nice talk about this: http://m.youtube.com/watch?v=qOP2V_np2c0
And that's not even getting into bailouts.
Technically to consider it a rent the copyright holder would not be producing anything, which just isn't true. Well, not for patents on genuine inventions.
The same is true for financial services. They do provide a service for the money.
Even by the (overly restrictive, IMO, as it excludes economic monopoly rents that are not derived from government-granted monopolies), copyright and patent are sources of rents drawn on the government-issued monopoly right to exclude others from duplicating the covered subject matter (or, in the case of patent, even independently developing it).
Even that restrictive definition upthread does not included the requirement that the rent-seeker was not required to produce something in order to secure the government-granted privilege from which it extracts rents.
Rents by the OP's definition are the kind of revenue sources you wouldn't have in near-statelessness, which means it takes state bias to create them. Without a state it would be hard to lay claim to vast swathes of land peacefully, and homesteading would be abundant on unused land. Even in a simplified state model that offers courts to protect property rights with, you couldn't have the widespread real estate market manipulation we can simply observe with how out of control land prices have risen in the past twenty years.
That doesn't ring true. Software is sold in far more complex ways that in no way benefit from the copyright regime. That could mean software consulting and support for open source projects, or it could mean advertising and IAP-supported free-to-play games. Both are extremely lucrative.
You might want to call in-app purchases something that corresponds to copyright. I think all that matters is what is enforceable (ask the movie and music industries). That game services have figured out how to make the enforceability of copyright irrelevant by centralizing hosting and matchmaking is the far bigger story.
Put another way, the researchers bring up removing patent regimes on drugs in order to save money and reduce rents. That's only because of the peculiar way that drugs work—it doesn't necessarily make sense. Jana Hunter, an indie musician, had this great phrase: "If technology provided loopholes for free food and shelter, that’s what we’d be arguing about." [0] But technology only provides loopholes for some free stuff, like music and drugs, and we can't just decide that property rights can be ignored when they're cheap to exploit (like copyright or patent infringement).
On the other hand, we will just, in a Darwinian way, end up in a world where the technological loopholes intrinsically don't exist. This happened in commercial video games, and it happened so quickly only because of enormous ingenuity, an extremely competitive market and a complete disconnect from the conventional political process (ever heard of a video game studio lobbyist?).
If you want to improve wealth distribution, messing with the mechanics of how things are bought and sold, as always, isn't going to get you very far. Maybe just raise taxes, you know?
[0] http://lowerdens.tumblr.com/post/34308869231/on-spotify-and-...
Copyrights and patents are state-granted exclusionary privileges, not property titles.
If you want to improve wealth distribution, messing with the mechanics of how things are bought and sold, as always, isn't going to get you very far.
What are you talking about? Abolishing and reforming institutions is one of the most powerful tools there is.
Maybe just raise taxes, you know?
The whole point of this paper is that simplistic fiscal shenanigans like this don't work.
When John Locke argued for the moral right of property as a result of labor, he also argued that it only applies when there are an abundance of resources. An extension of that though could be, why not look at all rent generating propert with suspicion. Property rents, as a result of exclusive rights to scarce resources, could be seen as an externality, as a result of everybody else accepting those exclusive rights without compensation for being excluded.
Insofar as current arrangements of a state holding eminent domain, yes. Not intrinsically.
Property rents, as a result of exclusive rights to scarce resources, could be seen as an externality, as a result of everybody else accepting those exclusive rights without compensation for being excluded.
A property owner may extend easement or some other non-possessory right to usage, so to immediately classify all property as an "externality" is flat out wrong. If anything, private property rights are a necessary (if not the primary) precondition to resolving externalities.
Without the state taking the cost of enforcing the exclusivity the possessor would probably have to invest some cost in securing it. Either buying weapons or entering some kind of contractual agreements.
In either case the cost would probably correlate with the value of property. The rent, then, is the value the possessor can extract from the property as a result of not having to take those costs. In fact, it is the other way around, the cost is distributed among the non-possessors.
Assuming we would like to avoid a situation where possessors have to invest in violent means of exclusivity, I argue that the states role should be to enforce propery as, fair, contractual agreements between possessor and non-possessors.
But the nature of uncertainty of action means that such a cost isn't really quantifiable. It seems like you're trying to say that the rent is the value derived during idling. But idling can serve a valid social purpose in conferring availability of something, or when land is converted for a purpose only on occasion but must necessarily remain available by idling.
A possibly fairer way might be to let you pay what the next highest bidder is prepared to pay. That means you unique addition remains your profit, while also quantifying the opportunity cost instead.
Regarding idling, I'm not arguing against that, only against the system by how it's scheduled and who pays and who gets paid for it
No, property rights are intrinsically a creation of government through law, whether or not the government reserves something like the power of eminent domain.
If you take someone's home, they are homeless. If you copy someone's cat video, they still have their copy to enjoy. That's a huge distinction.
Information, because it isn't matter, can be copied very easily. It's actually quite tricky to make sure that only one person has a piece of information. This is why bitcoin and block chains are technically interesting.
All of this impacts the consequences and morality of the two kinds of "stealing". Stealing matter necessarily harms someone. They just lost something. Even if things can be easily replaced, the identity of matter is important. I could go out and buy another birthday card just like the one on my desk, but I'll never be able to truly replace it because my grandpa gave it to me just before he died. On the other hand, the identity of an instance of data generally isn't important. If I lose a video of my grandpa and then acquire a different copy, it isn't that important.
That's not the argument against IP. The argument is that IP isn't a thing as such. When you are copying ideas, the originator of the idea can eat his cake while you bake your own (literally). The crime (again, sometimes literally) is that you disrupted someone's monopoly, not that you took their car so they don't have a car anymore.
