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Comment by cgoecknerwald | Hacker News Reader

> I keep trying to tell [my kids] that money is morally neutral. It does not, in and of itself, make you a bad person. It also does not, in and of itself, makes you a good person.

Being rich individually might not be morally bad, but inequality probably hurts society overall. "No drop is responsible for the flood" yada yada.

> Within a couple of years I was giving away more money than my parents, who had much more money that I had, which they told me was embarrassing to them... I really considered giving it all away at a certain point in my 20s, and I know people who did that. And I wish I could tell you that it was courage that kept me from doing that, but it was mortal fear. I didn’t think I would be able to survive. I was afraid I was a hothouse flower. I didn’t know if I could live on my own.

I think I have experienced this on a much smaller scale - the fear of committing to a career change (out of SWE) due to financial insecurities. Going backwards, financially, is incredibly difficult - it's so easy to get locked into a lifestyle that you simply can't relinquish it up voluntarily.

> I’ve spent a lot of time earning things like post graduate degrees that make me feel legitimate. And those feelings have started to go away. But that’s outsourcing your sense of self.

She's not the only one!

View on HN

> but inequality probably hurts society overall.

The innovative pressure produced by inequality is something that should not be unappreciated. Although it's a sore spot for many, so is any type of discipline or system that is necessarily harsh for it to work. HOWEVER, inequality that is so stark and dramatic hurts society. My position is that everyone should have the right to the basic necessities of life (as FDR was a proponent of [1]).

As a person from the lower classes, I'm fine that people live like kings and I don't. If I really want that life, I should have to work very very hard for it. What I'm not cool with and despise is having the fear of homelessness and hunger held over my head so that I am forced to dance for my rich masters. In an age of exorbitant wealth and excess, this is getting ridiculous. At the rate we are going, in the future we will have people owning planets with colonies of robots and still have starving people. At what point do we say enough is enough?

[1] https://en.wikipedia.org/wiki/Four_Freedoms

I agree so much with this. I really find the focus on inequality weird and sort of childish. Complaining about inequality strikes me mostly as an attempt to sublimate envy into a politically palatable narrative. What we really ought to focus on is not reducing "inequality", by pulling the ceiling down...but raising the minimum standard of living by pulling the floor up. I think UBI is an excellent way of doing that, but there are many.

Wealth inequality is the main cause of power inequality, and is thus a major reason why something like UBI won't happen just because it benefits poor people.

You can't make the world better if you are powerless, and you are powerless so long as you can be overruled by those with more wealth than you.

> Wealth inequality is the main cause of power inequality, and is thus a major reason why something like UBI won't happen just because it benefits poor people.

Poor people seem pretty powerful to me. In a world where rich people are infinitely powerful...what percentage of tax revenue do you think they'd be paying? 0%? 10%? The top 3% if earners paid over 50% of income tax in the US in 2016 [1]. That doesn't seem particularly powerful to me. Or, if it is, that power isn't wielded especially self-interestedly.

> You can't make the world better if you are powerless, and you are powerless so long as you can be overruled by those with more wealth than you.

Your inferences are correct, but your premises are wrong. And if you're worried about money influencing politics, well, i've got news for you: reducing wealth inequality is just going to make the influence of that money even less transparent than it is now.

1. https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-...

> Poor people seem pretty powerful to me. In a world where rich people are infinitely powerful...what percentage of tax revenue do you think they'd be paying? 0%? 10%? The top 3% if earners paid over 50% of income tax in the US in 2016 [1]. That doesn't seem particularly powerful to me. Or, if it is, that power isn't wielded especially self-interestedly.

Oh, give me a break. This is silly statistic often dragged out by right-wing pundits. If the entire US population earned $0 and one guy (pick anyone!) made $1 Trillion per year and paid his ~$400 Billion in taxes each year would you see him as a victim, too?

Another silly example: New York, California, and Florida contribute 25% of the U.S's tax revenues, yet they don't account for 25% of congress. They don't get 25% of the electoral college votes in presidential elections. Poor them, right?

> Oh, give me a break. This is silly statistic often dragged out by right-wing pundits. If the entire US population earned $0 and one guy (pick anyone!) made $1 Trillion per year and paid his ~$400 Billion in taxes each year would you see him as a victim, too?

Did I say anyone was a victim? No. You made a specific point: That the wealthy are disproportionately powerful due to income inequality. My point is: They don't seem to be powerful enough to not pay the overwhelming majority of taxes. I didn't say they were victims, or that they shouldn't be paying more in taxes. It was a counter-example to your point.

> Another silly example: New York, California, and Florida contribute 25% of the U.S's tax revenues, yet they don't account for 25% of congress. They don't get 25% of the electoral college votes in presidential elections. Poor them, right?

Well, actually, I would argue that yes, poor them. California and NY should be better represented in Congress and nationally, through electoral college reforms and other things, but that is pretty far afield from this discussion.

"How much tax you avoid" isn't a reliable measure of political power. Firstly, if paying taxes can work in their benefit, then there's no reason they shouldn't pay them. Secondly, "I pay your wages" is a pretty good way to influence people, and I don't see why it would fundamentally be different in congress. Thirdly, wealthy people do have more ability to avoid paying taxes. Thus the concept of "Tax havens."

> "How much tax you avoid" isn't a reliable measure of political power

Erm, is it not? Do you think rich people enjoy paying taxes? I don't. The fact that the poor manage to force them to pay the overwhelming majority of taxes, in order to subsidize social services that they don't even consume is a tremendous defeat for them.

