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Comment by padobson | Hacker News Reader

Even as the gap between the rich and everyone else widens, the quality of life for the bottom 99 percent has vastly changed since 1928.

This makes me wonder how much people care. In a global economy where the 1% are investing in markets that can reach billions of people, extreme poverty on a global scale was sliced in half in a 30 year period, and supply chains allow us to have super computers and unlimited entertainment for tiny fractions of the median wage, you can expect a lot of inequality, but life is way better for everyone in the world since 1928.

Inequality is only a problem in so much that it leads to higher crime rates and (eventually) civil instability in places where its most apparent. We haven't seen much of that (yet), but don't stop looking for it.

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Inequality has other negative implications although they are far more indirect - misallocation of resources. To reduce to the absurd logical extreme while one technically might get the best students in the world by tutoring a handful of megawealthy kids with the budget of the entire US school system exposing all children would pay off far more just by giving them opportunity to advance more alone.

In addition that level of concentration has the power to corrupt systems to serve self-perpetuation of the interests of the wealth holder at the cost of everyone else. Horrifying third world corruption like lobbying against a reliable power grid because it would hurt the diesel and generator seller's profits despite it killing people and holding the country back.

Technically a robust system of law and justice could keep those controlled but money comes with myraid ways to undermine that. These are extreme examples but they demonstrate why it should be watched carefully.

I think the really important point you make is the issue with corruption. If someone simply provides value and gets rewarded for it, that is great and they deserve the wealth; but it is the sad reality that most people with lots of money/power eventually seem to seek more power through any available means, which eventually becomes through by force of law and corrupting governments. The thirst for power and the hubris of seeing yourself as a kingmaker is a powerful temptation for a lot of people.

I don't believe in forced redistribution or any of that (that usually just ends up making the problem worse). I think actually having a just system of laws which are enforced fairly and a culture that promotes virtue are the best guards against corruption.

Just for a point of clarification can you site a case where forced redistribution made the problem worse?

The Cultural Revolution and the rise of Soviet Russia resulted in widespread famine leading to the deaths of tens of millions of people in each country.

It turns out that just handing the reins of power to an untrained and inexpert proletariat is not a good strategy.

The problem was forced distribution and how that is a bad idea. You've redefined it as "forced distribution by an untrained and inexpert proletariat and how it is not a good idea".

Agreed, my original question was not trying to conflate "poor people-proletariat" with "untrained and inexpert", I think that is a dangerous path of categorization.

You asked for times when forced redistribution of wealth caused problems. I complied. In the Russian case a major problem was that the means of production (farms and farm machinery) were taken from those who knew how to use and manage them (the landowners) and given to those who didn’t.

This was an extreme example (landowners were massacred). More minor forms of wealth redistribution might be more viable.

The bottom percentiles are substantially less trained an less educated than the upper percentiles. This is not a “dangerous conflation”. It is a fact. Education is strongly correlated with wealth. The bottom 50% are less likely to be educated either in college OR in a skilled vocation. You wouldn’t just put the janitor in the ceo role. Likewise, you wouldn’t target innovation and technical advance by cutting taxes to the the poorest citizens. You might cut taxes for other reasons (e.g., humanitarian)...

And of course, increasing educational opportunities to the poor might help w innovation, but free education is not identical w wealth redistribution.

Redistribution is always from the rich to the proletariat. “To” not “by”. I’ve pointed out that the proletariat is, on average, less expert and trained. You may disagree with this point, but I haven’t redefined anything.

Instead, I’ve attempted to point out some ramifications of extreme equality.

This is very different than having a strong social safety net..,

> Redistribution is always from the rich to the proletariat.

No, it's not. Redistribution in the other direction is possible, and redistribution where the parties are not “the rich” and “the proletariat” are possible.

In the Chinese case, it was less the Cultural Revolution, and more the Great Leap Forward, but yeah, turns out if you require everyone to produce unrealistic amounts of steel, they turn their plows and woks into steel, and then they can't produce food, and can't cook, and they starve.

True, and it was more a failed experiment in central planning than a massacre of the landowners.

The Great Leap forward was an example of so many things going wrong including the danger of refusing to admit being wrong and lack of domain knowledge.

The famine also has roots in the pest eradication campaign lists including sparrows because they also ate grain. However they also ate locusts which makes the "sparrow tax" well worth paying compared to plagues of locusts scouring your fields. At least until you can control them sufficiently through pesticides or other measures anyway.