The whole concept of intellectual property is that it's supposed to be a win-win; limited monopolies are granted to encourage creation and innovation, and the public benefits from the innovations and the growing public domain. If, as proposed, rent seeking in the form of IP protection is causing wealth imbalances, then the bargain is probably a net good for the monopoly holder and a net bad for the public. If that is the case, the terms of the bargain should be revisited. The types of patents granted, how strict the process is, how soon things enter public domain, the terms of "fair use", and other things might need to be relaxed to make the deal fairer to the general public.
That said, the "boom" in startups is all about creating rents as a way of funding the business. Whether its the percentage cut that Uber or AirBnB takes or the price you charge advertisers for access, those are by this definition just rents transferring wealth from the consumers and workers into a third party's pocket.
Software patents on the other hand, don't seem to do anyone a service, and yet we have to pay a price for them.
I believe this to be a myth caused by lamp-posting. The world is a much better place than it was 30 years ago, we just haven't found the right way to quantify exactly how much value 'high technology' has brought to their lives.
Measurable wealth might have been redistributed upwards, but everyone is still better off regardless. I'd rather be poor today than rich twenty years ago.
Now, there are practically no informational barriers at all. I've shifted from looking for options to take to sifting through all the available, great ones. The quality of what you can find on the Internet these days is just mind-bogglingly better.
What this means is that time spent 20 years ago is worth less than time spent now. And since time is far more valuable than money, there isn't an amount of money you could throw at me to make me yearn for those old days.
I use the similar logic to come to the conclusion that I'd rather be a lower-class American than a Chinese billionaire. I'd actually rather be a middle class Chinese than a Chinese billionaire, if only because that means I could move to the States. Everything I've read about these people indicate myopic, ugly personalities. The social fluidity of the US is worth more money than I could ever imagine, as increasing the value of time spent is worth more than any amount of money.
This makes it sound like rich people 20 years ago had it pretty bad... What did technology add to their lives aside from convenience?
Some days I feel like I've won the 'history lottery'. Right age at the right time in the right country.
I'm not certain I would choose the same thing twenty years from now. I think the essential reason why I would make that choice today isn't going to be all that much more compelling in the future, meaning the money is going to play a bigger role.
All-in-all, I think we vastly underestimate what the Internet has done for us. Like by a factor of millions.
I'd rather be poor today than rich twenty years ago.
Most "poor" people have TV's, VCR's computers and smartphones. Most poor people can find places to sleep or crash or get groceries and handouts to survive. With all of the government plans, it's actually pretty easy to be poor in America:
http://www.forbes.com/sites/timworstall/2013/06/01/astonishi...
You want to see real poverty? Go to Hati, go to Panama, Cuba or go to nearly any South African country ravaged by centuries of war.
People literally have NOTHING. They're thankful for clean water, and a small meal. Forget about clean clothes, basic hygiene and other multiple things we take for granted every single day.
Poor today means homelessness or working several jobs. Rich in 1995 meant flying around the world and eating really well, great company...lap of luxury, really.
You must really like your iPad.
Sure, we are better off as a percentage, because we now have 7 billion plus people in the world. 20 years ago there were only 5 billion... but the actual numbers of people with poor living standards is, I would venture, actually higher. There were only 2 billion in 1927...
As to your original point that little improvement in living standards being a "myth caused by lamp-posting"... I don't know how you can ignore the actual numbers regarding lack of living standards reflecting productivity gains for the lower-middle class... It's not a myth at all, it's a fact that we work longer hours, for less pay adjusted for inflation, with higher-costs of living.
The industrial revolution was supposed to be about giving man the time to pursue more noble goals, but instead it became a notch in the capitalists belt of exploitation of the workers.
In short, I think your post is nonsensical.
The most generous restatement of this that I can imagine is, "I'd rather be middle-class today than rich twenty years ago." Because poor is poor. Not knowing where you're going to eat next, not knowing where you're going to sleep, not having money for formula or diapers, there's no time where that's good.
But even with the generous form, I still disagree.
Having a Blu-Ray player and a flat screen today... versus a Laserdisk and a Projector twenty years ago... An Android today... versus a Car Phone back then... A house today... versus 4 homes, one of which is overseas back then... Hell, you can't fly a Concorde today.
There are many shades of 'poor-ness'. I'd model them as various forms of insecurity. Poor is not just one thing.
The main thing that hurts the most is loss of hope. If you have no hope that things will ever get better, then you'll stop trying to find jobs, you'll stop standing up for yourself, you'll settle for whatever security you can find, be it in the arms of a psychopath or not.
With the Internet, you can find out about the larger world. You can talk to people that are not part of your tiny social circle. It's a life raft that you can hold on to.
I met this older lady at the bar once who was in a real rough spot, she had a fixed income that she thought was so small that she couldn't afford her own space, and no access to the Internet to look for anything and no ability to do so even if she had, old people are scared of Internet. She was living with several other women in the house of a man who I'd gathered was at least being emotionally if not physically abusive to. He was charging them rent and coercing favors out of them and being controlling. It was all this lady could do to get out of the house once a week.
I happened to have my laptop with me, so I asked her what her income was, then went on Craigslist and found her several neighborhoods she could move to that fit all her criteria.
The next time I saw her at the bar, she had managed to secure a rental using the information I'd given her. She was a million times happier and effusively grateful for my pointing her in the right direction.
What she had told me pissed me off to the point of being willing to consider violence to rectify her situation, but all she really needed was a few minutes on Craigslist to radically transform her life.
Never underestimate the value of information. The rest of the tech can jump off a cliff, but you will have to pry the Internet from my cold, dead fingers.
Sure, you just described a lack of knowledge... But she ALSO had the financial freedom to make the choices she wanted.
That's well above "poor" in my mind.
You're describing someone who thought they were poor. Sure, yup, some people are there. But many people are ACTUALLY poor - and the claim was that it's better to be ACTUALLY POOR TODAY, than RICH twenty years ago. I don't buy it.
