How is it possible that we are completely and utterly optimistic about breaking all sorts of physical barriers, like landing on Mars, and reusing rockets, and communicating worldwide via little handheld microcomputers, and reattaching body-parts, and aiming to live forever, and do all sorts of crazy biological engineering.
And yet trying to imagine a world were you don't have billionaires having lavish parties while people starve or drone in soul-sucking jobs, or where sweatshops are deemed "bad but better than the alternative", or indeed any sort of radically different social arrangement is seen as hopelessly naive or regressive.
He had better examples, something about a dude with a bifurcated tongue. But the idea stuck with me- what's up with the bounds of our imagination? How come they're limitless when it comes to facing off against gravity, and completely defeatist when it comes to erasing class distinctions?
https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2014
I guess income inequality measures result in less favorable comparisons than basic measures of wages.
I'm skeptical that America has enough social cohesion for such a thing to be fully implemented here. Literacy and median wages are fine for the white majority, so we've got most of the trappings of a social democracy for white America. Why would Americans use the state to benefit all people when Americans aren't even willing to put agents of the state on trial when they kill unarmed black people?
Yes, minimum wage affects different races differently. But so does everything else. And one thing I'm pretty sure about : the rich are pushing down minimum wage for reasons that have nothing whatsoever to do with race. Even if the people involved are racists, it still would have little to do with why this is happening. So race is absolutely not relevant to this discussion.
The way this works is that money is being used to make a subgroup of our society desperate enough to do whatever a number of rich folks want them to do, no questions asked. Nobody really cares who's in this subgroup, as long as it's not them and they're sufficiently desperate.
So can we please shut up about whether the amount of melanin in the upper epidermis of some subgroup of the poor is small, medium or large and start talking about the economics at work here ?
If your solution to a problem requires unity, you probably need to find another solution. America is not united.
No it doesn't
https://en.wikipedia.org/wiki/List_of_OECD_countries_by_heal...
> 98% of the US has completed at least 5th grade.
There's a lot of illiteracy in the US.
https://en.wikipedia.org/wiki/Literacy_in_the_United_States
> The study, the most comprehensive study of literacy ever commissioned by the U.S. government, was released in April 2002 and reapplied in 2003 giving trend data. It involved lengthy interviews of over 90,700 adults statistically balanced[clarification needed] for age, gender, ethnicity, education level, and location (urban, suburban, or rural) in 12 states across the U.S. and was designed to represent the U.S. population as a whole. This government study showed that 21% to 23% of adult Americans were not "able to locate information in text", could not "make low-level inferences using printed materials", and were unable to "integrate easily identifiable pieces of information." Further, this study showed that 41% to 44% of U.S. adults in the lowest level on the literacy scale (literacy rate of 35 or below) were living in poverty.[2]
But most people seem to tend to think that communism requires some kind of pure altruism to work (and to be fair, there have been socialist and communists that also believed that), but a central aspect of Marxism is the opposite:
The working class must learn to value its own work and not buy into the subjective moralism of the capitalist classes (that tend to ascribe virtue to wealth: if you're rich, it is generally assumed to be an indicator you have worked hard, while poverty equally is suspect), but be willing to grab the proceeds of their labour. Marx spent a considerable amount of time ripping to shreds early "utopian socialism" (Fourier, Owens et. al) for failing to understand this amongst other failings.
The very insistence of revolution as the mechanism for social upheaval in Marxism is explicitly that Marx did not believe that the ruling classes would be willing to give up privileges willingly even in the face of election defeats, and so once a sufficient working class majority comes into being, sooner or later there would be conflict.
An egalitarian system according to Marx is a desirable, advanced stage of society, but it will come into being, he argues, not because it is the right thing, but because it is the only possible next step: the working classes can only overcome the power of the capitalist classes through sheer numbers, and can unite only because capitalism eventually creates a situation where carving up the pie equally becomes a net improvement for a rapidly growing majority: The rational choice for most of us to maximize our own wealth is an equal distribution the moment the majority of wealth is health by a minority of people, because most of us will otherwise be in the majority that receives less (and for this reason he was insistent that a socialist revolution would fail if attempted somewhere not advanced enough to allow redistribution to eradicate poverty - if it instead merely spread poverty out, class struggles would resume).
