Comment by malandrew | Hacker News Reader

Comment by malandrew | Hacker News Reader

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    We have control over how society's feedback mechanisms are structured

We do. However, that doesn't mean that tweaking knobs won't simply result in a pareto distribution with different winners and losers. At the end of the day, every individual has fitness along a variety of different vectors. You might achieve equality along one or two vectors by tweaking one knob, but then see side effects that result in pareto distributions along different vectors.

Income distribution is a textbook wicked problem: https://en.wikipedia.org/wiki/Wicked_problem

My view is that income equality is the wrong thing to optimize for. Instead, we should optimize for progress and productivity that increases the overall welfare of society fastest, even if some individuals do far better than others. Those individuals capable of contributing the most to meeting the needs and desires of the most individuals deserve the most resources to enable them. Those who have the least to contribute will benefit via surpluses created as a result of productivity gains.

> Those individuals capable of contributing the most to meeting the needs and desires of the most individuals deserve the most resources to enable them.

Deserve? Deserve? Seriously?

Do the top 25 hedge fund managers deserve more than all kindergarten teachers combine?

Does Bill Gates deserve $90 billion? But Albert Einstein deserves only $900K? Zuckerberg, inventor of Facebook, deserves $45 billion, but the Tim-Berners Lee, the inventor of the web, deserves some tiny faction of that?

The 80 richest billionaires deserves as much as the bottom 50% of the Earth's population?

A scrawny computer programmer makes ten times the farmhand. But suddenly the two are stranded on an island, where muscle and hunting skills are more important than computer skills. Does the farmhand suddenly become a more deserving person, deserving ten times the food?

> Do the top 25 hedge fund managers deserve more than all kindergarten teachers combine?

Survivor bias.

For the sake of proper comparison it should be all hedge fund managers combined vs all kindergarten teachers combined - a good portion of hedge fund managers never see any money (or, better yet, are main contributors to their fund and then promptly go into negative). Not saying that averages work out better for teachers, but a random teacher likely has a larger paycheck than a random fund manager.

Next up - does the guy who bought a $1 PowerBall ticket deserve 100% of the jackpot when there are honest hard-working people who bought five times as many tickets?

No. Don't change the question or introduce a red herring. Simply answer it: Do the top 25 hedge fund managers deserve more than all kindergarten teachers combine?

And to your "next up": No. Luck != deserve. That is essentially my point, and the implicit point of the OP. A primitive society leaves all to luck. An advanced, mature, fair society does its best to eliminate chance (e.g. insurance, the root meaning of which is precisely that). The lottery is a patently backward thing (the opposite of insurance) and I'm appalled that our state governments perpetrate and profit from such harmful and exploitative things.

prostoalex's point is that hedge fund management varies greatly in its pay, while kingergarten teaching does not. If you want to "play the lottery", do the former. If not, do the latter. It's a free society.

> Do the top 25 hedge fund managers deserve more than all kindergarten teachers combine?

These are hard questions to answer. Lot of people can become a kindergarten teacher but not a lot of people can become a successful hedge fund manager. So in the end the free market decides who deserves more.

Interesting. I've been hearing a lot about the "free market". Can you provide an example?

If you are a school and want to hire kindergarten teacher, you will put an ad and get lot of response, you may or may not want the best because you know that average teacher will be ok too. So you hire the average teacher with average salary.

If you are looking to invest your money with a hedge fund manager you want to go with the guy who has a great historical record but the hedge fund manager knows that too so he will charge a premium but you are ready to pay that premium because of his good historical record.

So the free market decides that average teachers are good enough and they will do the job with average salary. But in the world of hedge funds, average managers are not good enough, you want the best and you are ready to pay a premium to get the best manager.

> If you are a school and want to hire kindergarten teacher, you will put an ad and get lot of response

Given that there is a massive teacher shortage[1][2][3], and there is no shortage of aspiring hedge fund managers, can you come up with a model that reflects more accurately reality?

[1]: https://www.washingtonpost.com/local/education/america-has-a...

[2]:http://www.huffingtonpost.com/news/teacher-shortage/

[3]:https://edsource.org/2016/states-teacher-shortage-hitting-al...

I dont know why are you complicating this.

First of all the shortage is only some specific sectors like STEM or schools in poor areas.[1]

So the question you should ask is why is there a shortage in some areas, it's because teaches are not being paid well so the supply is dwindling. This is exactly how the free market works.

The next question you should ask is why did salaries for teachers kept going down.

There might not be a shortage aspiring hedge fund managers but there is shortage of fund managers which good historical track records so the good ones get lot of investment money.

[1]: https://www.brookings.edu/wp-content/uploads/2017/04/es_2017...

"...the free market decides that average teachers..."

What is free about the job market for educators? The political process which determines their compensation? The bureaucratic machine which continues to raise the bar (credentials)? The procurement process which diverts tax dollars into crony coffers? The mandatory unpaid overtime?

What, in your opinion, could teachers, or any individual teacher, do to earn a higher salary?

If the politicians set higher salaries for public school teachers it's going to come out taxpayers money.

Teachers can work in private schools or teach online or give private tutoring.

> Luck != deserve.

But in this example you're comparing high risk -> high reward vs low risk -> low reward and introducing survivor bias to boot. At some point the representatives of high risk -> high reward (a) decided that they want to pursue such careers and (b) managed to convince a bunch of moneyed individuals and institutions to entrust the money to them. The representatives of the low risk -> low reward group decided against such path.

Basically, to turn the question around, if things are so rainbows and sunshine in the hedge fund land, why don't more individuals make a career move from kindergarten teacher to a hedge fund manager? From your example seems like no-brainer decision, so you'd expect rational individuals to be jumping the ship en masse.

> An advanced, mature, fair society does its best to eliminate chance

Does it? So every restaurant, home-based artisan and photo sharing app entrepreneur has an implicit guarantee of success and nobody ever competes with or disrupts anybody else's business?

Those individuals capable of contributing the most to meeting the needs and desires of the most individuals deserve the most resources to enable them.

As measured by who, and how? This is standard economic orthodoxy but the fact that many important metrics like life expectancy are running counter to what you'd expect from looking at GDP etc. suggests that we have hit a local maximum and need to revise our models and methods.

This is not the best of all possible worlds, and reiterating the first principles that you believe in will not make it so, any more than praying for justice while carrying on in exactly the same way in all other respects.

Exactly. It's easy to make (a) some rich and some poor (capitalism) or (b) everyone poor (communism).

(c) making everyone rich is beyond the possibility curve. Equality hampers any progress that requires risk. E.g. Steve Jobs. He took crazy insane risks. But only because there were maybe crazy insane rewards on the other side.

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