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Comment by knuththetruth | Hacker News Reader

>And an increasing share of wages going to the top income brackets isn't in itself cause for concern, only if the members of the top income brackets are largely static does it matter (since it means income is going to a small group of individuals, rather than a broader group of individuals who are swapped in and out of the top income groups).

So a society in which there's competition to be among a handful of feudal lords, but where everyone else suffers tenuous and desperation is unconcerning? How so?

We've been through this in American history. It was called the Gilded Age and it was a nightmare for all but a handful of robber barons, resulted in widespread social and political instability, and violence.

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Uh...the gilded age resulted in massive industrial and income expansion, the rise of the US onto the world stage financially and the lowering of maternal death rates, raising of life expectancy and a general post-industrial boom. Wages and average per capita savings doubled.

It was also associated with the immigration of tens of millions of impoverished people, which is part of the reason for the massive inequality numbers - the population doubled during this period.

Excuse me but those benefits weren't result of the Guilded Age. Correlation, not causation. Both things were a result of the industrial revolution and globalization.

Exactly. As was communism for that matter. Ultimately almost all major economic change had technology at its root. And where that change has undesirable side effects it's the job of government to address them.

Exactly. The Gilded Age was also a result of the industrial revolution and globalization. It describes a period of history - during which, these things happened.

https://www.theatlantic.com/magazine/archive/2007/06/the-dar...

Wet pavements do not cause rain

You can't really support the argument that the Gilded Age actively caused these negative things by virtue of them taking place during the Gilded Age without supporting the argument that the Gilded Age caused positive things by virtue of them taking place during the period.

And if you have morals, you can also say they weren't worth it. You could make the same argument about slavery, etc, but suggesting it was totally worth would be pretty bonkers.

Humanity can accomplish great things without dehumanizing or hurting most of the population, and being critical of the morality of these systems is a big part of that.

Are you actually saying that the advancements coming from a foundation built in the latter half of the 19th century aren't worth the cost?

I don't agree with that at all, and I'm not sure I would if I had to pay that cost myself, either.

Ignoring that it's very odd to retroactively justify immoral behavior because of unintended, positive side effects: I'm saying that being critical, like asking if the slave-like conditions of most of the population were actually necessary, is a pretty reasonable thing to do. This isn't black and white issue, like I have to pick between "a couple generations have horrible working lives" vs "antibiotics exist". I'm asking if both were possible, and I'd argue that they would be if the people at the top were willing to accept even a little less.

I think the phrasing of your first sentence is fascinating. Does that mean you think that the behavior (union busting, incorporation, or the creation of financial markets, for example) was solely intended to have malicious consequences, and that there were no positive motivations or intent?

Also, it's not that odd. It's a direct response to the criticism you levy - that these things are not worth it. How are you to judge if you only take the immoral acts in a vacuum? You brought up slavery again; their conditions were not slave-like, simply impoverished.

I agree that it's a good idea to question whether periods of chaos, destruction or immorality are actually necessary for progress. It's been pretty much taken as a given since Hegel, but it's a good thing to verify and even within those boundaries there may be some behaviors we can effectively limit while leaving the good bits.

As to your final argument, I don't actually know if that's true, but it's immaterial because that's not how people have done it.

The actions that led to the conditions of the gilded age were most certainly selfish acts of the ruling class. The conditions were not created for the sake of it, or because it was funny etc.

I sincerely doubt the people making all the money were not doing it because the poor people they were exploiting (or killing) might eventually get iPhones or penicillin

I also don't know why I can't criticize the conditions resulting from policies in the gilded age because there's a chance that the policies were maybe not "soley intended to have malicious consequences". Again, things aren't black and white. "Modern tech is nice" and "poverty is bad" are not diametrically opposing ideas.

I'm confused by what you're arguing here. People want to reduce inequality, and you're argument seems to boil down to "nothing really matters anyway" or "maybe them being poor is for the best" (which you insist is something we can never actually find out..?) If you're saying that human nature is inherently corrupt and humanity can't unite to make progress for broadly selfish reasons, I might actually agree. But talking about how this is shitty and / or how to fix it doesn't seem pointless, either.

I have never said and do not support a statement that 'maybe them being poor is for the best.'