> Firstly, if paying taxes can work in their benefit, then there's no reason they shouldn't pay them

How do they work in their benefit? And secondly, why is it to their benefit to have a progressive tax system? If I were a rich person that could set the rules by fiat, i'd say "sure we should have income taxes, we should all pay a flat tax of 20%". And in fact, you see many rich people and libertarian organizations advocating for exactly this. They get precisely zero traction, because they don't have the political power to do it.

Well, gee. You got me. I guess all those rich people would just move to Somalia and pay no taxes, but they can't do it because they have no power. Poor them. Having to pay taxes to participate in a society that secures their massive accumulated wealth. What could possibly be the value in that, I wonder.

Why do you keep trying to argue against a straw man? I'll say it again: I'm not saying they're victims. I'm not saying that they have less power than they should. I don't feel sorry for them. You made a specific claim: That they had a massive amount of power. I made a counter-claim: That if that were true, they'd be paying less in taxes. Do you have a response to that? Because it seems like you don't.

They are paying less in taxes. US tax rates have been dropping for almost 70 years.

You're still dodging my point.

There’s a huge difference between the “I’m a young single college grad making $50k a year and billionaires are the reason I’m poor” narrative and literally stepping over potentially dead unsheltered people on your way to the office of a multi-billion dollar company. How can we make sure that people don’t have to sleep on the street and suffer from poor healthcare? Because currently income inequality is creating developing country, slum-like conditions in the US.

> There’s a huge difference between the “I’m a young single college grad making $50k a year and billionaires are the reason I’m poor” narrative and literally stepping over potentially dead unsheltered people on your way to the office of a multi-billion dollar company. How can we make sure that people don’t have to sleep on the street and suffer from poor healthcare? Because currently income inequality is creating developing country, slum-like conditions in the US.

How, exactly is income-inequality creating those conditions? It seems to me like the issue you're describing is one of a floor that is too low. Which is exactly what I said.

> How can we make sure that people don’t have to sleep on the street and suffer from poor healthcare?

The first step is a cultural change. I believe the ball is in the court of the writers, musicians, philosophers, poets, celebrities ... people involved with shaping culture. To give an example of how how toxic our culture has become, I'll recount something that just happened 30 minutes ago.

There's this nice old lady near my hackerspace who operates a small food cart. Not many people visit her because where she's allowed to be is laughably secluded, so she mainly sits there all day waiting for customers. Another member of the hackerspace said he was going to Wallgreens to get a candy bar and asked if anyone else wanted something.

I said: "Hey, there's the food cart lady who has that stuff and she's just a 1 minute walk away, instead of the Wallgreens which is 10 minutes away."

Upon hearing this, another member grunted with disapproval. I asked what was up.

He said: "She sold me a disgusting sandwich, you shouldn't support a business that is run that poorly."

I replied: "She's an old lady! Did you give her any feedback on the sandwich, maybe she can improve?"

Him: "A business run like that is beyond help."

I'm still shocked how this person couldn't even see past the business into the person. This is a huge problem I see: we forget we are dealing with people because we classify them simply as objects of utility. Our consumerist abstractions are causing us to be quite nasty to others.

Unfortunately the issue with inequality is that it breeds more inequality.

Someone born into the .1% will continue to get richer and richer by literally not doing anything while others on different parts of the spectrum aren't in a position like that and many have negative assets.

If the playing ground was equal at birth and people were differentiated based on their hardwork no one would complain. The issue is the playing ground is not level and every day it gets more and more skewed.

> Someone born into the .1% will continue to get richer and richer by literally not doing anything while others on different parts of the spectrum aren't in a position like that and many have negative assets.

What you're talking about here is wealth mobility. And I think we should definitely be talking about policies to promote that. Especially in the upwards direction.

We can't talk about this without talking about the inequality in wealth which is the biggest factor in economy mobility unfortunately.

> We can't talk about this without talking about the inequality in wealth which is the biggest factor in economy mobility unfortunately.

That's an interesting theory. How does that work, exactly, though? How does wealth inequality squash income mobility? And if income mobility is the real goal, why are we talking about inequality, and not directly talking about mobility?

Honestly, I'm not an economist. But from what I've gathered from reading various opinions on this matter is that economic inequality is the main source of weak economic mobility in developed countries - especially in countries that don't have safety nets.

The theory essentially is that strong economic mobility requires some "base" value of economic power.

If you're born into a family with negative assets, thousands of dollars in credit card debt, bad neighborhood you're essentially starting your life with negative economic mobility and turning that positive is extremely difficult given the circumstances and in many cases you stay poor. For example, the effects of redlining is still seen to this day after nearly half a century has passed.

On the other end, if you're born into a family with a strong economic background and proper investments. You're already starting your life with positive economic mobility.

The way to think about it is, if you're on the bottom of the graph in terms of assets, you're going to be going further and further down (until where is the question?) and if you're on the top of the graph you're going to keep going up.

College, various inheritance taxes, social safety nets, etc etc try to offset these differences by essentially making the top of the graph a little "weaker" and boosting the bottom of the graph. But is it working?

I agree with all that, but doesn't that mostly argue for shifting the bottom up, rather the pulling the top down? What I see is people using the word "inequality", but then talking about poverty. Poverty is bad. But I don't really understand why the ratio of the top to the bottom is the important number, rather than the absolute value of the bottom.

The vast majority of wealthy families lose it within three generations.

Growing your wealth requires taking on risk: your investments may not turn out well.

Where does that info come from? I went to school with people whose wealth can be traced back more than 20 generations. They didn't seem to getting poorer.

Exactly this. It's extremely difficult to lose your money at that stage.