They refused to consult actual farmers or industrialists and then when faced with evidence of problems turned foolishness into evil by refusing to modify their policies. Just not consulting isn't a sin in itself - at times disregarding prevailing wisdom can pay off contextually or generally - if you know what you are doing or modify in the face of failures to address not knowing before rollout.

Those sorts of problems were endemic to communism along with refusing to recognize that while often overcompensated and not immune to foibles they do in fact do useful work. It is interesting to contrast with actual collectives of say farmers or occasionally artists - not leading the world by any means but a stable niche and a beneficial arrangement.

If you want to understand wage stagnation in the US, look up the "elephant curve." In a nutshell: middle income of rich countries has stagnated because of the new need to compete with rapidly industrializing poor countries. Everyone's income around the globe tends to increase during this process (a very good thing!), except for middle wage earners in rich countries.

Meanwhile, in local politics, both sides of the aisle blame eachother for this effect, which is totally outside of either of their control.

Cutting taxes and then cutting government services is totally within their control. Providing assistance to big corporations while denying it to citizens is also under their control.

Saying both sides do it when clearly only one side is doing it does not help.

You say assistance is being denied, but look at the graph of transfer payments by the government, it has been growing fast since the early 70s, and up every year since 1950 except during the financial crisis in 2008/9.

You’d almost think that the increased social spending could be contributing to the increased inequality because it tracks closely.

https://fred.stlouisfed.org/series/B087RC1Q027SBEA

Perhaps more people are qualifying for government assistance, because they're making less money.

Exactly, it's the government subsidizing the labor costs for huge, profitable, companies not paying their workers living wages. [0]

[0] https://www.forbes.com/sites/clareoconnor/2014/04/15/report-...

That graph doesn’t look like it accounts for either inflation or population growth, and so it’s not going to say anything useful. It’s certainly not suitable for making your argument.

Here it is divided by CPI and population: https://fred.stlouisfed.org/graph/?g=kyKl

This isn't really a good argument for the parent IMHO, which deals specifically with middle income workers.

Unfortunately I can't find an exact chart with details on the % of transfer payments devoted to each category, but my best guess is that "middle income workers" are not the biggest target for a large portion of this category. It's pretty clear in various budget charts though that the largest category of "transfer payments" in the United States go to the retired (Medicare and Social Security) and health assistance for the poor (Medicaid). Some of the other big hitters also are more low income oriented (eg SNAP).

There are some programs like unemployment insurance which may help middle income workers, but they only temporarily under a very specific circumstance. Even something like EITC (I'm not sure if it counts as a transfer payment or not in that graph, but it should) tapers off well below middle income if you don't have children.

(There's not necessarily anything wrong with biasing transfer payments to the poor and elderly at all, I'm just saying that if transfer payments have increased a lot, chances are it wasn't caused by any middle income worker except maybe retired ones.)

I find the elephant curve explanation compelling. But I’m not sure it’s fair to then say there’s nothing that can be done to mitigate the impact of that.

Rich Scandinavian countries, for example, have a more redistributive tax system that appears to leave people broadly happier. Fine to argue the relative merits of such an intervention, of course, but worth noting it’s very much an option.

Not really an option. The largest scandanavian country, sweden, is a little larger than Los Angeles and the rest are much smaller. They have little emigration and immigration, and although their gdp per capita is similar, the huge population difference means their economies/gdp are of a totally different scale.

Apples to oranges.

There is more emigration and immigration in Sweden than in the US (relative to the population).

I don't see why scale would matter that much. If it works for 12 millions why wouldn't it work for 2times more, or 10 times more ? Or 30 times more ?

It would require some real argument about why size matters and prevents the policy from working. Because right now the US has an economic repartition similar to Israel, which is even smaller than Sweden.

Your rationale for the Nordic model being inapplicable to the US is a common one among conservatives, but it baffles me.

Of course the Nordics are smaller than the US, but all of the economic variables in question should scale on a per-capita basis. Specifically, what is it about a population difference that makes a strong safety net inapplicable?

"America is bigger than X" is a thought terminating cliche to make people stop asking awkward questions like "why is quality of life better in X?"

Except it's baloney, the EU even has a bigger population than the US and has universal healthcare, public transit, etc.

Anecdata: I work within a large Scandinavian bank. I've met a lot of people (maybe 20?) from our Copenhagen office, but I've yet to met a single Dane among them. It's a mix of Eastern Europeans, Western Europeans, Southern Europeans, other Scandinavians Indians, Chinese, UK, US etc.