In my experience, that's only true in America.
People in Canada, Australia, England and Argentina and perfectly happy to discuss and debate ideas and ways to remove (or drastically reduce) class distinctions. Politicians even enact policy to do it.
I think the propaganda of "The Communists" has been drilled into the American public so solidly, it's not only un-American to suggest a change to the status quo, it's also considered utterly impossible.
Source? Also what do you mean richer than the UK?
As for erasing class distinctions, consider the possibility that we already have. Imagine telling a person in 1915 about the world today; the children of rich struggling hard in school with the goal of getting a job where they can work hard in order to provide consumption for the poor (who mostly don't work). These rich people will wear the same hoodies and turtlenecks as anyone else, live in moderately larger houses than the poor (or at least in moderately nicer locations), and have virtually no goods and services that are unavailable to the poor.
Would this modern world not count as wildly imaginative?
A poor person today is richer in many ways to the rich of 1915 thanks to technological advance, but there still is a huge gap between the opportunities of the poor today and those of the ultra rich.
More fundamentally I just don’t think it is good for the ultra rich to live a life that is so different to the rest of society. These people have an enormous amount of power and it is not good for the rest of us if they live a life detached from the worries and concerns of us common folk. You just can’t make good decisions on the basis of bad information and if this is formed from the worries and concerns of your ultra rich friends and you then you are going to end up with a warped perspective of what life for most people.
In regards concrete claims the ultra rich appear to far more to the economic right than the average person. I am sure you are aware of this.
Are you sure that's true? It may be, but there are certainly plenty of counter-examples. Gates and Buffett immediately come to mind, as well as presumably many of the people on this page: http://givingpledge.org/
If I were asked I would be keen to lower taxes on incomes and raise taxes on inheritances. We really don’t need a self-perpetuating parasitic overclass.
Is it therefore reasonable to say "I think the lives of people who read Scott Sumner's blog are fundamentally different to the average middle income person in the same way that royalty lives a different life to a commoner"? If not, why not?
The ultra rich live a life that is very different to the rest of us. This is an interesting article on their views [1].
1. http://articles.latimes.com/2013/mar/22/opinion/la-oe-page-w...
Why not? So Jay Leno has a 10,000 sqft garage and 500 cars, what do I care? Tom Cruise doesn't affect my daily life. Politicians do, and most of them are rich but not ultra rich.
People will always have a warped perspective of others, that's just how the human brain works. In fact we discuss that on HN frequently, how Silicon Valley can seem so clueless solving "white first-world problems".
The ultra rich have a very large influence over politicians. This is why they are important. If they just spent their time flying around in private jets and talking to each other then it wouldn't matter - once they start to have a very large influence over public policy it matters what they think.
Could you point me to the place in Picketty where he does more than speculate about how the wealthy gain more wealth?
These investments manipulates markets such as real estate to perpetually increase value of their investments without positive impact on society.
You seem to be confusing middle class NIMBYs (the main people manipulating real estate markets) with the very rich. Middle class homeowners are the ones preventing new construction, it's the wealthy developers who are trying (and failing) to be productive.
As they buy up premium estates in major cities around the world, supply gets constrained, more people gets priced out of home ownership and must agree to pay ever increasing rents to those investors.
You are deeply confused. Buying up housing does not reduce the supply of living space; similarly, a rich person investing in a copper mine does not reduce the supply of copper. If the rich person makes improvements (e.g., buying land and building flats on it, buying a copper mine and expanding it) then they increase the supply.
Again, where in Piketty's book do you believe he shows that the rich buy up and artificially limit the supply of a scarce resource? Please cite a page #.
As per Piketty's book, read this paper which has analysis on where major capital gains for rich come from: http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf.
