Hacker News Reader

Comment by nemo1618 | Hacker News Reader

Interesting that GINI coefficient doesn't seem to be correlated with happiness (except in Europe, for some reason). Reminds me of Taleb's assertion that people don't resent the rich simply for being rich, they resent rich people who have no skin in the game. Perhaps rich Europeans are perceived as having less skin in the game?

View on HN

The idea that people resent inequality always seemed incredibly sketchy to me. Imagine a super-wealthy country where 99% of population has a yearly income of $200k, and the 1% has an income of $200m. This society would be very unequal, and yet somehow I can't imagine the 99% there being resentful of the rich, voting for populists etc. So, I think that people resent the rich only if they themselves are struggling to get by - but, as soon as their needs would be met, they would stop caring about other people's bank accounts.

Your example would look a bit like this:

The 1% own all of the property in the country, because their purchasing power is so enormous.

One of them earns ten times more than 99 of the others put together.

The 1% turn the screws on the 99% such that $200K actually isn't a high income any more. For example, monopolising land.

Money is just a number. What really matters is the share of resources; there's some sort of Schwarzchild radius beyond which the wealthy turn into black holes.

Isn't this essentially the case already, just that most don't get the $200k? (only partly joking).

You’re describing it as income differences of 1000x. Right now it’s more like 25x although the 1% does hold about 90% of the existing wealth.

The problem is that this kind of thing can’t last long. For many reasons. Affording things means you can pay for the materials, labor, and markup that went into it. If everyone makes $200k, you can’t afford labor costs for anything produced domestically. You can import foreign workers, but then you’ve broken the constraints of the system and suddenly people are poor.

Sweden is, or used to be, sort of like that. Sweden has high wealth inequality and more billionaires per capita than many other countries. But the whole thing is probably imploding now anyway.

I think people misunderstand a bit. It isn't wealth that is the problem as such. It is that wealth is a symptom of inequality. If you for example have good accessible schools for much of the population where having a privileged background doesn't matter much then naturally it will be relatively hard to get rich because there is so much competition.

>then naturally it will be relatively hard to get rich because there is so much competition.

This doesn't follow. The economy is not a zero-sum game. edit: presuming a sufficiently elastic money supply.

It was interesting to me noticing that Saudi Arabia was pretty high on the list for happiness, but they're also known to be pretty unequal and the royalty has an immense amount of wealth.

The idea that people resent inequality might seem sketchy to some or self evident to others.

A better way is to actually ask them how they feel and correlate with gini. Which is what the study did.

Correlation is not causation though.

In this scenario $200k/year becomes the minimum income, since nobody earns less than that. It certainly wouldn't have the same purchasing power in that society as $200k has in the USA for instance, unless you take some kind of globalization effect into account, in which poorer foreign countries accredit this super-wealthy country purchasing power. Wealth is relative.

I strongly disagree. People will always find something to complain about, and something so quantifiably "unfair" as income/wealth inequality will always be among them.

Even if 99% of people earned 200k and 1% earned 250k, there would be talk about how unfair the elite class is and how we need to tax those rich people so much more.

This ignores the social implications of status. So long as having status means exclusive access to certain things (Events, vehicles, housing, mates...) people will compete with eachother to be wealthier. When someone fails to compete they often blame the game instead of their own results.

I thought the same - that inequality isn't having more of an effect on happiness. It seems that the 3 strongest predictors are actually GDP per cap, social support and the freedom to make life choices.

I think increasing GINI might be correlated with GDP growth in most countries (including, Europe, but much let so).

So increasing GINI would correlate with increasing happiness, until you hit the GDP per capita ceiling, and then it becomes anti-correlated.

See my other comment but I've made a new graph where the markers are scaled by GDP per cap: https://kyso.io/eoin/world-happiness-gdp-per-capita-scaled

As the poll question was to rate how high you are in the space of best/worst possible life for you, maybe the scale of imagined possibilities is just narrower in countries with lower social mobility? This hypothesis could be tested, I wonder if someone has done it.

Reply on news.ycombinator.com