Here is some data showing 70% by the second generation and 90% by the third:

https://www.google.com/amp/amp.timeinc.net/time/money/392530...

Perhaps you just met some of the exceptions.

Do you have data that isn't a blatant ad campaign consisting of pithy statements from a wealth management company trying to scare people into letting them manage their money?

"The richest families in Florence in 1427 are still the richest families in Florence"

https://qz.com/694340/the-richest-families-in-florence-in-14...

Something like 65% of all land in the UK is owned by the same families that owned it in the Norman conquest. 0.3% of the population today. Since 1066-1100.

The stat you quote may apply to some broader definition of “wealthy”, but for the true 0.1% - 0.01% it is truly eternal, and accelerating.

If the playing ground began equal we’d still end up with power begets power. People might just feel better about one inequality over another.

Meritocracy and egalitarianism are in hot tension. Capitalism and democracy are in similar tension.

You might want to pay closer attention to the complaints about inequality. What that focus is about is the degree of inequality.

Most people talking about it are not actually pursuing a world of absolute equality, but a world with reasonable levels of inequality, and with regulations that make a rapidly increasing spread less likely. I.e. we want floor and ceiling not too far apart, and not rapidly separating. Which means UBI alone, or minimum wage, or any number of floor-focused things are not the answer. Neither is a wealth tax, or any number of ceiling focused things the answer, by themselves.

> You might want to pay closer attention to the complaints about inequality. What that focus is about is the degree of inequality.

I pay quite a bit of attention to it. I'm aware of what it is people are complaining about. Everything I said stands.

> Most people talking about it are not actually pursuing a world of absolute equality, but a world with reasonable levels of inequality, and with regulations that make a rapidly increasing spread less likely. I.e. we want floor and ceiling not too far apart, and not rapidly separating. Which means UBI alone, or minimum wage, or any number of floor-focused things are not the answer. Neither is a wealth tax, or any number of ceiling focused things the answer, by themselves.

Why? What's good about that? What, exactly, is the benefit we get from pursuing a flat wealth distribution? People often promote this idea, making the implicit assumption that reducing inequality is somehow a good in and of itself.

The point of these things should be to improve the material living standards of as many people as possible. If reducing inequality is a necessary side effect of doing that, then fine. But I see no reason to pursue that as an actual ultimate goal.

The notion of "value" pursued and optimized by our economy is proportional to wealth. Feeding a starving poor person has no economic value, but helping a rich person drain middle class retirement accounts has enormous economic value.

To the extent that the wealth distribution is unequal, our economy will ignore real, pressing issues among the poor in order to focus on the increasingly esoteric "needs" of the wealthy.

That's why absurdly lopsided wealth distribution is a problem.

> The notion of "value" pursued and optimized by our economy is proportional to wealth. Feeding a starving poor person has no economic value, but helping a rich person win the game of thrones / bank accounts has enormous economic value.

If you feed a poor person so that they can get a job and contribute to society, that generates quite a lot of economic value. But yes, you're right, giving away food does not increase GDP on its own. But then, neither does zero-sum wealth transfer.

> To the extent that the wealth distribution is unequal, our society will ignore real, pressing issues in order to focus its energy on silly zero-sum pissing contests among the few individuals that matter according to said distribution.

Is that so? That must be why our technology looks the same today as it did 100 years ago. Or 50 years ago. Or 20 years ago. Or 10 years ago. All those zero-sum pissing contests.

> If you feed a poor person so that they can get a job and contribute to society, that generates quite a lot of economic value.

Not for you. Feeding a poor starving person does not make you richer. If they could have afforded to pay, they would not be starving. The economy fails to incentivize the satisfaction of a real need because it does not value the needs of those without money.

That, of course, is an extreme example, but the same principle applies to all the shades of gray.

> Is that so? That must be why our technology looks the same today as it did 100 years ago. Or 50 years ago. Or 20 years ago. Or 10 years ago. All those zero-sum pissing contests.

Any system of power can lay claim to the products of the society it governs, but I have always found those claims wanting, because there are so many other factors involved. Technological progress in particular. Capitalism's advocates are really good

The notion of incentivizing people to do important work is not unique to capitalism. Capitalism is not even particularly good at it, and is getting worse at it, as inequality in the wealth distribution drives capitalism's notion of what is important further and further away from what most people actually find important.

Capitalism on a somewhat level-ish wealth distribution is great: everyone gets a say in what's important. Capitalism on a super skewed wealth distribution is not great: only the lucky few get to say what's important, and everyone else is ignored. The wealth distribution is the problem, and policy to make sure it doesn't run away is going to be the eventual solution.

> Not for you. Feeding a poor starving person does not make you richer. If they could have afforded to pay, they would not be starving. The economy fails to incentivize the satisfaction of a real need because it does not value the needs of those without money.

It does not value the needs of those who have not contributed to its largesse. You are valued in proportion to your contribution, or the contribution of your parents.

> The notion of incentivizing people to do important work is not unique to capitalism. Capitalism is not even particularly good at it, and is getting worse at it,

Capitalism is certainly the best of any system i'm aware of. Is there some other system you're aware of that's done a better job of producing innovation?

> as inequality in the wealth distribution drives capitalism's notion of what is important further and further away from what most people actually find important.

Hm? Away from what most people find important? How do you get people's money if you're not offering them something in exchange that they find important?

Is the degree of inequality really the issue though? Personally, I like that there are people like Jeff Bezos who can personally fund a space company.

The real problems, for me, are the power imbalances (lobbying, corruption, tax evation by rich people), and rent seeking (e.g. owning real estate or entrenched businesses).

