Comment by darawk | Hacker News Reader

Comment by darawk | Hacker News Reader

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> Not referring to this specific exhibit but other pieces by a similar artist. Thousands of people can create this kind of paintings for cheap. That it still sells for more than what many people can make in a decade or a career means a stratospheric concentration of wealth in society or a bubble in the commercial art world.

Not really. The level of wealth required to reasonably make a purchase like this is what? 20 million? That's not 'stratospheric'. It's richer than I am, to be sure. But it's only between 2 orders of magnitude richer than your average software engineer's annual salary. I think that's a pretty reasonable level of wealth inequality, and not really indicative of much at all.

> If there is real scarcity because of climate change or other widespread disaster, how much can a piece of this ‘quality’ be sold for? A loaf of bread, or less?

Your point here proves the exact opposite of what you think it does. The fact that people can invest vast resources in things that aren't immediately useful for survival is an incredible testament to the stability and productivity of our economy. Because you're right, if people thought there was any significant chance of things going mad max, they certainly wouldn't be investing in art.

> That millions of children still starve but a piece of simplistic art is worth more than the value of food a whole village consumes in a decade is a sorry effect of the financial system we use or the way our society assigns ‘coolness’ score to people and activity.

Is it? Or do prices simply reflect our personal valuations of things? Which is to say, every decision each of us makes of what to do with our individual time and money sets a price. When you wrote this comment, you chose to invest your free moments in it, rather than earning money to donate to the poor. Is that a sad commentary on the state of the world? Or is it just the natural consequence of people being allowed to allocate their own resources?

Two orders of magnitude above something that’s already a ridiculous amount of money globally speaking. That’s not exactly reasonable, the fact that it’s not that much money compared to the real super-rich people is just a reminder of the unfortunate reality of long-tail economy.

You are free to spend your "ridiculous amount of money" however you please. If you don't donate most of what you earn to help starving children, maybe doing that and living just above the poverty line is a good place to start, before advocating that others give up their QoL.

I suppose I don't really understand. Why do you think it is bad to have rich people? It's often stated as if it's tautologically true, or self-evident. What do you think is the harm caused by that?

Would the rest of us be better off if we simply deleted the money of the rich?

That's obviously a wrong question to ask. Multibillionaires are a symptom, not the disease.

Symptom of what? High productivity?

I don't think two orders of magnitude is a reasonable level of wealth inequality.

What gives you the right to decide what other people do with their stuff? How would you feel if someone came along and said "I don't think two orders of magnitude is a reasonable level of wealth inequality, so I'm taking everything you own to give it to poor Africans"?

Imagine two people both making $100k/year. One saves/invests half their income, the other saves 0%. In 20 years, one has a million dollars of savings, the other has less than a thousand: three orders of magnitude of wealth inequality. The saver, by exercising restraint and not consuming everything he produces, has contributed more to the economy by allowing the fruits of his labours to be invested, increasing future productivity. If we penalise the saver and favour the wastrel, we incentivise and get less savings and investment, hence in the long term less growth and lower standards of living for everyone.

The rhetoric here implies that the poster believes there is no middle ground and also poverty is caused by individual, personal flaws (a reasonably close approximation to argue that a rich man is more moral than a poor man inherently because being wealthy is morally good).

>The rhetoric here implies that the poster believes there is no middle ground and also poverty is caused by individual, personal flaws (a reasonably close approximation to argue that a rich man is more moral than a poor man inherently because being wealthy is morally good).

It's not about morality at all; if the universe is deterministic, all behaviour was caused by the big bang, and if it's random, than all behaviour can be traced back to chance. Even in this case that all action is predetermined and nobody is at all responsible for their life (hence the concept of morality makes no sense), in terms of system design it still holds that a system that encourages economically beneficial behaviours (saving/investment) will result in better economic outcomes than a system that penalises them.

The key thing to understand about economics is it tries not to assume any morality. There is no absolute "moral good" (which is trivially provable by https://en.wikipedia.org/wiki/Regress_argument), value only exists in the minds of people. And the clearest revelation of what people value is what people are willing to spend their time, money and the fruit of their labours on.

> The saver, by exercising restraint and not consuming everything he produces, has contributed more to the economy by allowing the fruits of his labours to be invested, increasing future productivity.

Is that so? I'm not so sure. How can we know that the spender didn't contribute more to the economy by spending 50k/year more on goods and services?

Value is created by production: someone has to make something before it can be consumed. To increase productivity, to increase the ability to produce more things, investment is needed, be it in research, infrastructure or education. If everything that is produced (the $100k worth of value) is consumed, there's nothing left to invest.

More empirically, the fact that people are willing to pay the saver interest for his saving/investment demonstrates that it must be creating some value. That interest is essentially payment to the saver for refraining from consumption.

Thanks, good point.

I don't think that a rich heir contributed THAT much more to society than, say, a poor Amazon warehouse worker.

What gives people the right to own “stuff” in the first place? We live in society. If people aren’t happy with the rules, they can go live in a cave and burn their millions for warmth.

>What gives people the right to own “stuff” in the first place? We live in society. If people aren’t happy with the rules, they can go live in a cave and burn their millions for warmth.

If you're an American, then the society you live in has a constitution it's agreed to follow that stipulates people have private property, and the state doesn't have the right to arbitrarily seize it.

That aside, regardless of what society you live in, the last century demonstrated pretty clearly that taking rich people's stuff and banishing/killing/imprisoning them ends up making everyone in the society poorer, see for instance the communist revolutions in Russia and China. Because you destroy the incentive to invest, and to take the risks of starting a business. You also take money from the people who've demonstrated the best ability to invest it, and give it to people who've demonstrated minimal ability to invest or create value, resulting in a massive reduction in productive investment being made.

There's a healthy midpoint between sending the rich to gulags and letting people accrue wealth without restriction.

If you own two orders of magnitudes more than somebody else, that means you can buy the stuff that they might need so they don't get it, such as land and labour.

That's also a form of violence.

I'm not saying that the saver should be penalized and the wastrel favored, you're reading way too much into this.

What I am saying is that high wealth inequality is a sign of decay in a society and it's in the best interest of everyone to ease it.

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