Comment by forapurpose | Hacker News Reader

Comment by forapurpose | Hacker News Reader

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> the rich have been getting richer since the beginning of time

That's not true and we must be careful not to accept an aristocracy (or oligarchy) as inevitable. That the wealthy will inevitably hold and consolidate power is counter to the history of democracy, a specific rejection of aristocracy, and a system which has worked the other way in country after country to great success economically and politically - great news and great hope for humanity in these times. The foundation of the U.S. is that all are created equal, and after that it's a land of opportunity where merit wins out, not inherited wealth and corruption.

If by that you mean that rich have been getting richer relative to others, that's certainly not true. In the U.S. it's been true since the 1980s, but it fluctuates and in most other advanced economies the proportional difference (the disparity) is much less.

If you mean that there is not downward social mobility for the rich, that's also not true. I don't have the numbers, but I've read about research that overall social mobility (up and down) is significantly less than it was before Reagan. There's also the old American family story: Rags to rags in 3 generations. More concretely, the U.S. used to have higher taxes on the high income, and more importantly, a (much higher?) estate tax: Inherited wealth is not merit, but effective aristocracy. That said, I don't know the inter-generational overall trends of wealthy families.

(Or maybe the parent means something else.)

EDIT: Some clarification + the last sentence

I’ll pick out one point that you seem to miss - when the US taxed the heck out of people with high incomes, you still had people like Howard Hughes, Warren Buffet, and John Paul Getty becoming even richer than they were before.

So yes, the rich get richer, and high taxes do not stop that (but present the illusion that it stops ).

I’ll gladly admit I’m wrong if you can disprove my three simple examples. Last I hexked, they were R I C H.

You do realize that you can still have some very rich people and still have a more equitable distribution of wealth than we have today, right?

I never made that argument. Reread my comment.

I don't think three examples are representative of the wealthy overall. I didn't say 'no rich get richer'; beyond a doubt, some do - and that's fine and fully compatible with meritocracy. The question is, what is the overall trend? Is there social mobility, opportunity and meritocracy, or aristocratic power and inheritence?

Ok. Interesting point you have. But let’s dive into something that shows how statstics can get really skewed:

Take money 100 years ago. The richest guy on the planet (ignoring royalty, as those figures aren’t reliable) was John D Rockefeller. He was worth a ton of money, possibly even a billion dollars. Today’s richest man in Jeff Bezos, worth about 100 times that (depending on the stock price, somewhere roughly between 100-125 billion).

So today, people say that the wealth gap is growing. Indeed, the rich are richer.

However, at his peak, Rockefeller was worth about 1.5% of GDP ( a truly crazy sum of money that equates to roughly $350 billion today).

So if we look at inflation-adjusted money, the rich are poorer than they were 100 years ago - indeed, Rockefeller was about 3 times richer than Bezos.

So depending on the metric, the rich are getting richer, and wealth disparities are growing. But when you normalize for inflation one other factors, the disparity is not growing.

Also, if you take the poorest person at the world with zero dollars, and the richest person in the world with one more dollar, than the wealth disparity is growing, and headlines shout out crazy stuff that sets everyone’s emotions.

But zero will always be the lower bound, and the number at the top will always grow (assuming inflation).

So is disparity growing or now? Well, I think the best way to answer that is ask this question: “would you rather be you today, or Rockefeller 100 years ago?”

I’d rather be me. Between the internet, healthcare, cars, planes, etc, I’m way richer than Rockefeller, because despite all that money, he couldn’t begin to buy those things. So society has gotten much richer, and the disparity between me and Bezos is smaller than between me and Rockefeller. Also, I don’t have to really be worried about dying from the flu. Rockefeller did - even a simple infection could kill him, but unlikely to kill you or me.

Economists aren't stupid, and they've thought of these things like zero lower bound. This is a well-studied issue. When people say the concentration of wealth is increasing, they aren't saying it's increasing relative to Rockefeller's time (how far back should we go? 1492? The start of the neolithic?), but it's increasing now, such as over the last few decades.

I get your point, but have a couple issues. First, there are plenty of stupid economists. Just like there are plenty of stupid people in finance or politics, or many other things.

But I’m not going to debate that particular thing, and I’m fine if we disagree. *

That being said, the timespan question is very valid, but pinnning down the cause is really hard.

If you read the research, the highest correlation is with globalization, not taxes. Let’s pretend you fully buy into that statement. If so, would you argue against globalization? And I mean that as a serious question. This is a really hard problem, and the answers are more like foggy hints than anything else. But if we’re really honest with ourselves, and the answer was yes, what should we do about it? Taxation is hard because it immediately districts the natural market and causes many second order effects. Pulling those apart to understand the root cause is really hard and few people can do it at all, let alone well.

*My main issue is that economists tend to have a poor understand of statistics and cause and effect relative to what they need to really do their job. If you listen to Ed Yardeni, he basically throws out all macro-economics as being a sad state of affairs given how bad their models are compared to the reality they’re supposed to predict. Still worse, novel prize winners continue to spout their theories after they have been proven empirically wrong. Hence my general issue with the field. Some are clearly smart, but enough aren’t that gives me great pause.

The idea of democracy as a “rejection of aristocracy” has been well discredited for centuries now.

The topic of discussion here is not “social” but economic mobility. Let’s not mix them up so carelessly. Economic mobility is a measure of ability, or potential, not concrete events. To discuss “downward” economic mobility is to imagine wealth being forced upon these folk.

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