Paul Graham is wrong about inequality
vox.com
vox.com
401(k)'s are a great example of shifting wealth to the wealthy. SS was used to fund general government spending, but nobody got directly rich from it. With 401(k)'s the financial sector can skim a vast pool of money from the middle class with a huge range of hidden fees. Toss in a 10% fee for pulling money out in an emergency and it's surprisingly bad for younger workers vs simply investing money and paying the trivial cap gains taxes.
On top of that it inserted 100's of billions of dumb money into the market which creates tones of opportunity's to make money using HFT etc.
i.e.
> Some of that is certainly Silicon Valley executives. But it's the financial professionals that this conversation is really about. ... The inequality debate is driven by the belief that those kinds of abuses are disparate and widespread.
But I don't think most people understand "Occupy Wall Street" as being distinguishable from the Google protests, as Ezra suggests. Most people aren't highly specific about the difference between Uber's valuation and Subprime Mortgage Lending (including the media).
1) In the entire long-winded complaint, there isn't even a mention of the primary thrust of PG's essay—while some income inequality is caused by rent-seeking and bad behavior, some is also caused by productivity inequality. Productivity is more unevenly distributed than ever, and the trend will likely become more extreme as technology advances.
2) Intentionally confusing the definitions of "start-up" and "small business". Despite having acknowledged the that the meaning of the term was an issue, he still plowed forward and sited "start-up" statistics that were counting all businesses, primarily small businesses.
We can't have a society for very long where a few unicorn software and robot companies run everything with AI and bots, and most people displaced. It's not good for everyone, not even the hyper rich owners of those unicorns.
There's a certain amount of wealth and income where the marginal utility of more comes with a global detriment to everyone, even you.
Since market demand is created by people wanting things, it's overwhelmingly unlikely that productivity increases "will put most humans out of work". If they keep doing the same labor, then yes it will be devalued, just as chopping down trees or sewing is valued less in first world economies in 2015 than it was in 1815.
In your hypothetical example where software and robot companies run everything with AI there would be richer people than ever before, but poverty would also be nearly eliminated. Is that worse than a poorer but more equal world? If so, how?
To the extend it can be measured, the metric that matters isn't the number of startups ("employer enterprise birth rate" in the Sweden link). It's the net value generated by them.
Second: "Would anyone choose the second world?"
Yes, startup founders would. Because they can fix poverty with the value their startup generated.
Is there a lack of poverty in SF?