82% of Wealth Created in 2017 Went to the top 1%, says Oxfam
vanguardngr.com
vanguardngr.com
Using the commonly accepted safe withdraw rate of 4%, if you inherit $3 million (which is not even that much), you can safely collect $120,000 of capital gains/dividend income every year without doing anything. This also frees you up to work on other things that will acquire you even more wealth. People whose parents didn't leave them a large inheritance have to rely on salary, which is taxed at a higher rate and more difficult to earn.
In effect, late stage capitalism becomes the anti-thesis of the spirit of capitalism - devoid of competition, free innovation, and upward mobility. In an ideal capitalism society, the most talented should earn the most, but the compounding effect of capital makes it so that whoever holds wealth the longest earns the most.
Mostly because of how succinct it is. How can anyone argue with this? This is the central problem, in three paragraphs.
The only people who could argue "Well, but it's fair because..." are those who benefit from the status quo. But my mind is open to being persuaded otherwise.
What can be done? Throughout history, revolution seems to be the only way to shake up the system, and those don't even work. (It worked for the US because an ocean separated it from its enemies.)
And once the revolution settles, the system simply converges back on capitalism, e.g. China.
Or Russia's feudal "maybe you can make a business, but if it becomes successful, the government will take it" model. (Also China.)
I think the uncomfortable truth is that life just sucks, and the big will hold down the small and fuck them for eternity. I don't like phrasing it like that, but if it's the truth then we should face it.
EDIT: Damn, this thread was marked as a dupe, so there's no chance of discussing this here. But we should revisit this topic by pointing out this exact comment next thread.
It's only a problem if society as a whole decides that this is not the way they want to do things.
> The only people who could argue "Well, but it's fair because..." are those who benefit from the status quo. But my mind is open to being persuaded otherwise.
Hmmm. I disagree, but I must acknowledge that I definitely benefit from the status quo. I would not consider myself nor my family "wealthy" relative to the rest of the US, but relative to the rest of the world, absolutely. My parents in particular have made an enormous increase in their relative economic position over their lifetimes.
As for "fair"... well, I think that's a term that is both very significant for most people and whose definition differs from person to person. Fair, to me, means that individuals are not subject to the forceful interference of third parties. If fair to someone else means that force should be used to lessen wealth inequality then those concepts are mutually incompatible and both goals cannot be pursued simultaneously.
> And once the revolution settles, the system simply converges back on capitalism, e.g. China.
It is my belief that this is part of the inherent nature of things. Societies tend toward greater liberty, while government tend toward greater power. These forces reach are both balanced and opposed, and where they find equilibrium depends on the value system of the governed. Further, I believe that as a species we are trending toward greater individual power. To borrow a quote from Martin Luther King, Jr. (who in turn borrowed it from Theodore Parker): the arc of the human society is long, but it bends toward free-market Capitalism.
> I think the uncomfortable truth is that life just sucks
Now this, we can agree on :)
> and the big will hold down the small and fuck them for eternity. I don't like phrasing it like that, but if it's the truth then we should face it.
My views on economics are always implicitly suffixed with "... but this cannot happen in my lifetime, so we have to work with what we have." That said, while I have no illusions that I'll see the end of forceful government, I'm confident that my descendants will. I see it as my duty to do what I can to move society in that direction, just as I see it as my duty to impart my value on my own children and to provide for their future in the best ways I know how.
One of the benefits of an inheritance tax is that it can help prevent this.
From the perspective of an anarcho-capitalist, this does not describe the "fitness function" of Capitalism. Capitalism optimizes for the best management of capital, not for talent or productivity.
To reduce this to a fundamental level, if two entities - A and B - comprise the entire global economy, and entity "B" consistently achieves a greater increase in capital for a given unit of time, B's share of global capital will approach 100% as time approaches infinity. This is true regardless of disparity in starting capital.
In practice, it's not at all surprising that a small number of people end up controlling a large majority of wealth - in fact, if this were not the case, I would strongly suspect a forceful market distortion existed. This is not a bug. It's a feature.
That said, in practice, entities do not consistently achieve the same ROI over time. Families acquire wealth, companies form and are dissolved, fortunes are made and lost. There is a balance point that is reached where there are a relative few rich and powerful peoples/companies/families, and members of this group come and go even within a single generation
It's worth noting that in order to be in the global top 1% you need an income of $32,000
But then again the top few people who have a lot will earn so much more that they can barely even get rid of their fortunes. And that $32,000 isn't even enough in certain area's to have a house to live in and food security...