The key distinction in this problem is between overcoming fixed barriers of nature and overcoming the dynamic, highly adaptable nature of human beings. Personally, I don't believe we're ever going to come up with a fixed set of laws that could constrain the infinite range of human behaviour to the realm of fairness and make cheating impossible. At least not without eliminating all freedom for everyone.
So any rents-ey looking use of the political process is not free market no matter the wealth of those practicing it. This is what need work.
Wal-Mart in specific originally hired women in rural areas at a wage appropriate as a second income. Their husbands worked at an industrial or agricultural job.
Then they went through an explosion, but as the South Park says, the soul of every Wal-Mart is a mirror. The ag. or industrial job isn't there any more but by sheer momentum, that's the deal.
Wal-Mart is also not exactly a sentence of eternal penury - people who stay a few years, just by self-selection can move up the food chain. I'm not current, but a department manager made enough to raise a family very frugally. A store manager made pretty decent money.
The reason it's Wal-Mart and not Sears is decades of hard work at the logistics end - Wards and Sears shipped by train, even in the '60s. Wal-Mart just overran them with trucks.
But in a way, what's waiting for the end of Wal-Mart seems worse - Amazon. The labor component of production of goods is still disappearing.
Professor Mark Blyth has a very good summary of this:
https://www.youtube.com/watch?v=hmWbkPezgtU
The problem for economics as it's become very mathematical
and technical is that the intrinsic beauty and rigor and appeal
of the models themselves have become an attractor - something
that research gravitates towards. [...] There is a great attraction
in these types of models; they create a world of equilibrium,
a world of stability almost by accident - they are just a consequence
of the model, and it's a beautiful and seductive world.Other things, however, are a lot closer to physics:
https://en.wikiversity.org/wiki/10_Principles_of_Economics
It's very important to understand when you're talking about the former and when you're talking about the latter.
Having a legal/police system to catch people who forcebly take property?
Using trade to exchange property?
This is the core of our system. And that system will always generate inequality.
Not necessarily a bad thing.
You can have laws to take the edge off inequality generated, but at the core of the system you can't really avoid it.
That we are debating the goodness of property rights in this day is a mystery to me.
Not the OP, but I think a lot more people nowadays should read (or re-read) Locke's "Two Treatises of Government". That book is famous mostly for the second part, where Locke actually intellectually imposes private property as a thing in the Western world, but I found the first part equally interesting, where Locke fights against a guy called Filmer, who was of the opinion (prevalent until then) that all property was rightfully owned by the King, transferred to him from generations past since Adam.
The thing I'm trying to say is that yes, private property is just a social construct, there's no divine nor moral thing about it, the concept came alive (so to speak) only because some guys in England didn't like that their possessions were in danger of being confiscated by the King's men.
In the end private property is indeed theft, more exactly the imposition of someone's moral values over the other's by intrinsic force (if you "steal" you might go to prison or worst). The sooner we realize this the better, there's no second-guessing about it.
Private property can't be "theft" if there is no private property.
If you don't believe in private property, you're sort of poisoning the well of any economic conversation, since it's the foundation of basically all of peaceful civilization.
Without private property there is only tribalism and, "might makes right."
http://io9.gizmodo.com/5872764/the-greatest-mystery-of-the-i...
That being said, many things are possible in groups with smaller populations, I've heard stories of large communes being fairly successful with up to several thousand people. However, at some point they tend to become too disorganized and break down, in one way or another.
In contrast, the concepts of private property and trade have enabled our human family to grow to 7 Billion, and population growth is barely even slowing down yet. Civilization allows things to work on an entirely different scale by providing a somewhat standardized framework for our territorial disputes.
This is also the most non-violent time in history by far, according to researchers, presumably due to the end of tribalism.
So, for me personally, there would have to be extremely compelling arguments to even begin to argue against the utility of private property as a social and economic system.
I'm curious how that follows? Many actions require force but are not theft (depriving someone of rightful resources). If your 'moral' values deprive someone of their own rightful resources you probably deserve to have some intrinsic force applied. In that way private property would seem to me to be close to a moral good.