These Scandinavian countries may be unable to afford this approach if they were required to provide for their own national defense at entirely their own expense.

In doing so, many countries with these sorts of nation wide programs may become woefully uncompetitive, not to mention quality of services would go down.

Do you have sources supporting this argument?

This is exactly right and something that my fellow American Millennials can't seem to grasp. I do business in many different developing countries where a good wage even for skilled programmers is less than 10% of a normal silicon valley wage.

It really is the whole world competing for information jobs these days and while it will eventually level out, it's bound to cause wage depression in already developed countries.

> Even as the gap between the rich and everyone else widens, the quality of life for the bottom 99 percent has vastly changed since 1928. >> This makes me wonder how much people care.

People do care, because their year of comparison isn't 1928, because most weren't alive at that time. Rather they compare it with the long post-WWII period of growth that they or their parents grew up in, when basic goods and services like housing, education, and health care became affordable for the working class.

People don't feel grateful that polio isn't prevalent today because they don't see anyone with it anymore - it's baked (justifiably, IMO) into the expectations-cake in the developed world. However, they do see that it's harder to afford the basics, and also some of the luxuries of life (i.e. the boat and cabin by the lake).

Cheaply available entertainment and computing power is cold comfort when you are struggling to pay your mortgage/rent, your out-of-pocket medical costs, or for your childrens' education.

EDIT: I would add that I also recognize that the post WWII social contract wasn't (and still isn't) available to large sections of the population.

To be honest, a nice gap between rich and poor is probably a good thing for the economy. If people aspire to become rich by producing value/wealth, that's a great thing for everyone.

The problem is when people become rich by not producing any value or hampering future value. You either become rich by producing more wealth than your peers, suppressing wealth of your peers or force acquiring from your peers.

The 0.1% start engaging in suppressing and the dictators start engage in force acquiring.

I believe a healthy tax system and a healthy income gradient makes up for a long term prosperous country.

The problem with US and more pronounced by Trump administration is the big tax benefits to the 0.1%-ers, pulling out ACA, net neutrality e.t.c is going into the "suppressing your peers" area.

America may have a strong economy now, but its not sustainable for long term.

I would also suggest that inequality is also a problem in that it can distort the political process - this seems to be a particular problem in the US although we are hardly immune from it here in the UK.

Many who argue this point are usually the ones who would be doing the distortion when the time comes -- for example, when Yanis Varoufakis argues that there needs to be more income redistribution across Europe or else the pitchforks and torcehs are coming, I wonder what the difference is between predicting instablity and vaguely threatening political violence.

My understanding is that Varoufakis is a pretty decent guy who tried to do the right thing but was hammered into the ground because he refused to play political games.

Edit: If nothing else I thank him for pointing out the irony of German politicians insisting that a "debt is a debt" to Greeks...

I think tech workers are vastly out of touch with how the majority of Americans are living in this country, but- it is only a suspicion. Indeed, we are fortunate.

By and large, you are correct. I think it's just a human condition that if you make 10x what the poverty line is you are also 10x unable to sympathize or empathize with those making less.

It's very easy to feel like a rational human when you have everything you need and more. It's too easy to blame the poor for making bad decisions. They are operating under an entirely different logic system and reality is bent in ways the upper 20% cannot fathom unless they've been there.

It's especially galling when success in this country is increasingly tied to a birth lottery that the winners justify the system with such disregard to the unfortunate.

Having been someone who has definitely been there, I think you're right. I am far, far more comfortable than I ever could've imagined 10 years ago but I'm not under some delusion that I didn't get at least somewhat lucky.

Its actually correlated with much more than crime and civil instability. Its correlated with health, happiness, and a bunch of things that affect well being.

Is income inequality also correlated with a lower median income?

If so, then any correlation between income inequality and all of those other things are likely a correlation between them and median income.

Do places with with high income inequality and high median income compare favorably or unfavorably with places with high income inequality and low median income?

This is an overly simplistic interpretation of human beings. Our life satisfaction is partially dependent on our perceived social status, so increased inequality can indeed weaken quality of life.

Comparing quality of life today to quality of life in 1928 (or any other time) is not a simple exercise, there are a lot of variables to take into consideration.

Philosophy is really subject you need to study to understand this. On quality of life, economics is very superficial and unsophisticated (and honest economists have always admitted as much).

If you'd like to know more take a course in philosophy (or listen to the Philosophize This podcast)

> Inequality is only a problem in so much that it leads to higher crime rates and (eventually) civil instability in places where its most apparent.