Sometimes the difference between being ok and standing on your own feet and being downtrodden boils down to knowledge. You're trying to move the goalposts on what 'poor' means, and you keep having to move them because the Internet makes life so much easier that you have to actually be pretty much homeless before it'll qualify for your definition of 'poor'. People like the lady in my story, when they don't have access to social contact and information, fall prey to psychopaths because they perceive they have no other options. The psychopaths take their money and their dignity and leave nothing left. Then sure, they'll fit your definition of poor.
You know what was nice when I was a kid and we were bouncing around from apartment to apartment because my mom kept losing jobs? My Nintendo. My mom won the money to buy it from a radio contest and managed to convince a coworker to sell one to her. It was the only thing I wanted for Christmas that year.
Children, at least the ones I grew up with, are awful, status-conscious, hateful things. They're much better now, but there was no love lost between me and my peers growing up. We bemoan the distractification of America, but I gotta tell you, I'm eminently grateful that I could escape those horrible little shits into a brightly colored world where practice and patience earned you reward after reward.
I had books, and read the ones I had plenty, but having that Nintendo was just the greatest thing in the world for me.
I've seen firsthand how technology curbs violent impulses, raises moods, defuses tense relationships. Distraction from your problems is a real, take-it-to-the-bank luxury when you have no control over your life.
YES, ABSOLUTELY, sometimes it boils down to knowledge. But MOST OF THE TIME, it DOESN'T.
I'm not moving the goal posts. I said poor, and then you wanted to talk about people who aren't poor, but think they are, and if you educate them, it turns out they're not poor.
> They're much better now
Dude, not cool. Do you have a paper towel I can use to clean the milk off my screen? You just made me spit all over.
And now you're moving the discussion between having KNOWLEDGE, and having TECHNOLOGY. Those are, in fact, different things.
And let's just BACK UP.
Let's pick that kid with a Nintendo. Which was, of course, more than 20 years ago. Is he really THAT much better off with an XBox One today?
And please remember, the target we're discussing is "poor today versus RICH 20 years ago." RICH. As in, if you want it, you buy it. If you need information, you hire people who research it for you. If you are ill, you go to the best doctors in the world. RICH. In 1995. Rich in 1995 ain't too shabby. In fact, I'd say it's much better than poor in 2015.
That is, in a nutshell, the difference between 20 years ago and today. They used to be different. Now they are not. Having the technology eventually exposes you to the knowledge. Knowledge now is completely free if you live in the US, because of free access to technology. Between Wikipedia, Craigslist, various social media outlets, there is no way you can be on the Internet today and not find what you are looking for, if it's important to you, eventually. Very much not the case in the 90s.
This has a direct effect on the experience of being poor.
> Is he really THAT much better off with an XBox One today?
Yes, because society was that much worse 20 years ago. What you were escaping was that much more awful.
> Rich in 1995 ain't too shabby. In fact, I'd say it's much better than poor in 2015.
I would rather be 30 and poor today, than 30 and rich in the 80s. You may disagree, but I was not very well off not that many years ago, and I was able to leapfrog what would have been decades of hustling to get where I am now, because of advantages that I wouldn't have had 30 years ago.
You're right, 30 and rich in the 80s isn't too shabby. But that would mean that I would have 30 fewer years of life in today's world. You're completely discounting the value of time and over-valuing money. 30 years is an unimaginably enormous amount of time. I can get 100x the value of my time out of a year here than I could have with any amount of resources in the 80s. If I chose to be 30 and rich in 1985, that means I would be in my sixties today. Being young in today's world is worth, to me, any amount of money you can name.
I'm reminded of the fact that things we find totally boring today were fine luxuries in the Middle Ages. Chairs were the domain of the medieval super-rich at one point in time. The conversation we are having right now likely could not have existed 30 years ago.
Visit the Seven Wonders of the Ancient World.
Visit the Seven Wonders of the Modern World.
Go to Cannes Film Festival.
Go to Pixar movie premiers.
Personal chef.
Personal masseuse.
Back-stage passes to go see amazing rock legends, many of whom have died by now.
Influence politics.
Invest in corporations, like SOLAR power, WIND power, NUCLEAR power. Fund start-ups.
Help stabilize and transform former Soviet Block countries.
Fly a Mig.
Visit the Galapagos islands.
See a living White Rhino, up close.
Swim with dolphins.
Swim with green sea turtles off Maui.
Eat at Mama's Fish House on Maui, one night, and stay overnight in Hana so you can wake up early and visit the seven sacred pools bright and early.
Walk the Great Wall of China.
Go to the Olympics.
Ride a hot air balloon.
So, let's come back to what you said.. "100x the value"??? Come on. Name TWO things a poor person can actually do today, that would make them tangibly HAPPY, or tangibly BETTER OFF that a rich person couldn't do 20 years ago.
> The conversation we are having right now likely could not have existed 30 years ago.
First, you're moving the goal-posts, the discussion is 20 years ago. And second, nonsense. I was active on well over 100 BBS systems.
How to attain personal fulfillment. How to leave a legacy. How to earn the love of your family, friends, and community. How to retain a sense of control over your destiny. You can do all of these things with or without the wealth that would allow you to go to Cannes. You can fail to do them even if your personal masseuse is also your mistress. You can even do them if you're poor.
Having the easy access to information that today's Internet offers means you don't have to limit yourself to your own mind, your own efforts.
Fly a Mig? Christ man, talk about missing the point.
And MOST of the problems that MOST people face, have already been solved by the time someone is rich. As in, seeking food, seeking shelter, seeking transportation, clothing, future security...
> If you solve them adequately, then you are happy and fulfilled.
That's not how my life works. My daughter just had heart surgery. It cost over $50,000. My cut of that was about $2,000. It saved her life. You still think I'd rather be POOR today?