You started out saying a moral person would say that the positive consequences of the gilded age were not worth its negative experiences. I disagree.

You then say: "Ignoring that it's very odd to retroactively justify immoral behavior because of unintended, positive side effects: I'm saying that being critical, like asking if the slave-like conditions of most of the population were actually necessary, is a pretty reasonable thing to do."

By saying this you are effectively saying that I am defending immoral behavior with the misconception that such behavior directly led unintentionally to positive consequences. I don't think that, and I'm not doing that. I'm specifically saying that removing 'robber barons' from the equation entirely removes both the positive effects and actions and the negative. The positive and negative are done by the same person, but the actions causing them were entirely different. This isn't simple, as you continue to point out (while, it seems, attempting to simplify it entirely)

People want to reduce inequality - ok, how? I think that's important to figure out. What kind of inequality? Wealth or income or some other kind? What is the consequence of inequality?

To find out, we need to view history as a complex thing and understand both the pleasant and unpleasant, as well as their consequences. Conflict has been a powerful tool, historically. The excesses of one group have often given rise to conflict with another group, which then created a system of greater equality. Could that have happened without the conflict? I'm not sure, I don't have many examples where that happened and a ton of examples where it didn't.

There are a lot of times where people did awful things and they either didn't result in positive consequences or what was positive was not worth the loss. The Gilded Age? Probably not one of those times.

I'm not quite sure what you're saying here, but there are direct causal links between the Gilded Age and robber barons causing huge harms, like union busting using bullets, and absolutely no causal links between robber barons and global decreases in poverty.

Put another way, it's very easy to prove that without robber barons we wouldn't have had many of the terrible abuses during the Gilded Age, and also very easy to prove we would have had worldwide improvements in the human condition even without the robber barons.

No causal links?

No robber barons mean no railway expansion and no massive expansion of jobs west, so no immigration boom. Robber barons are also responsible for financial regulation, futures markets which allowed for much greater predictability and sustained farming output, increased ties to Europe and specifically the UK over Germany, the massive increases in production brought by low oil prices and standardization of performance, arguably unions and labor reforms and a standard wage.

No, that's not what I said. I'm arguing for the same thing you are. But income inequality isn't itself a problem if there is mobility between the income groups. They statistics in the Bloomberg article show income inequality but don't show lack of mobility, and then say we've hit "a disturbing new threshold".

There may be lack of mobility along with income inequality, but the article doesn't demonstrate it.

>I'm arguing for the same thing you are. But income inequality isn't itself a problem if their is mobility between the income groups

I'm not sure how you can't be arguing the same thing I am. The income inequality is what creates the immobility. This is demonstrated by other developed countries where there is less income inequality and greater social mobility, as others have pointed out. Can you elaborate?

Are you sure the income inequality creates the immobility and isn't just linked to the immobility in other ways? The demonstration of other countries implies the latter, but even that is really hard to prove.

Yes, because history. There are no historical examples where wealth was held by the few and social mobility increased broadly. Only when resources are more evenly distributed among social classes has that ever happened.

The graphed figure is not wealth, but income. The (great-)grandparent poster is suggesting that as long as people bounce between income levels, i.e., they have some higher paying years and some lower paying years, it has a smoothing effect on the net income inequality.

>Yes, because history. There are no historical examples where wealth was held by the few and social mobility increased broadly

Uh... The industrial revolution.

You seem to be confusing wealth inequality with income inequality which might be muddying your arguments.

US ranks very low on income mobility. Some people get bumped when they sell a business, but even selling a home will not put most people into the 420+K income range of the top 1% let alone the top 0.1% which at $1,600,000/year excludes even many lottery winners.

PS: Don't forget the median US home is only worth $188,900, which means 1/2 of them are worth less than that.

> There may be lack of mobility along with income inequality, but they article doesn't demonstrate it.

The article doesn't demonstrate it because that is not the goal of the article. But it is happening nonetheless:

https://phys.org/news/2017-04-upward-mobility-fallen-sharply...

That's not what's happening though. First off, social mobility is declining, so let's get that out of the way:

http://www.businessinsider.com/social-mobility-is-on-the-dec...