Power imbalance is directly created by the insanely rich. Bezos bought an entire newspaper. Sheldon Adelson buys his politicians more directly, but same difference.

And rent seeking is what enables the imbalance. Without rent-seeking, it'd be much harder for the gap to widen (because rent seeking captures wealth creation for the benefit of the rent seeker)

And of course, the two feed into each other - power imbalance allows for lobbying, creating opportunities to obtain rent. Which, in turn, widens the power imbalance.

Maybe you could theoretically fix those two without addressing inequality. I don't know. I suspect it wouldn't work - if you truly fixed power imbalances and rent seeking, I'd wager you'd address wealth disparity too.

I'd see all of them as tangled in the big hairy cluster that is laissez-faire capitalism.

When people focus on inequality, are they doing so because they love the poor and want to do something for them, or because they hate/envy the rich? Too often, it's the latter.

Instead of UBI, a negative income tax is a much better approach. There's a lot of info out there about it, but here's a nice intro:

https://m.youtube.com/watch?v=xtpgkX588nM

In some ways we already have that with the earned income tax credit: https://en.m.wikipedia.org/wiki/Earned_income_tax_credit

Ya, the EITC is a negative income tax. But it should probably be expanded, it's a great policy.

> Ya, the EITC is a negative income tax

EITC is a hybrid normal and inverse means-tested, and also behavior (by source of income) tested, welfare program managed through the tax system that was loosely inspired by negative income tax, but it is not actually a negative income tax.

Aka a form of negative income tax.

>As a person from the lower classes, I'm fine that people live like kings and I don't

>What I'm not cool with and despise is having the fear of homelessness and hunger held over my head so that I am forced to dance for my rich masters.

Being lower-class is a big part of my identity due to being the poorest kid in my class that I was aware of. Yet I grew up in a relatively well-off neighbourhood in a well-off country. I never went hungry. I never went cold. I even got a few luxeries like modern video game systems from well to do relatives. When I see the "We are the 99%" rhetoric it strikes me how much people focus on the few people richer than then and how little they focus on the many people poorer than them. I've looked at the numbers and in a world with perfect equality westeners would be poorer. There seems to be a lot of self-serving self-victimization with a lot of the fuck the rich rhetoric.

Yet I know that even if you aren't suffering grinding poverty being RELATIVELY poor on a local basis is really hurtful and isolating. It destroys you socially. You can't do what your peers can do and have to stay home. It makes you less attractive to the opposite sex. It hurts your quality of life. It limits your ability to change this. It makes it so merit becomes less and less connected to success.

I know that a lot of people even poorer than me are suffering. I know the people most able to afford to address these problems and those least needing for money are the wealthiest in society. I also don't see the growth of inequality as sustainable. We're at gilded age levels of inequality and things are still getting worse. It's going to lead to more and more social unrest.

This resonates with me. I tried explaining this to a relatively new friend recently and he told me "That's your white privilege talking".

People don't seem to understand that suffering is relative, and if you grow up poorer than your peers, it's still hurtful.

No I have to decide which will be better for my kids, the oldest of which is reaching school age. Bottom of a middleclass area or top of a lower class area.

I don’t understand. You were saying you didn’t have as much money as your nearest peers and it was hurting your social life and making you insecure, and they handwaved it away as privilege??

The replacement of class politics with bloated Imperial multi-ethnic racial politics.

Often cheered by those who have never experienced actual hardship ie Homelessness, precarity mindset of being low income, being rejected at interviews because you have to use old clothes, social isolation of the lower classes, etc

Or to put it more crassly, the poor of America aren't "sexy". The poor of 3rd world nations? HOT. People who individalize their suffering by adopting "identities" (gender, sexual, racial)? HOT. The couple sleeping in front of the boutique candy store? TOTALLY NOT

Yep, "white privilege" to be precise, and that was the first time I'd heard the term. I was pretty surprised to hear it considering he knew I only had 1 parent growing up.

Your friend is not wrong but they were still being toolish about it. You mentioned your struggle, your problem; and instead of trying to commiserate they basically said "it could be worse". Know how you feel, most people can't relate with my life experiences either so in the past when trying to discuss them I received similar levels of dismissal. Something I realized though is that it goes both ways: in the moment they said " that's your privilege talking", you had a window to turn the conversation back to them, to ask about their experiences. Of course that direction for a convo isn't always appropriate, or it may be asked too awkwardly to get a thoughtful response, but I will mention those times I shut up and opened my ears were some that broadened my perspective the most.

Def agree. Dave chapelle said it best. If you grew up on the hood where everyone was broke, you didn’t feel as bad cuz you didn’t know any better.

But being a lower middle class kid in a rich neighborhood, even if you we’re better off than the kids in the hood, everyday at school you are constantly reminded of how poor you feel, more so than the people in the hood.

> Yet I know that even if you aren't suffering grinding poverty being RELATIVELY poor on a local basis is really hurtful and isolating. It destroys you socially. You can't do what your peers can do and have to stay home. It makes you less attractive to the opposite sex. It hurts your quality of life. It limits your ability to change this. It makes it so merit becomes less and less connected to success.

I understand and this is a good point.

I have further anecdotes from being friends with an African American kid who lived in the government housing area in my town -- which I visited on occasion. Even though these people lived in decent houses, with all their basic needs being met by the state, there was a dramatic feeling of depression and anger there. What did their future look like? They didn't feel like they had any way to work within the system, so they turned to degenerate preoccupations. When you feel like the system "isn't fair," you are inclined to say fuck the system. This impacts African American's the most because not only do they see the system "isn't fair" today, but that it was really not fair in the past. The fact that it has improved dramatically isn't a saving grace for many.