Which, I think, is the central issue regarding property rights and inequality. We should question all rent generating property rights, just as Locke did, and try to find a system of propert rights where rent doesn't create inequality.
Taxation seems to be he popular approach, but why not try to redefine the rights all together? What if such property rights were time limited, and came with a fee equal to the rent potential?
I agree with your stance on component 1. The raw materials, the land, they do in fact manifestly belong to everyone.
On component 2, the labor or improvements, I don't think those do belong to everyone. They belong exclusively to the creator who can transfer title. In fact, society has no moral claim on this component at all in my estimation.
Here is my idea. Stop funding society by taxing labor. It's counterproductive. It's morally wrong. Tax material and land use. This is what society truly has a claim on and how society should fund itself.
What you're pointing out is a monopoly called "The Legal System": a single dispute resolution system everyone must adhere to without choice (Government/Mafia). This monopoly is often based on geolocation. Property will be inherently aggressive if one is forced to use a specific dispute resolution system.
Everyone withholds stuff from others: it is 100% universal. In this way, the notion of "property is theft" can not hold because everyone (even animals) do it: consciously or subconsciously.
There is then the system of dispute resolution. This defines if a particular act of withholding was an act of "theft".
The combination of withholding + dispute resolution results in what we call property.
Competing dispute resolution systems is really that free-market people hope for. Dispute resolution systems do not have to be based on geolocation. In fact, people form millions of these unique systems every day, freely, without resorting to monopolies or the lowest of low dispute resolution: killing one another.
> The sooner we realize this the better, there's no second-guessing about it.
So ya. Property in and of itself is not theft. Forcing others to use a specific dispute resolution could be viewed as the theft.
That individuals believe government should be directed at investors who risk their property to create wealth in order to take by force that property to redistribute it is perhaps the most offensive sentiment.
> There is no reason why the bulk of the billions taken-in by WalMart should go to the Walton family while their employees live on food-stamps - that is just a legal arrangement. And there is no reason why the Walton family should continue to be allowed to use offshore corporations to loan themselves money to run all their WalMart stores - that is just a legal arrangement which allows them to avoid taxes and hide their billions offshore
No one is arguing the value of the social safety net. The comment goes above and beyond the safety net suggesting it shouldn't be needed and the remedy is redistribution. A safety net is one thing but arbitrarily inflating wages is another.
I don't believe the suggested remedy would be proposed by someone who believes in property rights. Further, as a person who believes in property rights I do find the sentiment of theft of property for redistribution offensive.
(The concept didn't work out so well for Marie Antoinette)
If a revolution comes and you find yourself thrown up against a wall somewhere, remember your comment this evening.
Truly terrifying.
If a violent revolution comes, I'd be thinking more about those pervasive comments touting a belief that theft of private property is somehow justified. I'd suspect those making such comments would be a little more regretful to see their rhetoric fulfilled.
The disconnect here is that property rights are "more guidelines than actual rules", they are quite literally "made up". It used to be that keeping a black person out of your store was a "property right", until we decided it wasn't, and then we got rid of that one. It used to be that preventing airplanes from flying over your farm was a "property right" until it wasn't, and then we got rid of that one. You can only do that if "property rights" are artificial.
I mean just look around you. We live in a world where Smartflash has a "property right" to your in-app purchases, Apple has a "property right" to your iPad, JSTOR has a "property right" to publicly-funded research, etc. etc. That's because we made it that way; let's unmake it, and do it differently!
To a first approximation every single person on the planet had far less in the 1950s/1960s.
"Equality" sucks if it means that everyone is equally impoverished.
It seems like we probably benefit from an arrangement where we control the things in our immediate surroundings that we need in order to maintain reasonably stable and predictable lives. For instance it makes sense for me to control access to things like my glasses, bike, pajamas, etc. Property rights work pretty well for defining that arrangement.