This is astoundingly incorrect. Ask the people of Flint, MI. Income inequality directly impacts the length and quality of a person's life.

A quick glance at Wikipedia is all it takes to discover this. https://en.m.wikipedia.org/wiki/Economic_inequality

Or, stated similarly: “Inequality is only a problem for the wealthy in so much that it leads to higher crime rates and (eventually) civil instability in places where its most inconvenient for the wealthy.

Your conclusion sounds like the premise of Ready Player One (and countless other dystopian future scenarios). Hooking poor people up to cheap, advanced entertainment is no better than stuffing them which cheap over-processed calories.

So only rich people can afford to make good choices in regards to food? Rice, beans, whole grain bread, and frozen vegetables are all fairly cheap. It doesn't have to be Whole Foods Organic to be healthy.

I see this argument a lot on here, and while I agree with it logically and factually, it totally dismisses the human element.

Rice, beans, and vegetables are very nutritious and cheap but they're generally boring in comparison to a bag of Cheetos or a doughnut.

When you're dirt poor, you don't have many avenues to get a quick pick-me-up feeling -- so often that comes from junk food. A $1 burger is not as good for you as $1 of veg and rice, but it gives you more momentary pleasure and activates the reward centres in your brain.

Even as you eat it, you know you could be eating something more nutritious which would be better for you in the long-run, but you still eat it. Once you do it the first time, the subsequent times become easier, especially if it's loaded with sugar and you get yourself in a high/low blood sugar cycle.

I'm not defending it, and I'm not saying people have no control over themselves, but I just wish people would have a little more compassion and understanding when they go for the "beans and veg are cheap" argument.

People like to lambaste the McDonald's dollar menu cheeseburger, but it's a remarkably cost-effective and more-healthy-than-you'd-think method of sustenance. Skip the empty calories in the french fries and soda, and you're really not doing that badly.

That's pretty much spot on.

I remember being $100 short in my checking account for the next months rent and having $5 in my wallet. Humans are not machines. I bought some fried rice and a 40oz beer and watched my favorite show. For a few hours I was not completely miserable.

People who have more than enough do not understand what those few hours mean.

There is also the time element. If you're working two part-time jobs and delivering Seamless on the side, not to mention your hour-long commute from the nearest affordable community, your time to prepare all those healthy vegetables into a palatable meal is a lot less than that of the average tech worker.

Food deserts don't help either.

https://socialwork.tulane.edu/blog/food-deserts-in-america

Inequality is a pretty big problem when you're one of the majority stuck on the bad side of it. Most people here seem to exhibit a deeply held ignorance on the plight of the vast majority of their fellow citizenry.

The top 1% of earners pay more than 40% of the total federal taxes. Moreover: "the top 1 per cent paid more tax than the total paid by the bottom 90 per cent combined."[1]

Those taxes fund defense, social security, national parks, interstate highways and many other services that benefit everyone.

[1] https://www.ft.com/content/d17e9240-c61e-11e7-b2bb-322b2cb39...

I think it's important to remember that the top 1% can only claim credit for funding over 40% of the total federal taxes because they have managed to suppress the growth of wages for the bottom 99%. Since they have captured so much of the wealth, they have robbed the bottom 99% of the ability to sustain their own the country. This isn't a function of generosity or humanitarian sentiment and to imply otherwise would be, in my opinion, dishonest.

As we see the top 1% decide to pay less and less of the tax burden (a burden they have placed on themselves), we'll see more crime and unrest and roads rot and the social safety net touted in this article begins to disappear.

A couple of qualifiers:

A) This only refers to income tax, and does not count more regressive federal taxes (FICA) or state taxes (sales tax). It's interesting that I can easily find sites with aggregate tax distribution by income level for income tax pretty easily (https://taxfoundation.org/summary-latest-federal-income-tax-...), but finding sites with aggregate tax distribution by income level for FICA seems difficult...

B) It's worth keeping in mind that the top 3.65% do earn 17.5% of aggregate income (https://en.wikipedia.org/wiki/Household_income_in_the_United...)

Obviously the United States is progressive taxation overall, but I feel that this oft-quoted bullet point way over-simplifies the American tax landscape.

Try looking outside the US for the crime rates and civil instability. There were riots in the Haitian capital a couple of weeks ago as their government tried to raise the cost of fuel.[0]

While we talk about the "global economy" a lot here in the US, I believe that we only benefit because we have so much control over that global economy. As US control erodes it seems reasonable to assume that we'll start to be hit much harder and the top 1% will be well positioned to be insulated from that hit.

