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I have no idea how unequal I am to the people who I see every day

When someone drives past me in a car that I know costs the equivalent of 30 years of my salary I do have some idea of how unequal we are. It's a pretty big clue.

Yes. I wish we would frame these conversations about value more in terms of time. It's even starker when you address it directly:

>When someone drives past me in a car that I know costs the equivalent of 30 years of my life...

Even as a comfortably paid software developer, someone with a billion dollars owns the equivalent of ten thousand years of my life.

Fair enough. So what if I gave you the same car and he doubled his wealth.

Now inequality has increased much more significantly. And you can't tell.

You haven't found a measure of inequality, you have identified that you can't afford an expensive car. Insofar as they are problems, the solutions to inequality and material lack are different from each other.

EDIT And furthermore, if inequality is the major problem, you're arguing you'd rather be in Scenario Now (no car) rather than Scenario Hypothetical (very expensive car). I don't like telling people their opinion, but I'd be shocked if inequality is going to be a factor in your decision making with that one.

That’s not how markets work. If you gave everyone a Lamborghini, the value of a Lamborghini would plummet, so the wealth measure doesn’t move. Also, resources have to come from somewhere, and that has a cost. The theoretical you’ve proposed doesn’t hold up to much scrutiny and doesn’t seem like a useful model.

> ... If you gave everyone a Lamborghini, the value of a Lamborghini would plummet ...

If your argument is that the person with a Lamborghini isn't materially better off in a real sense and that wealth inequality is therefore a social construction then I am profoundly confused if you are also aligned with the article's thesis that pitchforks are going to be involved due to wealth inequality.

The logical conclusion of that line of thought is to destroy the Lamborghini to promote wealth equality, which is stupid.

See also: Aston Martin

You haven't found a measure of inequality, you have identified that you can't afford an expensive car.

It demonstrates that someone can afford an expensive car and someone else can't. That's not a measure of the extent of the inequality (the car owner could be a millionaire or a billionaire), but it's certainly a signal that inequality exists. I know that the inequality is at least someone having enough to spend 30 times what I earn on a car, and could possibly be thousands of times larger than that. That is a measure of inequality insofar as it clearly shows inequality exists. It's just not a very specific one that tells us the extent.

But you've still got no idea how much inequality is present - you've got a lower bound and 3 orders of magnitude error. They might have 30x or 30,000x times. You could take an action, halve inequality, and not be able to detect any changes. If you can halve the problem and not detect any change I don't believe you've identified the problem.

However if you doubled your living standard you'd know all about it.

You could take an action, halve inequality, and not be able to detect any changes.

This assumes that halving the wealth of rich people would have no impact on the world other than changing this immeasurable inequality. That seems unlikely.

Most that wealth was created in the last 20 years. Amazon, Google, etc, etc barely or didn't exist in 2000. If you are >20 years old, you have seen a world where there was substantially less wealth and inequality. It would be very easy to reduce the wealth of rich people by returning to how the business world was in 2000. Pretty sure Bezos of Amazon is the richest man in the world right now.

Destroying the wealth would be the fastest and easiest way to reduce wealth inequality that has built up in the last 20 years. It is a terrible idea. So the problem to solve is probably not wealth inequality.

To try and put it simply, halving the wealth of rich people is bound to have an effect - but that effect might be great or horrific for everyone else.

I feel like I should add an obligatory comment here: cars are a very poor indicator of true wealth precisely because luxury is explicitly designed to convey the opposite.

Now, private jets and yachts...different story.

>> The problem is much more likely that the link between productive work and reward has been completely severed for more than 40 years [0]. If being productive reliably led to being rewarded there would be many less problems. The people being rewarded aren't the people who are producing results. Go look at the late 60s and early 70s to figure out what changed.

I think this is a very good point. I always felt that this was the case when I compared my own generation with my parents' and grandparents' generations.

That's not to say that things were always perfectly fair (especially during my grandparents' time). They never were completely fair, but at least the path to financial rewards was much more clear. The social contracts around wealth accumulation were always challenging to meet (especially for certain groups of people) but they were somewhat reliable in the sense that if you could meet certain skill requirements, or saved a certain portion of your income, your odds of being rewarded were high.

Today, the social contracts which relate to skill and productivity are totally unclear - The only real social contract which is clear is that if you have capital then you can get more capital. Saving-up for something doesn't work anymore because of insanely inflationary monetary policy, you can't buy a house anymore (prices are also inflated) and the investment options which deliver returns tend to be both speculative and unethical (monopolistic).