> If you don't solve them at all, then you are unhappy.
In my experience, there are two broad types of people - those who imagine how happy they'll be after they accomplish their list of tasks (you), and those who are generally happy and find a way to put joy into the things they're doing (me). Since I'm generally happy, the gravy for me is getting to experience more out of this life and help other people.
> How to earn the love of your family, friends, and community.
I don't believe I do "earn the love of my family, friends." I think my family and friends love me unconditionally.
> How to retain a sense of control over your destiny.
We're talking about POOR today. ACTUALLY POOR. And ACTUALLY POOR people do not have nearly as much control over their destiny as you're painting.
> Fly a Mig? Christ man, talk about missing the point.
I specifically asked you to name TWO things a poor person can actually do today, that a rich person couldn't do 20 years ago. You're full of criticism for my point of view, but I've given you a terribly simple challenge, and you have not risen to it. If you want me to understand your point, then try STATING your point (via examples), rather than criticizing mine.
And to defend myself, I find that in debate it's best to try to understand the most charitable rendition of the other person's argument. You're breezing right past several of my points: "Influence politics. Invest in corporations, like SOLAR power, WIND power, NUCLEAR power. Fund start-ups. Help stabilize and transform former Soviet Block countries." Those are all, in how I view them, about helping people. Most of my other ones were based on the fact that a rich person isn't struggling to survive, and is instead seeking to squeeze as much out of this life as possible. Carpe diem. And evidence points to helping people, and having unique experiences, as being far more enjoyable than merely having possessions. So, if I picture myself as rich 20 years ago, I come up with things (for that list) that a poor person could not do today, but that would make me happy.
If you want to attempt to convince me, then why don't you try to list concrete examples of things a poor person could do today, that a rich person 20 years ago could not do. Since that's the actual topic at hand.
And fine, let's take the most charitable form of your argument - Having The Internet Is Awesome. Fine. 2 billion people have access to the Internet. That means roughly 5 billion people do not. Perhaps the agreement that you and I can make is that it would suck to be poor, among those 5 billion people today.
> And MOST of the problems that MOST people face, have already been solved by the time someone is rich. As in, seeking food, seeking shelter, seeking transportation, clothing, future security...
Most people think these things are granted by personal wealth. Students of history and geopolitics know better. The US is a rich country with political and economic innovations allow for a kind of security people in other countries only dream of. No amount of personal wealth can hedge against political upheaval, hell, wealth makes you a target more often than not. Personal wealth gets you the ability to fly a Mig. National wealth is having enough ambient wealth in every single community so that starvation is really rare.
I was just reading an article where the author's grandma's grandma had gotten thrown out onto the street by their landlord in the middle of the winter. The whole block banded together and chipped in a coin out of their own meagre lives so they could rent that room for one more month. Had that happened in any other country, they would have frozen to death. That's national wealth, that's what is really helping the poor. In other countries, you have to have personal wealth.
Our country has only gotten richer and richer in the last thirty years. Again, practically invisible to anyone not specifically looking for it, it's hard to see the forest for the trees. But it's there, and I'm telling you, if it were me, I'd rather lose everything and become homeless today, than to step into a time machine with a barrel full of time-appropriate cash. I'm not making that decision for everybody. Just me. Sure, it would suck for awhile to claw myself out of poverty. But over the long run, I believe I'd be better off. Barrels of cash aren't all that hard to come by. Massive national wealth isn't, and it's the national wealth that I'm basing my conviction on, along with my own understanding of my abilities.
> That's not how my life works. My daughter just had heart surgery. It cost over $50,000. My cut of that was about $2,000. It saved her life. You still think I'd rather be POOR today?
I don't want to dissect this too much because it's your daughter and I want to be respectful. But my point is that national wealth created both the option to have heart surgery and the ability to have it relatively cheaply. We can dive into that all day long if you like. These days the not-so-well-off crowdfund these kinds of major life events, it's just another way of getting wealth to where it's needed, same as passing around the hat allowed the aforementioned author's great great grandmother not freeze. Of course, you have to have insurance to get the option for heart surgery, maybe, plenty of children's charities out there, this is an open problem that the nation is trying to solve.
To cut you off, of course the not-so-well-off isn't the ACTUALLY POOR. (you really seem to have a complex over this, as if I don't know the difference or something) But again, the only thing that really solves the poor's problems is national wealth. There's not enough liquid wealth to spread around to stop poverty.
> I think my family and friends love me unconditionally.
Hehehe, good thing you live in a country where the things that can seriously test that belief in unconditionality generally don't happen. Totalitarian states insert politics into families specifically to keep these sorts of bonds from giving communities the power to resist the state.
In case you missed my point, it's that just about everything you think of as 'you', your life, your wealth, your family, your very mind, is a product of the country you live in. And it's not a sharp division between ACTUALLY POOR and whatever the opposite of that is, it's an immensely varied gradation and ecosystem of abilities, disabilities, the services that make those disabilities less onerous, the efforts to spread information about those services, government programs, communities, the well-meaning and charitable, and the options people have available to pull themselves out of poverty. There is a ton of attention being paid to the actual problems both poor people and ACTUALLY POOR people are having, and a lot of resources devoted to promising options.
> We're talking about POOR today. ACTUALLY POOR. And ACTUALLY POOR people do not have nearly as much control over their destiny as you're painting.
You are talking about that. I made an assertion concerning my own convictions that you are taking out of context. Now you are asking me to substantiate my own convictions using your weird funny logic. Nothing about being poor keeps you from helping people. Most of those volunteering in soup kitchens are closer to the people they're serving than they are to you. And the things rich people try to do to help the less well-off often boil down to ego gratification and do no real good.
> If you want to attempt to convince me, then why don't you try to list concrete examples of things a poor person could do today, that a rich person 20 years ago could not do. Since that's the actual topic at hand.