I understand some of the problems of inequality, but I can't imagine it ever being different. Equality is in line with my morality, but I'm not a dreamer. Humans aren't angels. I do believe we could win the fight for securing the basic necessities of life as a right, but equality is a utopian fantasy. There is a certain level of suffering we must accept as being an unavoidable consequence of our nature.

Indeed. It becomes a self fulfilling prophecy when the most disadvantaged members of society have no other means to advance other than illicit activities and then those statistics are turned around and continued to be used against them. It's depressing that plenty of people fall for it, citing "the numbers" as evidence for thier hateful claims.

Yea I think it’s extremely exacerbated inequality that’s a bigger issue than inequality itself.

Total equality will never be a thing, but we don’t need to live in Banana Republics either I don’t think.

That being said, without the Bezoses and Gateses, would people have that drive for greatness only to end up upper middle class?

>>As a person from the lower classes, I'm fine that people live like kings and I don't.

The problem isn’t that they live like kings. The problem is they live like kings, and want to live like emperors. And their way of doing this is to put immense pressure on politicians and stack the system even more in their favor. Tax cuts are a great example of this. Who ends up paying for those? People like you and me.

> The innovative pressure produced by inequality is something that should not be unappreciated

Citation needed. Find me 10 famous scientists that were trying to get rich.

If there weren't pathways for the application of scientific knowledge to people's needs, there wouldn't be as much funding for it. Science thrives today because people have used it to solve many problems, which generates massive wealth.

> inequality probably hurts society overall

Inequality does not hurt society, lack of social mobility hurts society. If we had a society as equal/unequal as we have today, but had perfect social mobility inequality wouldn't be a problem.

Politically this is a very hot topic and people are becoming increasing hostile towards rich people. I don't think there should be a problem with people getting rewarded by outsized sums if they create a business or add value in whichever way. I do think there should be limits to the amount of money someone can inherit - should it be possible for someone to inherit 10 billion dollars? that just seems too much.

> inequality probably hurts society overall

This suggests that if I find a gold nugget while hiking, somehow that hurts society?

Inequality benefits society overall. It provides a motivator for people to improve their lot, thereby indirectly improving the lot of many others. (For example, in the 90's the newspaper reported that Microsoft had created 10,000 millionaires in the Seattle area, exclusive of home ownership.)

Edit: I think it's ineffably sad that whenever I post that people can better themselves, that life isn't totally random, one has choices, I get a strong negative reaction.

The problem with this mentality is feedback loops. If money flows to those who own things more easily/readily than those who do things, society will be heavily stratified despite any individual efforts to improve one’s lot.

Easy fix.

Earn money by doing things(wages), then buy things that make you money (retirement account, etc).

Except the people that have lots of money already will always outearn you on average.

Most people in Germany lost everything in WW2, I mean everything. They were reduced to beggars.

But it wasn't long after the war ended that the people who had money before the war had money again, and the people who didn't before, didn't again. I.e. some people know how to make money. They make their own luck.

Well, I mean the government insists on only allowing rich people to invest and prevent poor people from doing the same, so the claim that his mentality is what's concentrating wealth while the government's own policies get away scot free is rather silly.

Anyone can invest. At robinhood.com, you can even buy just one share of stock for no commission. I know a person who scrimps enough to be able to buy one share of stock per month.

That's not what I'm referring to at all. I mean if your friend has a company and wants to take his company public, he can only sell the stock before the IPO to 'accredited investors', thus concentrating the bulk of the profit potential to those who are already rich. It's not just pre-IPO sales but many other investments. For example, if you live in a poor neighborhood and your friend owns a successful restaurant in your neighborhood, he cannot seek investment from you. Instead, he has to seek investment from a rich person, because the government does not think you are smart enough to invest in your friend's business. this again literally takes money from the poor and hands it to the rich.

The restrictions are completely onerous. Someone I know was soliciting investments of $25k for a business he owned in the community. I had the money in cash, and I was perfectly happy to lose it all (but hopefully I'd make some money). I believed in the business and wanted in. However, since I did not make $200k / yr, and I didn't already have $1m in wealth, I was not allowed. Why? At the time I was taking monthly vacations to Hawaii, New Orleans, skiing, etc. I was eating out every day. I was basically living a life of luxury. But, because of the amount of money in my pocket book, I was barred from taking one potential leap from the working class to the wealthy class. On the other hand, an already wealthy man would be more than allowed to invest.

Of course, I could invest in the public stock market, but the fact is that the public stock market forces people to only invest in certain companies. Many people feel skeptical towards companies over which they cannot directly observe.

Obviously, I understand the stock market exists, but if you think stocks are the most lucrative investments, you have a lot to learn about the financial systems.

> if you think stocks are the most lucrative investments

I didn't say that. But they are the easiest to get into and it's a level playing field (all the info you need about companies is online). Few will deny that early investments in MSFT, AMZN, etc., were incredibly lucrative, and anyone could have invested in them.

As for the minimum investment thing, that came about because of endless lawsuits people bring over failed investments claiming they had no idea what they were doing and need a nanny (i.e. the government) to hold their hand. I don't advocate such restrictions, so don't hang me on it.

> you have a lot to learn about the financial systems

I've done tolerably well investing in stocks, and so as you can see I talk about what I know.

They may be lucrative but since the same people were denied access to the more lucrative investments it should come as no surprise that the growth of their capital is less than the growth of capital of the rich.

