I wouldn't be surprised if most respondents are answering as if the question were about income rather than wealth.
This is all true of course: except that the worry about an ultra-wealthy minority is not that their quality of life is too high compared to your's (it's not) but rather that their POWER is too extreme, since money is power and speech, and that since power corrupts, they MIGHT ultimately work to reduce further the strength of the lower classes to the point that poverty really does become extreme. - Since as Marx shows this is not really in the interest of the upper classes (that is: tyranny and extreme poverty are precisely what leads to a violent reaction by the down-trodden) it may be that, through the miracle of technology's abundance, we will continue on a track where we all have a high quality of life, but only a smaller and smaller pool of people "own" the production engines.
How a world where a few own all the profits, but the masses have what they need to survive looks, we will soon see: but it certainly feels very Brave New World and is, perhaps, inevitable.
Political inertia, the passions of the mob, and the maladaptive incentives facing legislators and bureaucrats are much more potent forces shaping our society than concentrated wealth.
I don't fear this as much as some because I know that elites have always held undue influence, and that has been generally a good thing, with some bad apples throughout. Small numbers of people have always had extraordinary sway in societies. It's just that today, with media and technology, the ratios are larger than ever before.
An interesting article on the subject: http://www.nytimes.com/2010/12/26/business/26excerpt.html?_r...
It would be illegal, unfortunately. The amount of money you can spend on your own campaign is unlimited, the amount you can spend on others is capped.
>"It's just that today, with media and technology, the ratios are larger than ever before."
If you mean that more people can exert political influence, then I agree with you. Something like the Tea Party would have been impossible a few decades ago. The internet allows citizens to organize and exert pressure on politicians like never before.
That said, 99.9% of the bureaucracy is unelected. Changing the thin film of politicians layered on top doesn't have as large of an effect on actual policy as we think.
Seeking office is probably the least effective way for wealth to exercise its power. They do a lot better from behind the scenes, giving smaller sums to many politicians (or threatening to withhold it) to buy influence.
Jamie Dimon of JP Morgan is more powerful than either Romney or Whitman, and he hasn't quit his day job or squandered a bunch of his personal fortune.
People want to believe that there is some conspiracy of rich people screwing things up and if there weren't then everyone would have roses and unicorns. But I don't think that's quite right. Sure, entities that have a lobbying budget have a bigger say in policy than people without. But they get to influence a couple paragraphs in a 2,000 page bill. You add it all together and you get a bad bill that squanders public resources on private interests. The bill making process is broken, but that doesn't mean there is a cadre of rich people acting as puppet master.
The United States government is more like a boat where the captain is drunk and passed out than one highjacked by some nefarious pirate.
I think the first part of what you said is right: we will continue on a track where we all have a high quality of life, absent a paradigm shift in which the economy crashes like in Weimar Germany.
The second part of what you said -- about ownership of the "engines of production" -- is straight out of Marxism, which is, by the way, broken. More and more we live in an information economy; it's not about what you own, but what you know and what you can make.
That minor nit aside--who cares who owns what, as long as it isn't stolen from others and as long as quality of life continues to rise for everybody who puts in their share of effort?
What I mean to say is that the most important thing is that the system be fair, and let's be honest, fair does not mean an "equal distribution of wealth."
In fact, it seems pretty clear (especially when "nobody's starving") that what is fair is letting people earn based on their productive capability and effort, whether they're Steve Jobs, an average software developer, or someone with only a high school diploma.
Just kidding, I'd forgotten that fact. Wish I could say I'd worded things as I did on purpose, remembering that.
I don't agree: while it's important to know a lot to be valuable today, the people who are in this extreme high echelon of wealth are accumulating wealth through corporate ownership and they seem to be owning a larger and larger percent of those corporations.
Perhaps what you mean is that corporations, while dominant when it comes to dollars, are not necessarily continuing to be dominant wrt. the human experience. And this I agree with: the internet has opened the wealth of human knowledge to all of us. This freedom and the fact that so many of us spend our days doing what are effectively leisure of artistic pursuits means, even if we're not making money, we're contributing to man kind. And this is true: and not reflected in the wealth distribution, I agree.