I can't even begin to try to convince you because the very way you think about wealth is utterly silly.
And it was almost identically rich 20 years ago. Actually, since the national debt keeps going up, and we've engaged in multiple wars since then, a case could be made that we're worse off.
> National wealth is having enough ambient wealth in every single community so that starvation is really rare.
So, maybe what you meant to say was, "I'd rather be what most people consider to be poor today (as long as I got to live in the United States), than rich twenty years ago."
> Our country has only gotten richer and richer in the last thirty years.
I disagree. We had the worst financial crisis since the Great Depression. People were genuinely hurting. Employment among many groups (such as "poor" laborers) hasn't rebounded. Meanwhile, 20 years ago was in the middle of a boom.
> I'd rather lose everything and become homeless today
...as long as it's in the United States. (Which you did not clarify in the first place.)
> I'm not making that decision for everybody. Just me.
Sure, but you presented your argument as rational, not just personal. And then for some reason you were BOTHERED that I tried to understand your position. Why state your position, if you don't want other people to take it seriously and try to understand it?
> Barrels of cash aren't all that hard to come by.
All evidence points to GENERATIONAL poverty being the norm. So, yes, wealth IS that hard to come by.
> Massive national wealth isn't...
Far out. So, as a rich person 20 years ago, you'd move to the nation with the greatest national wealth.
> But my point is that national wealth created both the option to have heart surgery and the ability to have it relatively cheaply.
And my point is that TWENTY YEARS AGO, the United States wasn't THAT different than it is today. In fact, relative to median income, the same medical procedures cost more today (even adjusting for inflation) than they did back then. By a LOT. And most outcomes aren't proportionally better. We're still way behind in life expectancy and infant mortality, for instance.
> as if I don't know the difference or something
No, I'm trying to understand your statement, "I'd rather be poor today than rich twenty years ago." I'm trying to actively listen, and keep asking you if I'm understanding you correctly, even to the definitions of each of those words "poor" that I use in my head.
> But again, the only thing that really solves the poor's problems is national wealth. There's not enough liquid wealth to spread around to stop poverty.
That's a great assertion to digest, and I don't buy it. There are nomadic people, to this day, living in areas of Africa we'd be tempted to call a desert, who work less than 10 hours a week gathering food, seeking shelter. They spend the rest of their days lounging, chatting, teaching their children. If there is enough food and water to provide for a population, everything else is relative, isn't it? They even take care of their neighbors when they are sick.
> Hehehe, good thing you live in a country where the things that can seriously test that belief in unconditionality generally don't happen.
Let me imagine the worst imaginable environment - I'm a Jew, living in Nazi Germany. I think my friends and family still unconditionally love me. Are you convinced they don't?
> Totalitarian states insert politics into families specifically to keep these sorts of bonds from giving communities the power to resist the state.
So, again, I think you should have said, "I'd rather be what most people consider to be poor today (as long as I got to live in the United States), than rich twenty years ago."
Because if you and I made a list of all of the poor people in the world today, I think you'd be forced to agree that MOST of them live in places you would not ever want to live. No national wealth. Totalitarian government. Warlords. Corruption. Not enough food and water. No opportunities for employment, or education. No internet.
> In case you missed my point, it's that just about everything you think of as 'you', your life, your wealth, your family, your very mind, is a product of the country you live in.
In case you missed my point, the US twenty years ago isn't THAT different from the US today, to offset the difference between being able to financially provide for my family, and NOT.
> the options people have available to pull themselves out of poverty
But they don't. All the data says you're EXTREMELY likely to have the same wealth as your parents.
I think, in order for your assertion to make any sense, you must believe that most people are poor because they're not as motivated as you are. I'm not even trying to load that statement, or put judgement on it. That's the only way I can make sense of what you've said.
> There is a ton of attention being paid to the actual problems both poor people and ACTUALLY POOR people are having, and a lot of resources devoted to promising options.
I don't buy it. Even our beloved veterans are homeless, unemployed, and suicidal. I'll think the options are promising when they start to have an impact. And I mention veterans, because even Conservatives claim to want to use government to help poor people, as long as they're veterans. But we still haven't put a dent in it.
> I made an assertion concerning my own convictions that you are taking out of context.
No, you made an assertion, and I want to discuss it, to see if it was rational, and to try to gain knowledge from whatever perspective you have.
> Most of those volunteering in soup kitchens are closer to the people they're serving than they are to you.
Most of the people stocking soup kitchens are more like me. Disposable income, secure in their career. And twenty years ago, there were more people like that (relative to population size), than there are today. The middle is shrinking.
> And the things rich people try to do to help the less well-off often boil down to ego gratification and do no real good.
A rich person is CAPABLE of doing everything a poor person can. You may be right that the rich need to be educated.
> I can't even begin to try to convince you because the very way you think about wealth is utterly silly.
/sigh
Thanks for the insult.
WHY BOTHER talking, if you don't ENJOY talking with people who think differently than you? SERIOUSLY?
I could argue against all of these points, but it seems like that would be pointless.
> So, maybe what you meant to say was,
I would rather lose absolutely everything (including things that have helped me out in the last 20 years like family assistance. the idea is that I have to go by my wits as much as possible) and stay in today's USA than step into a time machine with any amount of money to mid 1980s USA. I believe that, just by relying on national wealth, I could become as rich as I wanted to in relatively short order in a way that would have been impossible 30 years ago. You don't think the world's changed all that much but I do. We seem to lack the shared vocabulary needed for me to convey why I think that way.
> ...as long as it's in the United States. (Which you did not clarify in the first place.)
I did, in another part of the thread. I thought you would have been thoughtful enough to follow the rest of the discussion to get the missing pieces of my argument. A lot of times I'll, not just look at the whole thread, but also click to see some of the author's other conversations to see where he / she's coming from.