This is not rocket science. Piketty says that when r > g, that is, when return on investment is greater than rate of economic growth, the rich get richer. It is not much of an extrapolation to conclude that if R > r, that is, when the rate of growth of capital of the rich people investments is greater than the rate of growth of capital of regular joe investments, that the rich also get richer

I am well aware of the reason the rules are in place. But in the same way the government cannot ban poor people from starting their own businesses, neither do they have the right to restrict investment by rhe poor. The governmebt simply has to put up with the lawsuits or declare by statute that certain behaviors cannot make someone civilly liable.

Im sure youve done well in stocks. I have too. However, given my time working in management consulting, i can assure you that you could be doing a lot better if you were allowed to invest like the rich do.

> They may be lucrative but since the same people were denied access to the more lucrative investments

Do you realize how much MSFT and AMZN went up since their IPO?

> neither do they have the right to restrict investment by rhe poor.

We can agree on that point, at least. Ironically, the government encourages the poor to invest in lottery tickets, which are not even investments, but straight up gambling.

> Do you realize how much MSFT and AMZN went up since their IPO?

Yes. But this is irrelevant! The point is that there were other, better-performing investments that the poor could have chosen. That doesn't even address the ethical question of whether it's right to restrict the already disadvantaged from the very mechanisms of wealth creation open to the rich.

If you're talking about the "accredited investor" rules, I believe that those are both intended and have the actual effect of protecting poor and middle income people from scammers (by making the exploitation of them with some fantastical get-rich-quick scheme into a specific federal crime).

Does it also prevent them from investing in Facebook in 2004? Yes it does.

> If you're talking about the "accredited investor" rules, I believe that those are both intended and have the actual effect of protecting poor and middle income people from scammers (by making the exploitation of them with some fantastical get-rich-quick scheme into a specific federal crime).

Yeah, so the thing is that the wealth of a lot of the people with inherited wealth was made via investments by ancestors for whom a similar investment today would be illegal.

It is certainly true that many people lost a lot of money through bad investments before the accredited investor rules. It's also true a lot of people made a shit ton of money. The issue now is that today, they have the effect of ensuring that only the rich can invest in the most lucrative investments.

The Pareto Principle is a bitch. There's no way to remove inequality without trampling on the rights of the few lucky people.

|If money flows to those who own things more easily/readily than those who do things

The vast majority of people with a lot of money are doing things. They are not idle, and it is not through idleness they wound up in their position. At least in the US.

This is doubly true for their money. It's not in a big swimming pool for them to paddle around in Scrooge McDuck style. Well, at least, most of it isn't.

Is luck a good criteria for some people having more and other less?

At the very high end (top 10, 1, 0.1 percent of incomes), is progressive taxation on income a tax on lucky breaks more than any other factors?

(other factors = intelligence, hard work, lack of bad luck like disasters, unexpected medical bills, etc.)

|other factors = intelligence, hard work, lack of bad luck like disasters, unexpected medical bills, etc

How many of those can you attribute to luck? Winning the genetic lottery is one of the best things you can hope for. You have no control over it, and it greatly influences your outcomes. Born stupid and ugly? Tough luck, maybe in another life.

If you want to be the best cyclist in the world, training for it isn't enough, you need that extra 1% advantage genetics.

But for most everything else in life, you can be plenty good at what you want to do if you're willing to train for it. You don't have to be the best programmer in the world to make quite a good living by programming. It's hardly necessary to be the best businessman ever to run a good business. Etc.

Oh, and on the internet, you can be ugly as a mud brick and it won't have one iota of influence over your success or failure.

Maybe take inventory and look at what you can do, rather than obsessing about not looking like Keanu Reeves. Even so, Peter Dinklage, Danny DeVito, Kathy Bates, Bette Davis, are not the beautiful people. I've met a few movie actors in person, and without the makeup, lighting, and director, they look like ordinary schmucks.

I think you missed the point my post. I'm not one of the people on this board that like to decry success as just being a principle of luck, like it's some kind of lottery.

We're specifically talking about the wealthiest people in the world. The people who got that 1% advantage. I apparently made a mistake in describing those people as lucky (just meaning that there are only a handful of people that will sit at the top, so being one of those people is lucky; it's against the odds).

My whole argument is you can't just take their shit because you want it, and them having a lot of shit isn't a sign that they've done something wrong that allows you to trample on their rights. I think people concerned about inequality have lost the plot. Instead of helping people pull themselves up, they focus on taking from those at the top. Granted, we'll all be more equal financially, but it's hardly a utopian outcome, and no one's lot will be improved, only worsened.

The vast majority of people doing things do not have a lot of money.

Right. The Pareto principle is the observation that large amounts of resources tend to consolidate in a few 'hands'. It's observed in natural systems as well as human created ones.

So, back to your original point. You seemed to be saying that in order to reduce inequality (a good thing), you must trample of the rights of people, specifically the wealthy (a bad thing). But then you admit that it's largely luck which determines whether or not a person is wealthy.

I don't think it would be a big problem to redistribute a small portion of their wealth. Or, similar to what you said in a nearby comment, if society as a whole decides to redistribute a portion of your wealth then "tough luck" (although remember that you are still better off than most when considering how "tough" your luck is). So the original problem with reducing inequality seems to have been solved. It is not a great trespass on the rights of the wealthy to redistribute some of their wealth.

It’s not about rich folks Scrooge McDucking it — it’s that if a rich person does a unit of work and a non-rich person does a unit of work, the rich person accumulates more wealth than the non-rich person as a result of the work. “Rich person work” is “decide how to allocate my capital”, which isn’t an option to many, but for those who have it as an option, it’s vastly more rewarding than actively making things.