We have a 40-60 year gap in our collective memories of the discourse, in part due to the scare of communism, massive resets of industries/markets from war (meaning market growth opportunities where everyone involved can benefit from the lowest to the highest), and globalization keeping those opportunities alive without squeezing the labor class in the US.
The simple fact is that mature industries don't have room for paying average joes more than what they get paid right now, and average joes can't really do anything about it.
It's similar to scientific discovery, where the main bulk of low hanging fruit has been picked and only the smartest people tackle the most esoteric challenges - mature industries are optimized to hell and only the strong players can make any gains in them.
There just aren't many non-mature markets anymore.
I don't personally have any less wealth than I would have if those meanies hadn't made their money. It's kinda cool, in my mind, that crazy rich people exist, since that means that being crazy rich is the sort of thing that can happen to people. I'm people, so if I work at it, maybe I'll be one of those terrible folk one o' these days, with too much of the pie.
But nobody else seems to think that way. We just keep getting this same article written about how there's only so much wealth to be had, and this little group keep taking it all.
― Ronald Wright
As to being one of those folk: no. It’s a closed club, members only. Every newly minted billionaire you see made it there not through hard work, but connections - if you can point me at anyone who, in the last decade, has become a billionaire without an “in”, i’ll be happy to tell you where their “in” was. These are dynasties - nepotistic, closed circle, dynasties.
As for you, unless you are already a billionaire, you will never be one. Sorry. It’s like a peasant farmer thinking one day maybe he’ll be duke, even though it’s a hereditary position, so the beatings are worth tolerating.
I had no connections, unless you count posting to this forum and the old Business Of Software one at joelonsoftware.com. I just read stuff online, taught myself the business part, and spent the seven dollars on the domain name.
I feel like the bit you wrote is what people tell themselves so that they can safely not try. It's not possible. Best not bother.
I'd recommend otherwise, personally.
I don't think any of those had particularly wealthy head starts.
For a more recent example look at Jan Koum and Brian Acton.
I thought this comic was a neat satire by illustrating an extreme case: https://www.thenation.com/article/one-rich-guy-who-owns-ever...
I got a little windfall that I didn't want this year, and would much prefer to have had the same amount added to my tax bill so that people who could actually appreciate a few thousand extra dollars got it instead.
But that doesn't have anything to do with this article, with its silly pie fallacy emotional appeal.
Make no mistake, the world is bought by the rich, directly or indirectly. If you sit on a 401k with $1M in it, you are a part of the problem even if you feel average.
What we need is to redistribute consumption, not wealth.
Punish the rich for wasting resources on buying super cars and yachts and mansions, don't punish them for innovating and working hard.
Harder than 82% of the other population? Lol.
Harder than 99% of the other population? Lol.
Of course not; being poor is a condition, it is not a sacrifice. It holds no merit as a condition. You cannot use your lack of capital as a bargaining chip at the table. It is not a sign of your deserving more money. If you work hard and do something good for me, that I am willing to pay for, then you deserve money.
Capitalism is altruistic. It functions when people do good, valuable things for each other and establish trust that payment will be provided for that value. It has nothing to do with your status as poor.
Like selling addictive opioids, scam affiliate marketing subscriptions, atmosphere-ruining fossil fuels, attention-destroying social media sites (often targeted at children!), society-destroying social media bots, arcane financial products whose only purpose is to shield immense wealth from taxes or regulation, etc. etc.
Yeah, capitalism sure is great, ain't it.
Moreover, with the amount of ecological damage (mass, irreversible extinctions, global warming), indigenous genocide, slavery, etc. I'm not sure if being anti-capitalist is as "insane" as you put it. Global capitalism has given us advances in medicine, culture, reduced warfare, material wealth—but these advances haven't come without significant costs. Depending on what you value, capitalism could end up being a net-negative system.
But seriously, who cares if some guy is controlling how 10 billion dollars get invested? He certainly knows better on how to do it than I do.
What upsets me is when that guy siphons money off of that 10 billion and buys some stupidly large house which is utterly useless to society at large.
I wouldn't be entirely sure about that given how poorly most funds seem to do against the bare stock market.
After all it's only numbers in a bank account.
If we had a consumption tax that redirected all spending into things that help everyone, than all of these things we fret about will go away.
The great capital allocators of the world will still be able to be the great, rich capital allocators of the world, but minus all the wasteful toys.
They'll serve mankind doing what they do best without siphoning off important innovation and resources.