Second, I think it's still a problem if the income of 90-98% of the country stagnates for decades, while the top earners get higher and higher income. Of course that affects inequality.

I'm also not sure it matters that much if the players at the top switch around if they have increasingly larger leverage on society.

For instance, we're seeing CEOs get rewarded larger and larger amounts of money every year, even if the companies lose money, like in this absurd case:

https://techcrunch.com/2018/02/22/snap-ceo-evan-spiegel-got-...

Where's that money coming from? The employees' potential salary increases? The retail investors' money? It seems to me that the rich keep siphoning off money from everyone else, and that's not sustainable.

They also get larger and larger amounts of money even when they get kicked out of the company for failing. This doesn't make sense to me at all. And I think the excuse that they need such amounts of money or otherwise they wouldn't take the job or something is utter BS. I'd more likely believe the board is giving them the money so the CEO doesn't sue the company, or better yet because the CEO was the one writing their checks before that, or something along those lines.

And this is just the corporate world. The US Congress seems to get crazier every year and listening more and more to corporations and their interests, and less and less to the people and solving real problems in the country (healthcare, infrastructure, etc).

It's like the whole American society is on the brink of collapse, and everyone just doesn't know it yet. Eventually, people will "suddenly" start to violently riot because of all this stuff added together, and it won't be pretty.

One thing I've never understood- in a fair society in which people are not artificially limited, wouldn't we expect social mobility to decrease over time as successive generations "sort" themselves into the spots allowed by their genetics?

Let's say we've got a feudal society with dumb nobility that rules over a smart peasantry by force. If that society becomes free, we'll expect smart peasants to move up and dumb noblemen to move down across the first few generations... but once they've moved, they've moved. Ergo, declining social mobility.

> "sort" themselves into the spots allowed by their genetics

There's an extreme amount of assumption baked into that.

1. Genetics is the only factor that determines merit for wealth?

2. Genetics merits extreme differences in income/wealth?

1. No of course not, but if it's a factor at all we'd expect to see the pattern I described.

2. We're talking about social mobility, not the level of inequality.

I tried multiple times to try to refute all of the assumptions made in this post, but I gave up.

1) One does not have to be intelligent to be wealthy.

2) Those born wealthy do not have to be intelligent to remain wealthy - they just need not be a consumeristic imbecile.

3) Genetics has such a small impact, if any, on social mobility - quite the opposite. If I am born a Kennedy I am more likely to never fall below my birthright social class because of my family lineage.

4) You contradict yourself. You say the nobility rules by force, then immediately follow that with "If that society becomes free" - how exactly would that society magically free?

1. Of course not, I referenced unintelligent wealthy people ("dumb nobility") in my post.

2. 70% of rich families lose their wealth by the second generation, 90% by the third. [A]

3. IQ is a greater predictor of income than parental SES. Someone in the 95th percentile for IQ has a higher EV for earnings than someone born into the 95th percentile for wealth.

4. A number of revolutions have happened. If you don't believe that modern France or Japan are freer than their feudal predecessors then I agree that we are probably not on the same page.

A. http://time.com/money/3925308/rich-families-lose-wealth/

I would not use the Time article as a reliable source, it cites the 70/90% figures a study by the "Williams Group wealth consultancy", which of course is trying to sell its services to wealthy clients.

I've seen the statistic quoted in so many places, yet have never found a link to the actually study. No info on sample size; we don't even have a definition of 'wealth' used in the study.

The sample size is 2000 families over 20 years. Better submarine piece here [1].

[1] https://www.wsj.com/articles/SB10001424127887324662404578334...

I think it's easy to explain why wages have stagnated. The time wages started to stagnate coincides with women's lib, immigration policy changes, and free trade changes. Women's lib dropped an extra 40% more people into the labor pool. Of course that's going to put downward pressure on wages. We changed our legal immigration policy to favor more poor people while simultaneously changing our illegal immigration enforcement policy to keep tons of illegal aliens in the country pushing wages down for the American poor. Trade policy has gutted a huge portion of the country in favor of the already wealthy elites on the coast.

The big economic question of the day should be asking how we've managed to keep wages at only the "stagnation" level rather than precipitously falling in the face of so much downward pressure.

Under that theory, by 1960s there shouldn't be almost any jobs left, since the population grew 25x since the foundation of the country.