The number of intelligent, highly educated people who are poor and whose careers are uncertain today is unfathomable. The ratio of poor-productive people to rich-productive people is massive and growing. I don't think this was ever the case before.

The number of rich-unproductive people is constantly growing because they are being selected based on attributes that are not related to their productive abilities. They are parasites on the system. They are enriching themselves by shrinking down the economy through increasing wealth concentration for themselves and their friends. They're earning money not by adding value, but by making it harder for productive people to earn money - This makes them more desperate for money, more vulnerable and more exploitable.

The more rich-unproductive people there are, the less the social contracts make sense and the more people are going to want a reset. There is no limit to mediocrity. There is a point where people will accept an economic reset in whatever form is offered to them (dictatorship, communism, fascism...)

Effort to reward I think sometimes is measured as upward mobility. I agree that this is an important aspect, which needs to be measured. I think they call this equality of opportunity and education. So not everyone gets equal outcome, but all should have equal footing at making it up the ladder.

That said, I think some of the issues are just that we're not even meeting the fundamental human rights. If you read over the UN declaration of human rights here: https://www.un.org/en/universal-declaration-human-rights/ you can see we don't even meet them all.

> If you look out the window of your car (or house) and see homeless people (or mobs) - that isn't inequality.

I don't understand your reasoning. If some people are homeless while others have houses, how is that not inequality?

I've lived in São Paulo, where homeless people can be found on literally every street, while millionaires fly from skyscraper to skyscraper in their private helicopters to avoid the impassable traffic. No-one needs to pore over dry statistics to know that Brazil (to take just one example) has enormous levels of inequality.

If you go out and measure 'inequality', it isn't a measure of homeless vs middle class, it is a measure of homeless vs mega-wealthy. That is a stupid comparison IMO - the gap between the poor and mega-wealthy doesn't matter as much as the actual conditions of the poor.

The homeless vs middle class inequality could easily be much the same as it always has been. The middle class are getting increasingly tenuous in their wealth.

The rich are glad that you believe this, and they wish all of us were so foolish. Focusing all of our attention on the poor is what they want us to do. Meanwhile we'll be ignoring the people whose lobbyists have destroyed our society...

>> the gap between the poor and mega-wealthy doesn't matter as much as the actual conditions of the poor.

I expect that when most people talk about the gap they are referring specifically to the actual conditions of the poor, and not the range of the gap.

Then they don't mean inequality. That is talking about a living standards.

Inequality problems can be very effectively by taking stuff away from the wealthy. That doesn't work for a living standards problem because there isn't enough real stuff for it to work. Look at the real amount of resources consumed by the mega wealthy and divide it by the number of poor people - the results aren't very impressive. Not the paper wealth, but real consumption.

Jeff Bezos for example may make billions on paper, but his actual personal consumption isn't going to be anywhere near that amount in goods and services. Distribute his real consumption to the poor in New York and it won't make much of a difference, especially over the long term. But absolute inequality would noticeably drop. The poor would appreciate it, but it isn't going to solve systemic living standards problems.

I had the impression that the main reason wealthier people in São Paulo use helicopters is to keep their ears in place[1], avoiding traffic jams sure might be a nice plus.

[1] https://www.nytimes.com/2002/02/13/world/sao-paulo-becomes-t...

That too. And it illustrates another reason why extreme inequality is bad: even if you're a total psychopath with no concern for anyone except yourself, it's not in your interest to live in a society with extreme inequality - unless you like the idea of being surrounded by people who have so little compared to you that they're desperate for what you have, and are willing to use violence to get it.

> The problem is much more likely that the link between productive work and reward has been completely severed for more than 40 years [0]. If being productive reliably led to being rewarded there would be many less problems.

You spent paragraphs arguing against the existence of income inequality, then you finally get around to this statement, which is what people are actually talking about when they say "income inequality", and you agree with it. People are unequally rewarded for their productivity. The description of the first resource in your link even begins "Rising wage inequality..."

I live in LA in a house I rent. My morning walks take me by houses that cost up to $5 million, a short drive less than 5 miles I can see homes that are $20 million.

In addition to the houses and the cars discussed--I'm a pilot. I see private airplanes routinely that are capable of taking their owners to Paris non-stop and cost $12 to $60 million.