I’m not sure that this is a natural state. Maintenance of capital is expensive. It must be defended, repaired, furnished access, etc. These costs are naturally distributive.

Consider that in our society, somebody must be paying the maintenance costs of ownership. Who?

It isn't a natural state. Rigid stratification needs to be maintained forcibly through laws. Free markets are a natural state, and not coincidentally free markets produce lot of mobility.

> This suggests that if I find a gold nugget while hiking, somehow that hurts society?

Yes, if they sell the gold nugget and purchase wasteful goods and services, assuming they would not have purchased those goods and services otherwise.

If you use the money to purchase a tractor so that you can grow more food, then yes, you probably are increasing global productivity. At best, it is unclear whether private jets make you a more productive human and thus increase global productivity given their enormous costs - even if you include the motivational boost that it provides to non-private jet owners who look at the private jet and work harder as a result.

> if they sell the gold nugget and purchase wasteful goods and services

That wasn't the premise. The premise was that Carol hurts Betty simply by having something Betty doesn't have.

When those "things" are increasingly lobbying power, "freedom" to destroy the environment more (travel by private jet, large homes (multiple?) with always-on climate-control, large cars, etc.), Carol does hurt Betty by having these things Betty doesn't.

Nobody is particularly upset by people owning lots of money in a bank account (few speak poorly of Bill Gates or Warren Buffet). It's when people put that capital to use that they get blowback. Koch brothers, Lori Loughlin, Felicity Huffman, and our benevolent President and much of his cabinet are wonderful examples of the absurdities the wealthy do get away with.

I apologize for inferring more than you said, but I do think that the average case of Betty finding a gold nugget or more commonly winning a lottery ticket leads to wasteful consumption. And so it spurred me to give the answer I gave.

> wasteful consumption

People stupidly wasting their money means they run out of it. So what if they dissipate it on hookers and blow. Nothing for you to be concerned about.

Please see https://news.ycombinator.com/item?id=19529624

When someone has money and spends it, other people benefit. Buying that jet employs how many people? Keeping that jet running employs how many people?

Why judge what people buy with their own money? Isn't hard enough to judge what you buy with your own money?

> When someone has money and spends it, other people benefit. Buying that jet employs how many people? Keeping that jet running employs how many people?

It is true that one person's spending is another person's income but that doesn't capture the waste. While wealth isn't a zero sum game, the time of the population as a whole and the low entropy (resources) of this planet is. If you employ someone to pilot your private jet, that person isn't able to do more productive things such as pilot a plane with more people on it. In capitalism, your wallet is like a vote: you get to influence how other people spend their time and how resources are allocated.

> Why judge what people buy with their own money? Isn't hard enough to judge what you buy with your own money?

I'll give the benefit of the doubt for most things. I'm sure people will judge some of my consumption as wasteful. I do think there is a threshold in which we can tell the consumer, "I think you can do better": imagine if you hired a person to burn trees all day - and I'm not talking about slash and burn agriculture or generating power using the resulting steam/heat - just literally burning trees. I'm open to be convinced that private jets are within the threshold but as of now I don't agree.

>if I find a gold nugget while hiking, somehow that hurts society?

If one person controls all the money in the world, would you consider that to be harmful to society?

If so, to what degree would that money/wealth need to be shared for that harm to subside to acceptable levels?

> If one person controls all the money in the world

Finding a gold nugget takes nothing away from anyone else. Wealth is not a fixed pie at all - wealth can be created, which is what free markets do.

It's not about the gold, it's a reductio argument aimed at gaining your agreement that there's some line beyond which inequality is harmful, so the disagreement can move on to the topic of where the line is whether than is inequality even possibly bad.

> If one person controls all the money in the world, would you consider that to be harmful to society?

Probably not since the money would be worthless: why would anyone want to use this money?

The paradox of capitalism. Due to the positive feedback loop of capital it naturally gravitates towards a system where a single individual controls all of the capital, at which point the system has completely collapsed.

In practice it would have collapsed before that point, but for basically the same reason. None of the capital is where it needs to be to be useful. This is why you need stuff like progressive taxes, public works projects, and social programs on top of capitalism, to pull money out of the top and re-inject it at the bottom lest the system get too top heavy.

In other words, the only way to stabilize capitalism is for those with the money-piles to spread it around just enough that those without don't try to take any extra.

Citation needed. If anything, capitalism seems antifragile: individual wealth never seems to last beyond the 3rd generation.

Do you have a source for that, that isn't the pithy unsourced statements from a wealth management company in an ad campaign?

The article itself shows that each Disney generation has less money. The Kennedys are another example. Are the Rockefellers the richest people in America? The Vanderbilts? The Carnegies? The Morgans? The Astors? The Gettys? Nope to all.

The richest today are first generation - Gates, Bezos, Buffet, Musk, Case, etc.

It's a hypothetical question, assuming they have no other option

Inequality, but also mobility. A society with one rich person, or even an oligopoly, isn't going to motivate many people since there are only so many spots. The height of wealth doesn't have much impact either - a person isn't going to work 1000x harder because someone has 1000x more money.

There's also inefficiency - rich people tend spend personal money in inefficient ways that other people can't, such as on private jets, luxury yachts, etc., vs. poorer people, who spend a much larger fraction of their income investing into themselves with medical care and investing in efficient things such as public transport or biking, efficiently sized homes and apartments, or energy efficient appliances, for example.