You're arguing against a straw man. It's possible to support social and economic policies while recognizing that they have both positive and negative aspects to them.

What I'm saying is that having more workers is not by itself sufficient explanation. The US always had more workers YoY.

Do you believe that illegal immigrants have the same income distribution as the general population in the US?

No. Can you clarify the connection?

If you dump a bunch of people into the low end of income pool it's going to move the distribution curve.

And yet, despite massive immigration (from low income countries) for centuries, the US is one of the countries with highest salaries.

Sure, once the people here today have had a century of assimilation I suspect they will not impact the income distribution curve.

If you were happy with the income equality from a century ago, I'm willing to adopt the welfare and tax systems of that time so all the incentives are the same.

Your explanation presumes fixed demand.

No it doesn't. Here's at least three alternative presumptions:

1. Demand is not perfectly elastic

2. Demand is perfectly elastic, but supply was increased more on the lower end of the income range which reshapes the income distribution.

3. Trade policy reduced demand in the middle of the income range.

I disagree for two reasons.

1) What is mobility? The ability to move out of the lowest income group? How easily does that happen? If it's quick and easy, why doesn't everyone do it? And what about the reverse? How easy it for a person to move from a median income back into the lowest income. I think the idea of mobility is used as a reinforcement for the protestant work ethic / American dream sort of delusion that says "poor people can just work harder and save more and they won't be poor any more". But we have an enormous amount of evidence that points to that not being the case.

2) Also, you haven't provided an argument for why income inequality isn't a problem. If the lowest earners have extremely limited access to housing, healthcare or education, such as is the case in the U.S. I think that's a problem.

> How easy it for a person to move from a median income back into the lowest income.

Many people do when they retire. Or when they take time off between jobs (intentionally or not).

Other comments have brought additional evidence about declining wage mobility. I'll add that the article's stats about the impact of race demonstrate lack of mobility. Working while black seems to mean a 20% pay cut, regardless of education.

As an American, I've always based a lot of national pride on our history as a (relative, for some groups) meritocracy with a lot of mobility. It's really sad to see rapid erosion of this over the last 20y.

Most opportunities for mobility were linked to America being a nation of rapid growth, not because of the kindness of some national ethos. As our growth opportunities slow, you can be sure the haves will do everything in their power to prevent loss of ground to the have-nots.

Meritocracy in the U.S. is a myth in civilian life. The military almost approximates meritocracy but it is by design not egalitarian or democratic. Without extreme discipline, again found in militarism, meritocracy results in the formation of elites who define what the metrics are for merit, they quickly become corrupt with nepotism, lowering the ladder for family and friends to the exclusion of people with actual merit, and it becomes incompetent.

https://www.theatlantic.com/entertainment/archive/2017/06/th...

I don't think you understand what feudalism was/is...

No, I think I do. And so do a number of Silicon Valley "luminaries":

https://en.wikipedia.org/wiki/Dark_Enlightenment

I have no idea why you linked that. The two comments you have posted make absolutely no sense. Non sequitors. Why did you use feudalism first, and then some weird alt right stuff second? What's going through your mind?

The idea is that feudal ideologies are making a comeback with the rise of an aristocratic class. These ideologies are finding support amongst the (conservative/reactionary) lower classes as they try to process why their lives are getting shittier without being provided a clear logical explanation. Thus they reach backwards for older more authoritarian models to try to restore their power. What is missing is the narrative of class struggle.

From the linked wikipedia article:

"It broadly rejects egalitarianism and the view that history shows inevitable progression towards greater liberty and enlightenment (thus, it is in part a reaction against "Whig historiography").[1][2] The movement favors a return to older societal constructs and forms of government, including support for monarchism or other forms of strong, centralised leadership such as a "neocameralist CEO"[3] of a joint-stock republic,[4] coupled with a right-libertarian, conservative or other approach to economics."

There is an idea circulating that the political system in the US is turning into a "neo-feudalism", pushed by a mix of those alt-right "theorists" and some of the new rich.

How much of this "neo-feudalism" shares with actual feudalism is not clear to me.