> So, as a rich person 20 years ago, you'd move to the nation with the greatest national wealth.
Maybe. Depends on how much I have tying myself down there. The aforementioned author's great great grandmother had brothers that died in the Holocaust rather than emigrate from Latvia because they had a thriving local business there. Elon Musk brought himself and his family over from South Africa, that's how much he believed in national wealth. I'm not sure I would come to the same conclusions so quickly, and Musk did have a really ugly childhood that he was anxious to escape. I perhaps might have found a local maximum rather than a bigger pond. Or perhaps not. I don't have the experience of growing up in an emerging market to draw on to be able to make a real guess. I can only judge based on my current awareness.
> I think my friends and family still unconditionally love me. Are you convinced they don't?
It's one of those things you don't know until you know. Or you know until you don't. Do I think it's possible you're miscalculating these feelings? Certainly. I do know that you haven't carefully considered the full breadth of things that could affect your relationships. What if part of your brain shut down and you became a different person than you were before? Read an article where that precise thing happened recently. What is it precisely that your family loves about you and what would happen if that thing were to be taken away? If you delve into that question, I think you'd find that each member of your family has different values and would react differently to each kind of stress. You'd also have to figure out what unconditional love is and how to define the event of that love going away.
Things get a lot more difficult when you apply real logic to mushy situations.
> the US twenty years ago isn't THAT different from the US today
I very much disagree.
> All the data says you're EXTREMELY likely to have the same wealth as your parents.
Data does not predict anything. It only describes what has happened. In a certain light. If you examined the data yourself and asked your own questions of it you might come to a different conclusion.
> Most of the people stocking soup kitchens are more like me.
How do you know this? Have you gone and looked? Have you asked a significant number of them their stories and how they came to volunteer? I'll admit my assertion in this regard is probably about as valid as this one. But that's how you find out.
> Even our beloved veterans are homeless, unemployed, and suicidal.
What that means is that the mental problems caused by going to war are worse than we have the ability to effectively help, at this moment in time. But there's plenty of research going into things like PTSD so that we can more effectively help these people. Suicide is an extremely difficult problem to solve.
> WHY BOTHER talking, if you don't ENJOY talking with people who think differently than you? SERIOUSLY?
I do enjoy it. There are any number of things I could have done with my morning, I chose to focus my attentions on this discussion.
I didn't take the time, this time. I let your words to me stand on their own, and they weren't standing up very well. I repeatedly asked, and you didn't clarify some of the apparently very important nuances of your view point.
> Data does not predict anything.
That's ridiculous.
The entire history of science has been gathering data, and making predictions. The predictive power of science is ASTOUNDING. Even without a deeper understanding of the underlying mechanisms. Newton and Keppler invented formulas that fit the data they had at hand, and the predictions they made were uncanny, even though they didn't understand the actual forces that were creating those phenomena.
> How do you know this?
By answering the phone call when soup kitchens were desperate for donations, by helping my family when they were stocking, by volunteering my own time and money when I had the spare time and money, and by looking at the other people who were similarly stocking the shelves.
Sure, it's anecdotal.
> I do enjoy it.
If you enjoy it, then please refrain from the negative comments ("the very way you think about wealth is utterly silly"). I doubt they increase your enjoyment, and they negatively impacted mine.
I didn't take the time to elaborate on questions you asked that I felt like I'd already addressed elsewhere. If I had known you didn't bother to read them, I would have briefly restated them.
Oh well.
> The entire history of science has been gathering data, and making predictions.
You missed the hard part of actually testing those predictions. Data science does not bother testing, it just collects more and more data. Often the premises change right underneath, and data science just goes right on lamp posting.
An excellent blog to watch this in real time is Slate Star Codex. The author will make you reconsider everything you know about science if you listen to him long enough.
> by looking at the other people who were similarly stocking the shelves.
You just looked at them? You didn't get to know them? Appearances can be very deceiving, especially when it comes to public settings like that. I'm not saying you're wrong, but I've learned to not trust other people's perceptions if there's nothing more to go on.
It doesn't matter to me that it's anecdotal. I've learned that anecdote can be more trustworthy than 'scientific' analysis. But one needs to learn how to draw conclusions from anecdote and where the holes in the logic might be before relying on it.
The people at the soup kitchen may have been putting on their best faces to go out. Without knowing their stories you don't know why they're there.
I worked at the Atlanta Community Food Bank for a short time. I maybe was the only person on the team actually getting paid. I went in with one perception of the people that were working there, and left that place with a completely different perspective after talking to them and getting to know them.
> If you enjoy it, then please refrain from the negative comments ("the very way you think about wealth is utterly silly"). I doubt they increase your enjoyment, and they negatively impacted mine.
My suggestion to you, since you did say that you were here to perhaps learn from my experience, is to be a little more critical of your own understandings. It took me a long time to come to my current understanding of what wealth is, and I'm sure that understanding will evolve further as I delve more deeply into topics like economics and finance to flesh out what I feel is a strong historical understanding. I didn't gain that understanding by believing in myself, I did it by disbelieving in my own thoughts.
If someone told me that the way I think about X was silly, I'd immediately want to know why he felt that way. Hearing the rationale of people that have negative opinions of me is quite valuable to me. For someone whose been on BBSes for the last 20 years, I'd have thought you've have acquired the same thick skin that I have regarding intellectual discussions. I apologize for offending you, but as I don't think I did anything wrong, it's obviously a hollow apology.
No, I didn't. "Gathering data" includes "testing previous predictions."
> Data science does not bother testing, it just collects more and more data.
You just gave yourself permission to disregard any evidence I present. That level of arrogance should terrify you, once you realize you have that blind spot.
> The people at the soup kitchen
I said "stocking." As in, paying for the building, the lights, and the food.
> My suggestion to you, since you did say that you were here to perhaps learn from my experience, is to be a little more critical of your own understandings
My suggestion to you, is to not call people "silly" when they disagree with your understandings, and disregard any evidence they present.