At the other extreme, we have situations where property rights can be overridden, such as taxation and eminent domain, and entities whose value depends on a stable money system provided by the government -- I see no a priori reason why the workable way to manage those things is not through a system of limited property rights. In broad terms, one such limitation is an agreement that taxation is not a violation of a fundamental human right.
The more abstract and artificial "property" gets, the more reasonable that property rights are balanced against other things, such as redistribution.
This is the core of our system. And that system will always generate inequality.
Sure, and to the extent that it works, it's OK. When it doesn't work, then it seems reasonable to manage it in order to make it work better. Some broad-brush ideas are for the government to provide a functioning money system, and a way to redistribute wealth against the tide of inequality.
As a useful legal fiction subject to the same limitations as others of its genus, sure.
As a natural moral right? Not in the slightest, because there ain't no such thing. The history of "ownership" of any given thing today is basically a history of force, fraud and the occasional lucky break. Who should own a piece of land? What moral claim do they have to it? The very best that can be said today is that they can trace a chain of transfers back to the person who most recently was able to stay on that land without being forcibly put underneath it by someone else. What kind of grounding for a supposed moral good is that?
So I believe in Thomas Hobbes' conception of the state of nature -- namely, that there are no rights, no virtues, no morals, nothing but all-out war for resources, where what is "yours" is what you can take and keep by violence -- and in his conception of government as what we introduce when we get tired of that, and that this arrangement is better than the "war of all against all" even though it comes at the expense of sometimes having the government decide that "my" property could be put to a better use.
Now, do you want to try engaging with the actual argument (property is a useful legal fiction, not an inherent moral right)?
If you accept his arguments, you're basically advocating a dictatorship (or his era's equivalent, a king ruling by "divine right").
For another, his notion that humans are motivated purely by ego and self-aggrandizement is demonstrably wrong.
Posit a "desert island" scenario in which an adult is marooned with a small child. Assume that rescue is impossible (or at least wildly unlikely). No legal repercussions to worry about.
The child has collected some fruit, clams, or whatnot.
The adult is hungry.
In this situation, a Hobbes person would simply take the food from the child.
While there certainly are some real people who would do that, most of us would not. They would prefer to collect their own fruit and clams rather than take them from the child by force.
Even if there weren't enough food to go around, many would give the food to the child and choose to go without themselves.
As with many political theories, the Hobbes model says rather more about its originator than it does about people in general.
Many of these philosophers, including John Locke (who Jefferson cribbed heavily from when writing the US Declaration of Independence), wrote as if the morals of Enlightenment-era westerners would magically naturally exist in people living in such a "state of nature", and simply took them for granted.
Hobbes pointed out that this was balderdash. Our entire conception of propriety, of right and wrong, of what is or isn't acceptable, comes not from some natural moral law engraved into our hearts or deduced in an ideal pre-society state of pure reason, but rather is inculcated into us by the culture in which we live. So Hobbes dismissed the idea that people would be respectful and helpful in the "state of nature" and pointed out that, since that stuff only comes into being later with organized society, none of it would exist at that point. Hence the war of all against all.
Which is where your desert-island analogy, and most other attempts to tear down Hobbes' state of nature, fall apart: your stranded people come in with experience of an organized culture which taught a particular set of morals and norms. One of those norms is that the adult should go hungry to let the child eat, but there is no guarantee that some natural moral law written in the adult's heart would have produced the same outcome absent years of indoctrination in a particular culture's moral system (and in fact, in actual nature we can find examples of animal species where adults will kill and even eat young of their own species).
The first two are complicated, because they are extremely political. To own geographic space is entirely divisive from owning just the dirt under a house, or the physical material that composes it. To own an idea, a trademark or a patent, is to assign exclusivity to thoughts. Its much easier to say "we have scarce goods, so those that create them can sell them, and the buyer owns it". Its why I think goods property is a good thing, but our attempts to strong arm real estate and IP into the same formula is a cause of constant economic tension because they aren't a good fit.