See

https://www.thedailybeast.com/californias-new-feudalism-bene...

https://www.nationalreview.com/2014/07/new-feudalism-fred-ba...

https://www.huffingtonpost.com/john-w-whitehead/the-age-of-n...

National review and Huffington Post agreeing on something. Wow.

> nightmare

It was a time of massive improvement in the standard of living across the board. You can see this objectively in annual statistics on infant mortality, longevity, and average height.

The industrialization of America was not producing luxury yachts for the overlords. It was producing consumer goods for everyone.

>So a society in which there's competition to be among a handful of feudal lords, but where everyone else suffers tenuous and desperation is unconcerning? How so?

To be fair, he did say it's concerning if the top income brackets are static, so as long as we shuffle out our feudal lords from time to time, we should be okay.

yes, but he just made that idea up, and it doesn't make a lot of sense, also probably never happens.

It's almost like the haves want to try avoiding being the have-nots.

He certainly didn't just make that idea up. You can find plenty of research on it by googling "turnover in the 1%".

For example:

http://money.cnn.com/2016/01/07/news/economy/top-1/index.htm...

The 'feudal lords' are not the 1%. They would be the .1% or the .01%. I imagine the latter two remain a much more static environment.

Also, the 1% in this article is not even defined. After some digging it looks like it is Gross Adjusted Income. There are CEOs who wouldn't be considered in the 1% because they take salaries of $1 while making millions in stock options - it is such a ridiculous metric.

Inequality is about wealth as much as, if not more than, wage.

Stock compensation is rolled into AGI. But I agree with you that 1%ers are not feudal lords.

"to be among a handful of feudal lords"

Is it helpful in a discussion like this to use exaggerated rhetoric? Wealthy people aren't in any meaningful way feudal lords.

"everyone else suffers tenuous and desperation"

But that doesn't describe Americans either, where absolute poverty levels are below 3%.

https://www.forbes.com/sites/timworstall/2015/09/17/americas...

Just for reference, feudal lords didn't have wages. If it was discovered that you worked for money, you were basically expelled from aristocratic society.

That kinda depends on which version of feudalism we are talking about. They were not same.

Nevertheless, feudal Lords did competed among each other and parent talked about competition not about wage.

>> an increasing share of wages going to the top income brackets

> robber barons

You mean, like, people who did productive business? How dare they!

How dare they ruthlessly exploit a powerless serf class and the natural environment for their personal gain! Wait, that's exactly what we're saying.

Welcome to the mid 1800s, where almost everyone is a serf almost everywhere, and the only way that'll change is through a revolution in industry, supported by uncoerced but nonetheless low-brow, hard, and nearly thankless labour.

Well, that and the invention of the living wage concept and a complete shakeup of the nation's economy from the great depression and two world wars.

"where everyone else suffers tenuous and desperation is unconcerning?"

Capitalism in the US has created more wealth and lifted more people out of poverty than any other nation in the history of mankind. Your statement applies to third world countries... not the United States. Oh, we're also the most free and most prosperous nation ever. That helps.

>Capitalism in the US has created more wealth and lifted more people out of poverty than any other nation in the history of mankind

citation needed

>Oh, we're also the most free

https://en.wikipedia.org/wiki/List_of_freedom_indices#List_b...

>and most prosperous nation ever

https://www.cnbc.com/2015/11/02/the-worlds-most-prosperous-n...

Non sequitur. Capitalism requires some income inequality, but runaway income inequality will not be beneficial. Eventually, people get sick of eating rotten cabbage and the guillotines come out.

Side note: "most free nation ever" is a total fiction as part of American exceptionalism. For just one example out of many, there are still religious blue laws on the books in towns across the country, and many are still enforced.

We have laws against trading on Sundays here in Norway too. They might well have started as religiously justified laws but they are nonetheless popular here where the vast bulk of the population is non-religious and a substantial fraction avowed atheist. We don't want our day of quiet disturbed.

No matter how much you love a law, limiting someone's ability to do something peaceful* is limiting their freedom.

*Peaceful here means there ability to do something that doesn't harm others. We can start deep diving on the value of having a quiet day, but the idea that you can't buy a bottle of Gin on Sunday is a choice some people might not find is worth the quiet

work a job making 12/hr and tell me how uplifted you feel. that's the reality for a lot of people in this country.

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