> If someone told me that the way I think about X was silly
The way you think about the improvements in wealth in the United States in the last twenty years is silly. Specifically, how it impacts the lives of the poor. I'd be glad to continue providing evidence, but I'm not convinced you'll be bothered to investigate it.
> For someone whose been on BBSes for the last 20 years, I'd have thought you've have acquired the same thick skin that I have regarding intellectual discussions.
When I see someone ignoring data, not responding to specific requests for clarification, and throwing insults... I have way less tolerance for the insults.
Uber? Pay for a private chauffeur
Travel? Pay a top-tier travel agent
Technology has pushed more luxuries to the masses but rich in 1995 was still pretty awesome. Maybe if you'd said 50 years ago I'd be more in agreement.
Plus, there is the downside of technology. More distraction, easier for competitors know more about your business and thus catch up with you, easier for your employer to outsource your job overseas etc.
Since everybody else is commenting I'll join in too. :-)
Rich twenty years ago meant that instead of an iPhone, you had a secretary. Your TV was smaller. Your music was better. You talked to people in person. Oddly enough, the world at that time was a lot less crazy than it is today too.
Being poor in any era is in no way desirable compared to being rich in any era. A statement like that assumes poor means "I could probably live really cheap if I had to today" similar to tiny-housers.
The reality is closer to being uncertain of whether you will eat every day, where you will sleep and not to mention a feeling of hopelessness that can very easily come from feeling stuck in such a situation. When you're worried about having enough money to survive, things like getting a better education or job training go out the window.
Just by saying "I'd rather be poor..." you're getting the theoretical ability to CHOOSE it.
The disparity in income growth rates across households can be related in part to productivity. Changes in technology do not have an equal impact on all workers in the economy. Over the past 30 years, improvements in technology, such as computer innovations, have led to increases in labor productivity for workers with technical skills ... These high-skilled workers experienced greater increases in compensation than lower-skilled workers.
...
For a select group of “economic superstars,” technological innovations have expanded the size of audiences, leading to strong increases in income ... The rapidly growing demand for video games has resulted in similar income growth in a narrow segment of the software industry. In the late 1990s, creators of video game software experienced average annual income growth rates estimated to be 6 percentage points higher than workers creating non-entertainment software products, such as for computer databases.
https://www.kansascityfed.org/publicat/econrev/pdf/1q07will....
The whole paper is well worth perusing. You'll be surprised how much of the total income gain in the U.S. is attributable to movie stars and pro athletes, and that is nearly entirely (economically speaking) a result of their exceptional "productivity". That is, being one of only a thousand or so people capable of producing something people will collectively pay billions for.
20 years ago, if you were poor and unemployed, you went through the help-wanted ads in the newspaper. Today, you can look at those same ads on-line, or you can go to craigslist.
20 years ago, if you were poor and the cops beat you up, you whined about The Man to your buddies. Today, you hope one of your buddies got a video of it, and you post it online and bring down public outrage on the PD. (Whether the PD changes or not as a result, at least your voice can be really heard - to the point that sometimes the president starts putting pressure on the PD.)
I could go on. The point is something that PG has said: Technology is a multiplier. If you've got something you want to do, technology can make it take much less effort. But if you're hopeless and adrift, with nothing you're aiming for, all the technology can do is fill your time with fluff so that you don't feel so bad. That's not much of a win for those people.
Whatever the paper shows, I'm not sure you can draw this conclusion from it. The fact that systematic inequality takes some specific form and prefers some assets over others doesn't mean that it isn't a feature of capitalism, only that within capitalism, not all assets behave identically. I'm not sure why you would expect them to.
Seems legit.
>the financial sector
Seems legit.
>the pay of CEOs and other top executives
Seems legit.
>and protectionist measures that have boosted the pay of doctors
Wait a second...
https://3.bp.blogspot.com/_ZPUIbpPl1ME/SwLM3Q8Nl6I/AAAAAAAAA...
I looked in the paper and he doesn't seem to address this, he just complains that doctors earn more than in other rich countries. He also doesn't mention that doctors in the US have to pay enormous malpractice insurance premiums when comparing them.
So who is Dean Baker and why does he hate doctors?
The AMA is a highly self-interested organization.
The decline and extinction of self interested organisations that represent labor is pretty much the only reason why all wealth as accumulated with the 0.01%.
AMA is, like most other unions, apparently not doing a very good job of keeping doctors' incomes up. That apparently doesn't stop self interested economists going on an academia-themed anti-union rant.
Your promotion of this odd conspiracy about bourgeoisie capitalist economists being bought out by think tanks and promoting anti-labor, pro-capitalist propaganda is just completely baffling to me. You did the same in a previous thread about minimum wages and here again you insinuated in a different post about how Dean Baker's motivation for this paper (being an ACA supporter) must be conspiring to drive down wages of the medical profession to make ACA cheaper.
I just don't know how one can respond to you.
This economist literally works for a think tank and his paper is published on that think tank's website.
For it to be an actual conspiracy that he is bought out I think it would have to actually be hidden from view somehow.
I can only speculate as to his motivations behind attacking doctors in this paper, but there isn't a shadow of a doubt that he is attacking them.
You literally can't blame doctors' wages on the rise of income inequality if they've been falling. If the paper actually said that they were rising I could have understood but it doesn't. Dean Baker is just doing a rather pathetic exercise in misdirection by talking about wages in other countries and how doctor's wages haven't necessarily been falling as fast as everybody else's.
>I just don't know how one can respond to you.
Believe me, the feeling's mutual. Apparently some people are impressed by the thin veneer of academic pseudo-legitimacy that comes from putting a couple of equations in a PDF and turn off the critical thinking section in their skulls.