EDIT: the reason why you get a negative reaction is that you imply that it's good almost everyone to be poor - everyone is motivated to work hard, so that's the ideal society, right? People reacting negatively are thinking what's the point of wealth if practically nobody in society has access to it?

In a free market, everyone has choices. And those choices have consequences for better or worse. It's not about "access to wealth". It's about creating wealth. For example, it's never been less expensive to create a major business. You can start an internet company with a $100 pawn shop laptop. Getting a business license is mostly just filing the paperwork. Accessing the internet is free (from the public library). Accessing a worldwide market is free. Training materials in any subject you care to learn is free. You can take MIT courses for free. Advertising is free. What's stopping you?

If you do really need startup capital, there's kickstarter.com, gofundme.com. (I've successfully used kickstarter.)

You can invest in the stock market for $0 in commissions, even buying just one share.

If you're an able-bodied adult in America, you can choose to get started creating wealth, or you can choose to complain about how unfair everything is and revel in your misery. YOU get to choose. And that's wonderful.

A lot of people aren't aware of their options. That starting a business is super simple is something that I had no idea about, and even the prospect of dealing with bureaucracy and paperwork can make the whole endeavour feel daunting and off putting. There's also financial safety / lack of a safety net - ideally you could fall back to family, but no one really wants to fall back to friends, or worse, no one. This means a lot of people choose shitty jobs over rewarding but risky jobs or endeavor.

And for the stock market, working an average job means you should really be investing into a Roth 401k, though I know some people who invest into realty.

It's kinda like telling a depressed person "just smile and don't let the small things bother you!" Progress can be hard for people for various reasons.

That said, I agree with what some one else said else where, that I mostly actually care about is to make sure every one can afford what they NEED to without going to extremes - I know a person in the military who had to eat of dumpsters to survive as a kid, and someone who was living on the doorstep of their recruiter until they got in. There are places in the US that have third world living conditions: https://www.google.com/amp/s/www.newsweek.com/alabama-un-pov...

As a side, I had brought this up with someone before, and they told me that maybe it's a good thing for children to be hungry and eat from dumpsters because then they'll be motivated and work hard as adults.

Ah, thanks the comment back, I enjoy discussing things with purple who have a different opinion.

> A lot of people aren't aware of their options.

Then I'm happy to inform you, and you can pass it along.

> That starting a business is super simple is something that I had no idea about

It can be even simpler. Go door to door and offer to mow lawns, or clean, or tutoring. When I was a kid I'd mail order candy that wasn't available locally and sell it at school. My brother would tune up peoples' cars in their driveways.

> Inequality benefits society overall.

The data suggests this is not the case. Particularly, when you look at the correlation between the gini coefficient and just about any measure of societal well-being available (life expectancy, child mortality, maternal mortality, suicide rates, many, many morbidities, WVS for happiness and life satisfaction, etc etc), it's quite clear that high level of inequality is inversely correlated with societal well-being[0].

Your argument about Microsoft is an argument about the benefits of capitalism, which I agree is very beneficial to society when channeled properly. However, capitalism is a means to an end, not an end in and of itself.

0. Yes, correlation isn't causation, but even if you assume that high inequality isn't the cause of poor societal outcomes, it's at the very least an indicator that something is going wrong and has a fairly high predicative value.

> The data suggests this is not the case.

Au contraire. The US went from a nation of scores of millions with nothing but a suitcase to the wealthiest nation in the world with the tallest, best fed, and healthiest people. All from inequality.

(Of course, since WW2, the US has increasingly turned away from the free market towards socialism, and things have done correspondingly less well.)

Nothing but a suitcase, centuries of slavery-generated wealth, and a swathe of the world's most resource-rich land ripped from its inhabitants by genocide and forced migration.

Never mind that in the 1800s the northern economy prospered while the southern slave economy stagnated - a proximate cause of the Civil War was the south trying to economically protect itself from the booming north. The War then (literally) burned the slave generated wealth to the ground.

The end of slavery ushered in another great boom in prosperity in the US.

And, of course, attributing US wealth to stealing land from the natives doesn't explain why South America, which did the same thing, failed to prosper and remains a collection of countries people run away from on foot trying to get into the US.

Why do you think it is sad? Negative comment scores on Hacker News provide a motivator for you to improve your comments, thereby indirectly improving the quality of discourse for many others.

Votes on HN aren't totally random, you have choices on what sort of comments you make, and you can better your comments and yourself. Enjoy!

Surrender to the pressure, be a fish!

It's sad because people view themselves as victims of chance with little to no power over their lives, and don't want to hear otherwise.

When I look at my friends, none of them fall into that category. For example, I have a friend who is currently reduced to living in a trailer. He's a serial entrepreneur, alternating between mansions and trailers. I've never seen him discouraged, he just picks up and takes another go at it. He's also (unsurprisingly to me) a heluva lot of fun to be around, always excited about this new venture he's doing.

People who believe their lives are run by (bad) luck never want to hear about the choices they've made, and the choices that are open to them to improve things for themselves. They're boring, sad people.

Extreme inequality does not benefit society. It's a sign that people aren't able to improve their lot, at least not without access to money. In a society where the poor can realistically improve their lot, you don't get people stuck in poverty.

Of course finding a gold nugget doesn't hurt society, but if you own the ground on which other people find gold nuggets, and that means they have to give half of their gold nuggets to you, then they benefit less from their luck, while you benefit from other people's luck. That's how you get extreme inequality.

Of course there's always going to be some inequality. Perfect equality is not something that's realistically possible or desirable, but taken to extremes, it does become harmful.

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