[0]: https://www.washingtonpost.com/world/the_americas/large-prot...

Inequality in itself causes unhappiness. Or jealousy, if you want to call it that.

I always used to mis-use Jealousy, when I meant Envy. you mean Envy. The lord God is a Jealous God. He's not envious.

That snark aside (sorry) I actually agree with you. relativism is all here, the mass inequality fuels dissent in unhelpful ways and the marginal freedoms of Moar Moar is actually low: if they paid more tax, the increment on society would be huge, and the decrement to their disposable income unimportant.

Envy!

The misuse of "jealousy" in place of "envy" bothers me as well, but I'm not sure it was misused in this case.

I would assume that if income inequality inspires envy in those on the lower end of the economic scale, it would also inspire jealousy at the upper end.

Hmmm... you know? you may be right. I tend to read use of Jealous to mean "I want what you have" but in this context it could be the super rich saying "you can't have what I have" which is .. Jealously guarding their riches.

> Hmmm... you know? you may be right.

I'm sure this has happened once before, though the instance doesn't spring to mind right now.

Does it also bother you as much as it does me when people misuse "fewer" and "less"? "Fewer" should be for discrete concepts ("fewer than twelve items"), while "less" is for measured continuously ("less water in this cup").

> I tend to read use of Jealous to mean "I want what you have" but in this context it could be the super rich saying "you can't have what I have" which is .. Jealously guarding their riches.

I tend to think of jealousy and envy as two sides of the same coin - one tends to inspire the other.

If someone doesn't suspect others of envying what they have, they have no reason for jealousy - why guard that which is not sought? Recognizing envy in another for things you posses is often (usually?) the origin of jealousy.

On the other hand, when someone recognizes jealousy in another, it often directly inspires envy. How often do people pursue things that they never desired until they saw that others valued them?

What is advertising if not an attempt to inspire envy in your audience?

We even have a term for markets where this cycle feeds upon itself - "Veblen goods". The more they cost, the fewer can afford them and the more that desire them.

> I always used to mis-use Jealousy, when I meant Envy. you mean Envy. The lord God is a Jealous God. He's not envious.

Wait, my dictionary (the Apple dictionary) defines "jealousy, adj. 1. Feeling or showing envy of someone or their achievements and advantages." What's the difference?

The difference is exclusivity or deservedness (with jealousy being a superset of envy).

A combination of exclusivity and deservedness could be jealousy regarding a "cheating" partner in a monogamous relationship. To describe that as merely envy would be confusing, at best.

"Serfdom in itself causes unhappiness. Or jealousy, if you want to call it that."

Interestingly, it seems to me that the current iteration of the oppression business can somehow always dismiss calls for justice as envy/jealousy, but never the previous ones.

I favour income distribution and the nordic model, and even calling it envy should not be a dismissal, but a recognition of a basic human emotion that should be socially engineered against.

I didn't assume you agreed with the envy part. I do however find it absurd that envy is used in this context - since the word would never even be thought about in the serfdom case. Words do carry meanings after all. In this case we have the mortal sin of the individual instead of the righteous condemnation of societal injustice.

I think many people feel something is wrong with society, but don't necessarily know where to pin the blame. The Brexit vote here in the UK, and Trump's campaign in the US, successfully played to these feelings (but pinned the blame on immigrants, the EU, the Democrats, liberal elites, etc.)

I find it quite scary how easily people are influence/manipulated, especially in the age of the internet. It has never been easier to make sensationalist, misleading headlines without anything to back them up. Many people will only read the headline. The human mind is so easily manipulated and over time, makes up information and remembers it as fact (see confabulation-https://youarenotsosmart.com/2012/05/30/yanss-podcast-episod...). Who knows how much Brexit, Trump, etc are due to such manipulation?

> but life is way better for everyone in the world since 1928.

I agree with most of your comment, but everyone?

For sure, the mean and median purchasing power of people is way up, but the floor of human experience is as low as ever. Being poor today in North Korea, Iraq, or Syria is surely as miserable as human life has ever been.

> Inequality is only a problem in so much that it leads to higher crime rates and (eventually) civil instability in places where its most apparent. We haven't seen much of that (yet), but don't stop looking for it.

Our crime rates in the US are higher than most places in the world. For example, more than half the countries in the world have lower homicide rates than the US. I agree with your hypothesis that crime is linked with inequality and I think we are already seeing that.

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