The question (the big one that America is super divided over) is which actor is better at allocating goods for public well-being, a billionaire who has proven (probably) they have good business acumen or the government that (ideally) exists to work for the benefit of the people.
I have my personal opinion but I wanted to neutrally (I hope) highlight that this is the heart of the issue.
Especially in the developing world, governments are more likely to piss away money given to them than to invest that money to the benefit of citizens.
If governments were good at investing money communism would have worked. There would be no point having companies like Apple develop cell phones if the government could do it just as well without enriching shareholders in the process. We’d just have a government agency in charge of building cell phones and giving them away or selling them to citizens at cost. We don’t have a private sector for funsies. We have it because we recognize that governments aren’t good at investing money and producing results.
I don't know which approach is better but I know that both roads contain pretty significant dangers and both contain benefits.
Additionally, I'm not particularly interested in going down a path towards communism - the leninist soviet system was an utter failure but germany and scandinavia seem to be doing pretty alright - in fact, on the topic of cell phones, Nokia started out in Finland which is a pretty heavily socialist country. I think there are a lot of options on the spectrum between 1637s Dutch Capitalism and Leninist Soviets - both extremes result in failure and, IMO, all centrist solutions are constantly being pulled toward the nearer of the extremes and need to actively work to stay from slipping into those dark places.
Yes, and Germany and Scandinavian countries are liberal capitalist economies where the means of production are predominately owned by the private sector. In fact, Sweden has more billionaires per capita than the US.
The west does know better. Not because they’re better, but because as a matter of historical accident they stumbled upon a set of winning ideas. Colonialism was bad. But that’s in the past. The choice people in former colonies are faced with is what to do now. And as someone from one of those countries, I think we’re fucking stupid if we reject the west’s winning ideas just because we’re bitter about colonialism. That’s cutting off your nose to spite your face.
People who talk about decolonization make me livid. I’d like to be able to take my kids to see Bangladesh some day without worrying about them getting sick from the water. Decolonization won’t do that. Capitalism, the rule of law, and liberal democracy will do that. I don’t care who came up with it first.
Governments routinely punish the poor for nothing more than being poor. In the US this is done through fees, penalties, licensing, direct taxation, and embedded taxes. Government routinely targets the poor for enforcement efforts because the officials know they cannot afford to fight back, hence why so much forfeiture in the US is of that class.
You can take all the wealth of every US Billionaire and not fix anything because the political class will not fix what is already wrong with their spending. More money just means more likelihood of more money spent wrong.
The only source of wealth that can pay for all the promises being made this cycle is from the middle and upper classes combined.
TWO TRILLION Dollars comprise Social Security, Medicare, and Medicade, tell me who giving them more will solve anything when they cannot care for Americans with two trillion dollars. Worse this is on top of state aid programs and programs coming out of another nearly 1.5 trillion dollars in various aid programs.
The choices are not just between concentrating an obscene amount of money with individuals vs concentrating an obscene amount of money with a handful of bureaucrats.
Why have a system that allows so much money to be concentrated with any kind of entity in the first place and put everyone else at the mercy of their philanthropy? MHO handing all that money to the government instead of a billionaire class is just changing from private trickle-down economics to nationalised ones.
As soon as your having someone deal with billions of dollars a couple thousands become a rounding error and your local concerns become benign, small picture issue. But for you having that 3000 available to finally fix that pothole on your street is critical.
Worker co-ops, taxes on municipal level and wealth taxes might be ways to prevent extreme concentration with any entity.
If it was because they planted the crops, tended the fields, and did all the work to harvest and prepare it, I don't think any reasonable person would complain. We feel like that is a fair outcome because most nations have collectively agreed that owning property is a fundamental human right. In the US it's the 5th amendment.
That depends on whether they are starving.
Hence my point that this is a bad analogy.
1) I am certain there are laborers who get paid more than they produce.
2) Labor never takes the risk of providing capital.
> If it was because they [enslaved or underpaid people who] planted the crops, tended the fields, and did all the work to harvest and prepare it, I don't think any reasonable person would complain. We feel like that is a fair outcome because most nations have collectively agreed that owning property is a fundamental human right. In the US it's the 5th amendment.
All of a sudden it doesn't sound so reasonable and yet comes off a fair bit truer than the original.
However, I believe I've stated more than just slave labor. It's a very relative thing, but it appears many people are certainly underpaid compared to the wealth they generate for the few. It's starting to feel like people in tech believe otherwise because they're compensated better than average and therefore might be "above it all". I think that's alarming and short-sighted.
