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Comment by zupatol | Hacker News Reader

The market is created by laws, laws are created by politicians, politicians are elected. That's how a democracy should work, anyway.

City planning is something complicated where I'm not so sure a pure market-driven solution would be optimal. Markets only allocate resources well when there are no externalities. They do nothing towards a fair distribution of wealth. A good example of poor city planning caused by the market is the housing bubble.

I don't know the situation in New York, but if hotels were in fact crowding out the poor from the city, it would be perfectly legitimate to ask if this is desirable.

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>> The market is created by laws

I always thought that the market was created by two people engaging in a voluntary exchange of goods and services.

I'm not 100% sure about the "laws are created by politicians" bit, either, seeing as most politicians scarcely even read most legislation, much less understand it. Although I suppose you did qualify that as the way things should work.

Markets can't work without property rights. If people agree on property rights, they have implicitly created a law.

I think it would be more accurate to say the market is regulated by laws.

"laws are created by politicians" probably differs between countries. I wonder which is worse, politicians that don't really care about what they sign or politicians that do care. An incompetent politician that do care is a frightening combination.

> They do nothing towards a fair distribution of wealth.

What is the "fair distribution of wealth"? I personally believe that you are only entitled to the wealth you yourself created (or which someone voluntary gave you).

Isn't that a fair distribution of wealth? Or what other metrics do you use?

Starting with the land, water, and air of this Earth, there are many resources that no one created, and no one has the right to give you. We parcel it out, and we say that this patch belongs to me, and this patch belongs to you, but the 'fairness' of it is always imperfect.

In a city, you cannot say that you have sole right to a piece of property, to do with as you please. Everything's too packed in together. If you're blasting music at all hours of the night, that alters the composition of the air around you. That may increase or decrease wealth, depending.

To put it simply: the wealth of New York City was mostly created by the city; the plumbing, the roads, the zoning laws, the building codes, the fire departments. The city government is the only entity that can really claim to have created that wealth. An individual building owner's contribution is very small.

> Starting with the land, water, and air of this Earth, there are many resources that no one created, and no one has the right to give you.

If we divide all the land in the world equally, within 20 years some people will have more and some people will have less (due to differing productivity and non-coercive selling). This isn't unfair - it just means that some people are unproductive.

> In a city, you cannot say that you have sole right to a piece of property, to do with as you please. Everything's too packed in together. If you're blasting music at all hours of the night,

Yes you can. Blasting music is a different story - you are effecting your neighbour's quality of life (and destroying his property value).

But trust me, you can do anything on your property as long as the neighbour doesn't hear or see you.

> To put it simply: the wealth of New York City was mostly created by the city; the plumbing, the roads, the zoning laws, the building codes,

The wealth in New York city is created because highly skilled people are close to each other (a type of network effect). Just because the demand for property is higher (and therefore the asking price) doesn't mean that the wealth represented by the property is created by the state.

>This isn't unfair - it just means that some people are unproductive.

Sure, but in another 50 years many of their children will have just as much land through none of their own doing. If others could have used the land better, I'd say there's a good deal of unfairness there. It's possible life could have been better for everyone if not for inheritance.

>Blasting music is a different story - you are effecting your neighbour's quality of life (and destroying his property value).

Eh? That's the sort of thing I was talking about. You have the right to do what you want, within reason. But that said, you can't for example use residential land for a commercial enterprise beyond a certain point, and there are good reasons for these sorts of zoning laws.

On your last point, the state is the proxy by which we as a group determine how to divvy up that wealth that cannot be directly attributable to any one group. Again it is imperfect, but it's better than letting those who own the land have the entire say, because they are not necessarily responsible for the value in that land.

> Sure, but in another 50 years many of their children will have just as much land through none of their own doing.

Can't people give their wealth to whomever they want (while they are alive or dead)? In a system such as yours (where the state comes and takes all property like a vulture after someone dies) it means that every old person should spend all his money before he dies. He should also stop working (as many old people (at least in my country) spend their lives working for an inheritance for their children).

I guess such a thing such as working to provide for your children and grandchildren is wrong in your books.

Here is another example in my country: many farmers have children and teach their children farming. This is the only skill that some of them can transfer. The children works on his father's farm. If there are two sons the father will try and buy extra land. The children inherit and divide up the farm after the father’s death. You thus get people living generations on the same farm.

In your ideal communist system, the child will lose his home, his father and his job (through the sin of inheritance).

> It's possible life could have been better for everyone if not for inheritance.

If all wealth is divided up after inheritance, the best (evolutionary speaking) strategy would be to have as many children as possible. That way, your offspring can have a larger share of someone else’s inheritance.

The idea of the far left, of trying to steal someone’s property after he dies is pretty reprehensible for me. What is worse is their motivation for it. The idea that an individual’s rights (and property) are subservient to the majority. What you are basically saying is that if something is good for the majority, the minority or individual does not have rights.

The ideal of the far right, however, is that if you're born poor, you're screwed. You have no right or reason to expect any help at all.