The trappings of wealth are merely a drop in the bucket.

Try hanging out in the non-rich areas of town and you will immediately understand how the wealthy have been attacking society.

if you look at the graph, it all begins after 1971. that was the year the gold standard was finally abandoned for real.

i am not an expert and don't know all the important puzzle pieces, or even understand them. but looking at our financial systems, i think a big part of the reasons for the problems of our current form of capitalism is the unlinking of fiat currency from any form of backing.

I'm just trying to get my head around this too. I think the basic mechanics of it are:

1) Abolish gold standard, enabling government to print money

2) Government prints money which is captured by large corporations

3) 90% of the population still owns the same amount of money but it's now worth far less because the rest of the pie is having cash pumped into it.

We're seeing a current example of 2/3 with the Coronavirus government stimulus, which went directly into plutocrat pockets while the masses were handwaved away with a token gesture.

that's pretty much my train of thought as well.

trickle down economics don't work like the theories would want it to, just look at quantitative easing and the ECB equivalent. all those cheap loans to banks never ended up in the real economy

Yeah in principle the money printing could have been used to devalue the assets of the wealthy and redistribute wealth, decreasing inequality. That didn't happen, presumably because corporations captured the wealth in the way that you describe.

Further, it is clear that some of those corporations (e.g. FAANG) are not the "original wealthy", which is often used as part of an argument suggesting that there is a lot of wealth mobility, but it seems incredibly limited to me, and the flow is hardening just as it did before.

>> We're seeing a current example of 2/3 with the Coronavirus government stimulus, which went directly into plutocrat pockets while the masses were handwaved away with a token gesture.

This helps to maintain an illusion of scarcity. It keeps the productive working class desperate for fiat money. The realist is that there is no scarcity of fiat at the top echelons; this is made clear by the high valuation of cryptocurrency projects.

The top 1% has so much free money coming in that they can toss it away some cryptocurrency projects with no effect at all on their lifestyles... And in doing so they also hedge their personal risk against the reality of an unsustainable fiat system of which they are currently beneficiaries.

This doesn't really stand up to the facts. Governments went off the gold standard far before 1971. By this logic the New Deal and WW2 government spending should've caused huge inequality through inflation.

It seems far more about the success of neoliberal policy allowing economic & political power to concentrate. The various ways that concentrated power then kept capturing more and more of the pie can't be reduced to a single simple narrative.

You have for example:

* Tax cuts

* Unregulated Monopolies

* IP law

* Owned Media

* Unlimited Campaign donations

And on and on.

I don't think what you're saying here disagrees with my theory. You're describing the mechanics of the second half of part 2 ('which is captured by large corporations').

As government policy is restructured to concentrate more and more wealth at the top, the rest of the economy slowly becomes illiquid and the government has to keep printing money to keep the axles greased. It's unsustainable and we're seeing the endgame now.

Your original post put the blame for inequality on government intervention via money printing.

Govt Inflation -> Inequality.

If only we still had the gold standard then they couldn't cause inequality!

This theory however is contradicted by a bunch of historical data.

There was massive inequality on the gold standard pre-WW1. The New Deal was a huge govt intervention which reduced inequality.

My explanation is that the problem is not government interference in 'free' markets but inequality in power. Economic power via monopolies & weak labour bargaining position AND political power via lobbying, strong parties, gerrymandering.

This power inequality is then leveraged by the powerful to create wealth inequality. The exact mechanisms by which they corrupt the systems to capture that wealth be it inflation or deflation or government handouts or M&A regulations or even slavery doesn't matter. If the systems are controlled by this massive inequality in power then it will find a way to corrupt the rules in powers favour.

So arguing for any particular economic policy is less important than reforming the voting systems, the tax system, the lobbying system and ownership of the media.

What do you back it with though? If the global economy was still linked to gold the the price of gold would be astronomical and cause similar problems to oil. Any country that happened to sit on a gold reserve is suddenly a potential world power.

Although if I remember the price of gold was actually regulated while it was linked to the dollar and after the gold standard was removed the price per ounce went up fast. That sort of control feels like a fiat currency anyway.

Changing the mechanics of the economy will not fix inequality, it is born from corruption in the ruling class. They more they are held to account the more equal society will be.

The real problem now is more and more power lies with entities that are detached from government, and the peoples vote (such as it is) has even less effect on those global entities.