The large majority of jobs, while they do require a level of intellect, which may be at times large, are nowadays less dependent on individual thought and more about being able to follow processes and procedures, to the point where the skills themselves are mere commodities and original thought is not needed unless we're talking about the higher echelons of a company.
I can't find the NYT article on the matter, but I can describe my experience as a systems administrator: While in theory Unix sysadmins are highly qualified people who should be thinking independently, I left the line of work largely because of the extreme tediousness and lack of independence.
- 90% of the tasks that had to be done were extremely trivial but their automation had already been maximized (adding users in heterogenous systems, altering filesystems, touching files and installing software)
- Most nontrivial errors were deferred to support lines. Decisions on how to proceed with most "important" issues were left up to project executives and people with no technical qualifications.
- Most change issues were managed through tickets which had a list of steps to follow to the implementer. Most of the work there consisted of chasing the proper approvers so that I could do the work for them on time.
What was left was a highly predictable, boring system where all the originality and intelligence was made at the procedure level, and we were expected to follow procedure at all times, even when it was not necessarily the best choice.
Corporations do not generally want an inspired rank-and-file. Intelligent individuals want to question and are willing to make mistakes, and this clashes with organizations that want to automate what cannot be automated at a fundamental level. My skill set was reduced to just knowing the commands and locations to do stuff; creative problem determination was discarding as being dangerous and disrupting, and even though there were a hundred different ways to improve processes, the bureaucracy to do that made it an incovenience that I was not willing to put up with.
Thankfully I left that position for places that did require much deeper through and rewarded creativity, but the reality is that a large chunk of work simply doesn't require that; some jobs have a ceiling as to how productive one can be, and IMO, the current trend of making everything dependent on processes doesn't help in bringing the best out of people.
Think about this on retail jobs and food services: interaction with the customers is scripted at incredibly deep levels with little margin for the person to make his or her best judgement. The problem is that not everyone is in a condition to leave and operate their own establishment or find better positions, so we have a large mass of people whose skills are being purposely underutilized.
Secondly, despite the information economy, it is still very much about what you own. If you are capable of making something amazing, you still need savings or investors who will feed and house you while you make those things and pay the still significant costs of infrastructure that many products require.
Concentration of wealth matters. That doesn't necessarily mean that government intervention is a good idea.
Most jobs that truly are "trivially automatable" have already been automatized. I think it's extremely unlikely that most or nearly most of Americans' jobs can be replaced by computers in our lifetimes, barring something like the Singularity happening (which I'm not holding my breath for).
Wealthy people will actually own the means of production in a very meaningful way
Like I said, this is a Marxist bromide. Fundamentally, the means of production is mens' minds. Marx mistakenly believed that production amounted to physical human labor + expensive heavy-industry capital (like factories), which leaves work requiring intelligence and skill (MOST work) out of the picture, and is inaccurate - and is becoming more and more innacurate.
those that aren't equipped by their genes, upbringing, or education to participate in the information economy will be unable to earn an income.
Everyone is equipped to participate, barring exceptionally low IQ. Human beings are not automatons; they are not determined by the environment or their parents or their genes; they exercise choice.
Secondly, despite the information economy, it is still very much about what you own. If you are capable of making something amazing, you still need savings or investors who will feed and house you while you make those things and pay the still significant costs of infrastructure that many products require.
Big projects typically require capital investment, but so what? That can be gotten if you have a good idea. Also, lots of people that work in service jobs and don't need heavy capital investment do important, creative work. My point here is that, no, it's not "very much about what you own." Most people in America are doing just fine, especially those with an education, and most people in America did not inherit a trust fund or something.
Concentration of wealth matters. That doesn't necessarily mean that government intervention is a good idea.
If it has no implications, then by definition, it doesn't matter. So if you claim that it matters, you should give an implication.
Food service. Retail. Automobile repair. Lower-end healthcare jobs. Any job that doesn't require creativity can be automated.
Do you doubt that a McDonalds with zero human employees will exist in our lifetimes? When farming and transportation are automated as well and Big Macs are produced with zero human involvement, will you agree that "owning the means of production" is quite possible?
> "...which leaves work requiring intelligence and skill (MOST work) out of the picture..."
You are very, very wrong. Here are the 15 most common jobs according to the Bureau of Labor Statistics: http://www.huffingtonpost.com/2010/10/06/the-most-popular-jo...