Just in this context for reference, I'm an IP abolitionist and think we should adopt homesteading of property again. Both forms of state granted monopoly to space and idea are being rampantly exploited by market forces and were conceived of in an age when technology did not enable the information exchange we have today. It would have been much more complicated to verify usage of a plot of land a hundred years ago than it would now, to know who previously owned it and for how long it has been unused before you could claim it as your own.
You can tweak the rules, but you can't run calculations that predict the results. Some of those legal arrangements might be unjust, but their results might be net-good all the same. We can, and should, keep evolving the social bargain, but upending it completely is very dangerous.
People can attempt to ignore the fact that economics is a special application of physics, but they can't escape the consequences of ignoring reality forever. The belief that it's all just conventions and cultural agreements is exactly like believing that the Moon is just a bedtime story.
Nope. Moving 200 million in rock or 200 million in a paper check (or even a promise-based conversation). The extractable amount/usage of Labor and Resources outstrip the human ability to account for it. This has less to do with physics and more to do with "accounting". Without accounting you cannot have negative wealth, for example. This is not tied to physics. This is based on social contracts...all the way down to the currency.
I am a little interested in this physics-based economy you speak of.
Edit: Not sure why I was downvoted. But I was in the room as we reassigned profits to offshore entities for accounting purposes. And I was in meetings with our senior executives who were arranging to pay themselves in undervalued offshore stocks "off the books". Those offshores provided inflated services and inflated goods to the corporation and avoided taxation while making the executives rich. The value of those offshore stocks was "reinflated" with a phone call. And that is just one company - the Big 3 accounting firms provide these services routinely for both the corporation and its executives. (And when we reassigned profits that had the effect of lowering profits - and even making income disappear. I've seen these techniques used at more than one company.)
Off shoring subsidiary profit shaving is a fairly common practice for IRS accounting. But all the profit stays on the corporate parents books in one way or another (they own the subsidiary). The point isn't to make the executives rich, but to make the shareholders richer by avoiding taxes.
Paying people in undervalued stock is common, but "off the books" sounds illegal. I don't know what that means.
Also most companies would never sell shares of it's subsidiaries. They like having total control of the subsidiary.
Big 4 firms wouldn't fuck over shareholders to get executives rich. Executives are small fish compared to the sorts of institutional investors who own F50 companies.
It's the Big 4 instead of the Big 5 because Arther Anderson got caught cooking Enron's books. It destroyed the firm. They aren't going to risk their entire business for some Walmart execs worth a couple million dollars.
F50 executives aren't the people who actually own the world. They are people who work for the people who own the world. If the executives are stealing, it's not something that is accepted. If found they'd be totally fucked.
That's a distinction without a difference, since most of those executives' compensation comes through stocks.
That company is scum.
[1] http://www.forbes.com/sites/clareoconnor/2014/04/15/report-w... [2] http://www.cnbc.com/2014/11/20/wal-mart-defends-employee-foo...
In §13 he says (and I'm going to quote the thing in full),
<blockquote>I shall now advance a thesis which I am sure many will find controversial but which I think is true and, moreover, crucial for understanding the methodological status of the humanities and the relation of the humanities to the sciences of nature. The thesis goes as follows: Just as natural, i.e. non-intentional phenomena are 'governed' by natural laws, i.e. principles which tell us either what will invariably or in statistical average be the case under in principle recurrent and repeatable circumstances, in an analogous manner intentional phenomena are 'governed' by normative rules which tell us what people under given circumstances are (or were) expected or allowed or practically necessitated to do. I am, in other words, pleading for what might be called a 'methodological parallelism' between natural laws on the one hand and laws and other societal rules on the other hand. I am inviting you to see the difference between the humanities and the natural sciences in the light of the difference between the factual and the normative, between rules which state how things in fact go and rules which ordain how they should go according to the conceptions of those who instituted the rules.</blockquote>
Make of that what you will :)
When a convicted felon can do that, the argument that we don't live in a Free Market doesn't hold any weight, imho. A person can find a need, build a business around it, and become powerful and have money.