Neither extreme sounds terribly pleasant.

One example might be parks. Do you feel entitled to use Central Park, even though you didn't create it?

Whoever planned that part of NYC did a pretty good job of fair distribution, I think. Some for everyone to enjoy, some taxes taken for upkeep, everyone's a winner.

I don't think the market would do a good job of allocating that resource.

If only the world were as simple as that. Location and family play a huge role in whether you can create (as much) wealth.

Maybe. But here is the thing – do you think it is fair for someone else to subsidize your children (at the cost to themselves)?

It is usually the duty of parents to raise their children (and pay for their education). The left however feels that it “takes the village to raise the child” (nice way of saying that someone else should pay for education, etc…). This means that dysfunctional people and families can externalise the consequences of their actions.

If we think of it in a crude way: wouldn’t the most fit evolutionary strategy in such a system be to just get as much children as you want? Since someone else will bust their but to pay for the raising and education of your child.

This is unfortunately what happens in many countries, and it is quite sad. In my country there are 13.4 million people on government grants and there are 12 million people working. Of those that work, only about 3 million pay tax (75% which is paid by 750,000). Of the 13.4 million receiving “social grants”, about 9 million are child grants (government pays them for each child under 16, thereby encouraging people to get children. Many people receive the child grant from their children before they stop getting their own grant).

The point of this is that each tax payer is paying to raise 3 children that are not theirs. Is that fair? Should someone really be allowed to get children if they cannot afford them?

This is also one of the reasons I believe that democracy does not work in most countries – especially countries with a high population or which is not homogeneous.

The excuse of “family location” is BS. Many people have put off or postponed having children until they can afford them, and at least kept the number of children to a minimum. Many people also at least put in the effort to raise the kids that they have properly.

You know, there are actual statistics that show that children from less wealthy families do worse. It's no BS, that’s just how it is.

"Should someone really be allowed to get children if they cannot afford them?"

Probably not, but there's the rub. How do we prevent this? Perhaps if we refuse to bail them out... but are you willing to watch a child starve to death? Will you be the one to pull the plug?

The first thing would be to refuse child grants so to prevent adults from getting children, in order to get welfare. Awarding people for getting children is wrong and stupid.

The second thing is to force mothers to reveal the father of their children. Many do not inform the state who the father is, therefore forcing the taxpayer to pay for raising the child instead of the father.

And probably the best option would be to implement policies similar to China’s one child policy. A good example would be forced sterilization after 3 children if the person receives any form government welfare (or already have kids and is imprisoned).

But in any case, well before this point, the state can spent money on voluntary sterilisation campaigns (i.e. paying the poor and drug addicts to be sterilised).

Why is it suddenly fair for the government to make such extreme intrusions (forced to reveal information, sterilization) when before it wasn’t (taking aways money).

Because the nature of economy changed. In the old times, any able bodied person could do manual labour. Now manual labour isn't needed that much (industrialisation, etc...).

Another reason is longer life expectancy and subsidized health care. In the old days, a person inclined to irresponsible reproduction will not live that much longer than a person without. Now there are many countries with an average fertility rate well over 6.

Another reason is that it reproductive responsibility has been shown to work. Compare China to every 3rd world country (e.g. 50 African countries and India). Their one child policy not only stopped untold misery, but created the bedrock for future prosperity.

Tell that to 300,000+ USD Millionaires in mainland china ( I am sure its fare greater now as this is an article from 2006 ) http://www.businessweek.com/magazine/content/06_06/b3970072....

I come from a lower-middle class background ( military family during the 80's and early 90's ), grew up in many different small cities and never finished high school. I am in my mid 20's now and have the wealth that people here like to refer to as 'FU Money'

Germany has about 800,000 USD millionaires (also numbers from 2006) and a population that’s about 16 times smaller than China’s. Do you really think that that difference has nothing to do with location and history?

I was talking from a theoretic point of view. In standard economic theory an outcome is considered good if it makes all participants better off. Economists consider that people can agree on this.

Economists don't even try to answer the question of which distribution of wealth is fair. That's why mainstream economic theory does not concern itself with this question. All the economists say is that everybody should be richer if markets work well, they have no opinion about how rich the rich should be.

However the distribution of wealth is a very relevant question to a great number of people. If a majority thinks the outcome of the market is not satisfactory, they can correct it with politics.

Sure, this is how democracy always worked. I don't know about you but I hate it when a politician forces me to live, eat and work the way he wants, not the way I want.

I don't believe your example is a good one, because the housing bubble was not caused by the market. It was caused by irrational expansion of credit. Of course the market is the expression of what people want, but those "wants" are heavily distorted or encouraged by monetary policy. There is no market in the money making business (it's a government controlled monopoly).

For some reason your comment on city planning being complicated reminds me of http://en.wikipedia.org/wiki/Kowloon_Walled_City

That's how a democracy should work, anyway.

That's how a representative democracy works, but that's only one form of democracy (and unfortunately ours).

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