3.2% of Americans work in retail sales alone. Those jobs are going away. I count two jobs in that list, elementary teachers and general managers, that will be difficult to automate. What careers do you see this huge group of people switching to?
Please stop bringing Marx into this. It's basically an ad hominem argument. You're arguing against him instead of me.
> "Everyone is equipped to participate, barring exceptionally low IQ."
This is extremely wishful thinking with no evidence to back it up. The incentives for training oneself for a job in the information economy is huge today, yet only half of Americans have completed any college coursework.[1] If all of the people doing menial tasks today are capable of doing more intellectual work, why are they ignoring the incentives that exist today to get them to do so?
> "Big projects typically require capital investment, but so what? That can be gotten if you have a good idea."
Your arguments are skewed by your familiarity with the software industry. The businesses normal people start don't get venture capital. They get small business loans on their personal credit. If you have no credit or bad credit because you're poor, you'll never start a business. Concentration of wealth creates more people who are relatively poor.
> "Most people in America are doing just fine, especially those with an education, and most people in America did not inherit a trust fund or something."
I agree. I've been talking about the future, not now.
> "If it has no implications, then by definition, it doesn't matter. So if you claim that it matters, you should give an implication."
Implications:
1) An almost-permanent upper class.
2) An almost-permanent lower class.
3) (1) and (2) lead to civil unrest.
[1] http://en.wikipedia.org/wiki/Educational_attainment_in_the_U...
I've explained it in detail before when someone made your point, but suffice to say that nobody is going to automate a McDonalds anytime soon.
A robot equal to a human costs $50,000 at least. If you have someone working for $10 an hour, that is 5,000 hours or 2.5 years payback on the robot. And the robot is far less flexible (and $50k is a super low number). When you have 3-10 year pay off on a robot, why would you do it?
Robots really aren't built for menial tasks. Where do you see robots in the auto industry? Painting and welding. Painting is a skill job. Welding is a skill job. A good painter or welder is not making far off of what an entry level coder is making (if you don't believe me, find out how much it costs to weld oil pipeline or ship structure). They didn't take over Detroit to displace cheap labor, they did it to increase quality. The reasons for automation are usually increasing quality or doing something humans physically can't (speed, precision, strength etc). Rarely do you see it worthwhile to replace a human with a robot for a menial hand task.
So no, McDonalds will not be taken over by robots. The economics of it just don't make sense.
Also, McDonalds is open far more than 40 hours a week. It's more like 6am to 1am, seven days a week. That gets paid off in 8.5 months. The real number would be a little higher than that due to fluctuations in demand throughout the day that would require extra robots that aren't fully utilized. Even if you triple the cost of the robot, that still isn't an unreasonable cost/benefit ratio. Within the next 50 years, it will be a no-brainer.
If you think capital itself is a virtue that is entitled to the profits of all labor, then I suppose you are in turn entitled to hold that opinion. So long as the lives of those who are in thrall to capital have a "reasonable quality of life", yes? I won't even go down the road of opportunity inequality here, but I will just say I disagree with how readily you discount environmental factors in the development of people, and how readily you discount the influence of privilege.
Fast food joints could be mechanized. I have a scheme for a nearly fully automated department (grocery/walmart/etc) chain. It would take capital and engineering, but it's a solved problem.
"We engineers" are barely in that top 20% if at all. It's occupied by corporate CEOs, Wall Street bankers, and lawyers: the people who either write or lobby/bribe the people who write the laws (at least in the plutonomy/plutocracy that we call the United States).
"We engineers" don't control the information. We write the tools that do. The people with the money (see above) use the tools.
Statistically speaking, I imagine that the majority of engineers who participate in a successful startup exit (how else is an engineer going to get into the top 10 or 20%?) are still less well off than a great deal of the above "fat cats".
What separates "we engineers", at least those that read and participate in Hacker News, is that, perhaps, we have just a little more potential for social mobility than the rest.
Bring on them downvotes!
But there are conflicting opinions about how predatory the current economic system is. How much wealth is stolen? It's not easy to answer unless you are an ideological zealot.
The only economic system that is not predatory is a free market, which is based on voluntary trade for mutual benefit; any other economic system involves coersion, which is required for something to be predatory. In the current economic system of the civilized world, government holds a monopoly on coercive power, so only the government and those influencing it can be/are predatory.