You weren't displaying critical thought, you were engaging in a trite dismissal and then extrapolating an outlandish motive.
I read the paper and researched its claims before attacking it.
Did you do that before accusing me of trite dismissal?
It was modern pharmaceuticals that professionalized doctors and hospitals. Previously, symptomatic mitigation and surgery were about the only options. Doctors were not high-status professionals, barely above blacksmiths. National healthcare was the sane response to this clusterfuck. But not in the US, because that would be socialism. So it goes.
This is a common misconception that keeps popping up again and again. Reposting a comment from just four days ago:
The AMA is a common scapegoat, except that the AMA has literally nothing to do with the number of of doctors supply-side.
You're probably thinking of the AAMC, which has nothing to do with the AMA, and is responsible for the number of medical students who graduate each year from the US. Except the AAMC has very deliberately and openly increased the number of medical student slots each year for over a decade, specifically with this goal in mind.
But even this is a moot point, because the number of people gradating with MDs is not the bottleneck - the problem is that doctors can't practice medicine until they complete a residency program. We graduate more medical students every year than we have residency slots available, so increasing the number of graduates even further will have no effect.
Increasing the number of residency slots is up to Medicare, because Medicare funds residency programs nationwide, as residency programs do not make enough money to sustain themselves otherwise.
And yes, the underlying technologies and skills required have gotten _a lot_ more advanced recently, but this all started happening before that.
http://www.numbeo.com/cost-of-living/compare_countries_resul...
Consumer Prices in India are 67.81% lower than in Sweden
Consumer Prices Including Rent in India are 69.48% lower than in Sweden
Rent Prices in India are 74.83% lower than in Sweden
Restaurant Prices in India are 80.16% lower than in Sweden
Groceries Prices in India are 63.10% lower than in Sweden
Local Purchasing Power in India is 31.34% lower than in Sweden
Even Americans have a hard road ahead when their only med school options lead them to the Caribbean. Even if they went to Ross.
http://www.healthcarefinancenews.com/news/physician-compensa...
Given the large fraction of physician income that goes toward medical malpractice in the US, as well as the higher overall wages in the US, the differential that protectionism needs to explain is nothing like the factor of 2 you suggest.
He estimated that for a simple referral or prescription he needed to produce at least 15 different forms or records and provide them to the insurer / medicare / pharmacy / etc, duplicate them in triplicate, back them up in filing cabinets that took up a quarter of his office, etc. Yes, his business was making probably 600k in revenue a year. And sometimes upwards of 550k of that would end up going to expenses - salaries, rent, certifications, licenses, bureaucratic bullshit, and a half dozen different kinds of insurance.
He is now working for a hospital as part of basically a medical monopoly ring in the state being paid much less than the OECD average but that isn't pleasant to hear that the inflated salaries vary greatly depending on location.
Hes 60 now. He paid off his student loan debt only five years ago, after working in a hospital for 5 and then his private practice for 20 years after graduating his MD.
It is insane, and hilarious, how people are misdirecting the obvious highway robbery of insurance companies, hospital executives, and investors in the industry on the backs of the doctors who are dedicating their lives to medicine.
http://www.jacksonhealthcare.com/media-room/news/md-salaries...
The Washington Post paints a very different picture regarding pay for doctors:
https://www.washingtonpost.com/business/salary-gaps-and-doct...
The US actually does subsidize the training of doctors, to the tune of tens of billions of dollars per year through Medicare alone.
That said, most people don't realize how heavy of a debt load doctors carry. Doctors reported incomes are much larger than their actual take-home pay due to things like malpractice insurance, which means that in the end, it's not unusual for a doctor these days to plan to make their last payment on these loans in their forties.
Put another way: most doctors are literally past what is thought of as childbearing age by the time their "investment" has broken even, and that's not even counting things like a mortgage, etc. that many people would want to have when starting a family.
To underscore this, take someone who goes straight through: finish undergrad at 22, med school at 26, internal medicine at 29, cardiology at 33. Again, no gap year, no research, certainly no PhD. At age 33, this person will have enough income to start making meaningful payments toward their debt, rather than just paying subsidized interest. It would be near-heroic to pay this off before 40 unless they were in private practice in the Midwest. And this is the best possible case: shortest training time, lucrative specialty, private practice.
In addition to all the debt you rack up, finishing your schooling in your 30s represents a huge opportunity cost - in the US a software developer with a BS has grossed something like a million dollars by then.
Rates are tough to find. I found a carrier in California that publishes their rate ranges, but California is one of the few states that has malpractice reform and damage caps. Their rates are considerably lower than in other areas. Physicians can safely carry $1million/$3million policies and be adequately protected, and as a result, premiums are much lower.
http://www.gallaghermalpractice.com/state-resources/californ...
By contrast, in Massachusetts, many HUGE verdicts have come out against physicians recently ($14 million against a radiologist in 2014), so now $3million/$5million is becoming the minimum, with physicians taking out ever larger policies in more litigious specialties.
To get down to brass tacks, the only physicians reliably making $500k annually are orthopedic surgeons these days. Their rates range from average $25,281, with minimum $10,995 and max $56,363. That's 5-10% of their pre-tax income just to practice medicine.
I know of obstetricians that had to sell their practices and join the local academic center because their individual malpractice premiums hit $120k a year.
The biggest problem that I can think off is med school tuition costs. The cheapest med school in the US costs over 30,000 per year, the median yearly tuition cost for US medical students is around 50,000 USD.
So that's 2-3 years of pre-med and 5 years of med school which can cost upwards of half a million dollars in the US.
When most doctors start their career with nearly 300,000 dollars in debt which they pay interest on you going to be damn sure they'll require a hefty sum to pay it back.
To put that in perspective if the doctor can pay out 25,000 per year on their student loans it would take them about 15 years to pay out their debt.
To put that in perspective 25,000$ is the average yearly salary in Spain.