Among the people who have the most wealth (at least in the US), most of them are prey, not predators, if you agree with my claim about the nature of predation.
If you're going to make accusations, don't hint at them, make them.
You're kidding right? Ever have someone in your family get an unexpected major medical problem while their young and either have no insurance or have the insurance refuse to cover care? That is a quality of life killer!
Or the simple fact that wages for the average person are stagnant or slightly down in the past few decades while healthcare costs are rising as well as the cost of an education. People are realizing that their children are likely to be worse off than they were and that is a quality of life killer!
Have you had a house foreclosed on? Again, quality of life killer!
I can go on, but you get the idea. What exactly do you mean by "quality of life"?
Sure, some people would choose 100 years ago, but a large majority of people, when asked, would rather live a middle-class life today than as millionaires 100 years ago.
Clean water, sewer systems, restaurants, the Internet, television, microwaves, dishwashers, transportation, etc all make a middle-class lifestyle today far better than it was 100 years ago.
1) Loss aversion. I know that I like modern conveniences and would hate to lose them. Psychologically, we place greater weight on losing something than getting something. Maybe I'd be dumb not to give up my microwave burritos for fresh roasted grouse, but the burritos are comfortingly familiar.
2) I'm just guessing about fresh roasted grouse. What ARE the nice features of being a millionaire 100 years ago? I'm probably ignorant about most of them. Maybe people back then would pity me for not experiencing what they did.
3) I'm a bad estimator of what will make me happy. Sure, I like the internet. Does it make me happier, or does it just scratch weird psychological itches? People WANT to play Farmville, but does it make them happy? Maybe I'd be happier having 10 close friends in my neighborhood and no telephone than having 200 friends on Facebook.
The one thing that's hard to dispute is that illness was more likely and more painful in the past. Other than that, whether then or now is better is something I'm unable to judge well. And I suspect the same is true for most people.
You're moving the goal posts a bit aren't you? For starters, those antibiotics will be followed by bankruptcy for the poor person in most cases. And most importantly, that alone isn't convincing me that quality of life for the poor is better than ever. I also didn't mention in my last comment that who is really seeing their quality of life decrease is the blue collar middle class, not the poor.
So? Bankruptcy eliminates debt, which is a good thing for poor folks.
And yes, I've read the studies about "health care bankruptcies" - have you? They counted anyone who had health care expenses, and they included gambling and drug abuse as health care problems.
Right now my girlfriend and I are having a hell of a time with medical bills. She recently started her job, but they won't give her health insurance for the first 5 months. To cover the gap we bought our own individual plan.
So far she has gone to the hospital for an allergic reaction to food she has never been allergic to before, and also needed to see 2 doctors along the way. Total cost is around $1,000 in 2 months, and her individual plan doesnt cover any of it because it was extremely limited. I also needed surgery recently and I've racked up a total of about $1,000 in the same 2 months (thats after my insurance paid quite a bit).
We just graduated college, so we have a sum total of about $2,000 in the bank. We have around $2,000 in expenses a month to live in our apartment, buy food, pay for our cars, etc. Our income is pretty good for two fresh college grads, but we just started so there were the expenses of moving out along with waiting for the pay to catch up.
It wasn't pretty, but we made it through with a $4k loan from my parents (which we have since paid back). Without that, we would be bankrupt or riddled with credit card debt.
Considering we have no kids, our expenses are <$2k a month, and we make decent money, I don't consider us poor. Yet it was just one thing after another that was unusual and unplanned for. If one or the other of us had health issues, it would have been no big deal. If her insurance had kicked in earlier, it would have been no big deal. If she had been able to start sooner, it would have been no big deal. But with all of that screwing us, we got in a bad position despite being extremely frugal and planning really well (how many 22 year olds know to get an individual health care plan to cover the gap between when they are dropped off their parents and their employer one starts. Our only mistake as putting the deductible at $1,000 instead of $500.)
So this isn't an academic exercise. It's not just "poor folks" that you so readily dismiss. Our healthcare system is a freaking mess and anyone denying it hasn't lived through the rough edges. Right now we'd love to have real health insurance for my girlfriend. I would love to put her on my insurance but I can't. Her parents would love to put her on their insurance but they can't. She would love to buy an individual plan that covered more than just catastrophic hospital visits, but she can't.
So maybe you should stop reading the academic studies and start talking to people living in the real world.
I am not that familiar with the US healthcare system. Why can't she buy a different plan for herself? Is it too expensive? Or would it also kick in too late?
They can only deny coverage for pre-existing conditions if she let her coverage lapse.
Are you claiming that your experience is in any way typical?
Are you claiming that the only way to deal with your problem is to change health care for the rest of us?
I realize that $4k is a big deal to you, but the gap between "make decent money" and "our expenses are <$2k month" isn't many months.
It's not just about violent reactions; simply because extreme poverty does not benefit the very rich in economic terms... in fact, it harms them. And some (maybe a few, maybe most, who knows?) of the very rich understand this; look at what Larry Page and Sergey Brin did in establishing Google's charitable foundation. They understood that - in the end - their ability to grow their business requires a population of healthy, productive, engaged people to do Google searches.
it may be that, through the miracle of technology's abundance, we will continue on a track where we all have a high quality of life, but only a smaller and smaller pool of people "own" the production engines.
If anything, technology seems to be making it easier and easier for people with less capital to produce things. In "our world" (that is, computers, software, web-based consumer sites, etc.) it's already possible to build a software startup with a negligible amount of money. Open Source Software and cheap hosting from Linode, Slicehost, etc. have made this stuff way accessible.
And even in the world of physical goods, every time we turn around we're hearing more about cheap 3d printers that make it possible to spit out real world physical items without a big, expensive factory.
Print-on-demand books make it possible to become an author / publisher for almost no cost. And the "print on demand" concept has been applied to other areas... have artistic talent? You can quickly be in the business of selling your art via the Internet, as clothes, prints, etc.
Now granted, doing something like making jet engines or automobiles still takes a lot of up-front capital, but still... I think the trend is towards more and more forms of production becoming more and more accessible to everyone.
http://www.ers.usda.gov/Publications/ERR66/ERR66.pdf
More intuitively, go live in a poor neighborhood. For the most part, the only skinny people you see are the addicts. Everyone else is fat.
I bet most of the people adding weight are actually doing that because they feel starving (majority of American food being too fat and sugary and not nutritional enough).
"We ensured that all respondents had the same working definition of wealth by requiring them to read the following before beginning the survey: “Wealth, also known as net worth, is defined as the total value of everything someone owns minus any debt that he or she owes. A person's net worth includes his or her bank account savings plus the value of other things such as property, stocks, bonds, art, collections, etc., minus the value of things like loans and mortgages."
I also disagree with pg's assessment; I find it hard to imagine peoples minds defaulting to thinking of percentage of income earned (what does that even mean?) over percentages of money and stuff owned.
Income distribution looks quite different from wealth distribution, and is more equal than the estimates in the original article.
[ Household income data from here: http://www.econlib.org/library/Enc/DistributionofIncome.html]
Wealth inequality is much more pronounced than income inequality, especially in the bottom quintiles.
Most people like to spend money now instead of later though, and the charts reflect that. It's as simple as time preference.
{shakes head sadly}
There's plenty of examples of people that win the lottery, only to spend it all within a few years and be back to where they started.
Put it this way: you have a car. Sooner or later it will break. Are you preparing for that? Are you setting aside money to repair and replace it - money that earns you interest while it builds up? Or are you borrowing money and spending all your money on payments, risking that you won't be able to pay rent if your transmission breaks?
OK, if you make minimum wage, this is hard to get out of. But it's possible. Can you live with your mom? Can you drive a worse car? If you can get that thing paid off and get ahead of the debt, get some savings going, you'll be on a moving sidewalk to better finances, less stress and unhappiness, etc. If you're spending everything on a payment, you're on a treadmill pushing you toward bankruptcy.
Yes, it's hard to make do with a small income. But saving is something that really, almost anybody can and should do. Liking to spend money NOW should not overrule our desire not to be thrown out in the cold next month, or our desire to sleep peacefully. There must be a balance, and all but the most destitute can do this. By which I mean "half a cup of rice a day."
Don't take this as an attack -- just as a my personal opinion.