Would the other 396 look at the elite 4 in envy? Awe? Hate? Appreciation? Would they enjoy the 400 meals in a fairly equal way, or would they fight over allocations? Would the elite 4 encourage fair distribution of the 400 meals, or would they encourage in-fighting among the other 396, causing sufficient turmoil to distract the other 396 from organizing their own elite-and-profitable meals? There are a lot of scenarios that don't end in violence, even if a lot of people leave with a bad taste in their mouths.
I think it's a really interesting analogy, and it might even bolster the author's points about the importance of how elites behave and what systems they promote. It's too bad that the analogy was cut short with a reductionist assertion.
Let's imagine a scenario where 400 people each have $1, the average wealth is therefore $1 per person. If, however, we have 1% of people (4 in the same scenario) have $2 each, the overall wealth is still $1 per person on average, however the 1% would have $2 per person and the remaining 99% would have $0.99 per person. If we skew that a little more, let's have 50% of the total wealth ($200) in the hands of the 1% (again, just 4 people). The average for the population is still $1 per person, but the 1% now have $50 each and the remaining 99% have just over $0.50 each.
I get that this is an exercise in explaining what zero-sum is, something you don't believe this situation reflects, but it's important to recognize that people build wealth by acquiring it from somewhere else. If there was an infinite supply of money (there isn't), then we could have a conversation about this not being zero-sum. I don't think it's a good faith discussion to start with the assumption that money is infinite.
"There are 10^11 stars in the galaxy. That used to be a huge number. But it's only a hundred billion. It's less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers." - Richard Feynman
Money is also the most fungible element of the economy. Given monetary policy, particularly the Fed's policies of the last decade or so, it is also not good faith to assume money as a constant.
Agreed. It's not constant and it's not infinite. The question then becomes at what rate does it grow and is that rate higher or lower than the stratification of wealth. If it's higher, it's either hyperinflation or wealth accumulation appears logarithmic in growth. If it's lower, it's either deflation or wealth accumulation appears exponential in growth.
It appears to be lower and wealth accumulation does, indeed, appear to be exponential. We're also completely glossing over just who it is that's likely to be wealthy and suddenly it's not just an economic issue, but a socioeconomic one.
There wouldn't be violence. 396 people would say "forget this guy," and find somewhere that they could get food. People vote with their feet (and their wallet).
Is it not true that when the books are balanced at the end of a period, wealth resulting from economic activity within the period ends up distributed among the public such that not every person does not end up with an identical amount? If so, is it possible to state this without simultaneously believing that economics is a zero-sum game?
A zero-sum game is one in which no strategy changes the amount of wealth available. There are clearly strategies that create or destroy wealth. Therefore, it's not a zero-sum game.
(This does not imply that every player has ever-increasing wealth each turn.)
>> Immediately, the author assumes that everyone is playing a zero-sum game, which is the root of the problem with his viewpoint: "We've got about 400 people in this room.... Imagine if dinner was carted into this room, and four people got half the food. The night would end in violence,"
"economics is not zero sum game", "correlation != causation", etc - certain ideas seem to be kind of like catnip for humans.
It was not that long ago (a year or so? Just when the trade war rhetoric with China was heating up) when "lolololll, economics is not a zero sum game!!!" seemed to be a satisfactory dismissal of Trump's issues with China's trade practices, both in the media and in forums. Shortly after, when the various media outlets seemed to all have a spontaneous change of heart on the matter and get onto the same page of noticing that there actually is a fair amount of complexity involved in international trade, and since then I've read very little "zero-sum" talk on the matter. Perhaps a media blitz on this issue might help illuminate more of the unseen complexity in this situation, although that scenario seems a bit less likely to me.
(The actual phrase comes from Jonathan Wallace, near as I can tell, but he was using it to talk about religion, not thinking in general.)
The government comes in and gives people who have little food, enough food. And of the food distributed, 70% of it comes from the top 50%.
To reframe your point: maybe we should be careful to identify where the baby is and spend a little less attention on what billionaires want.
What percentage does that equal on the lower end? You say it does not justify messing with the system, but what is that based on? What would you feel is an equitable distribution of wealth within a country?
There are definite improvements (a fair amount of medical science), but I'm not sure on balance that the planetary destruction/extinctions/etc outweigh them. So, using made up GDP/capita numbers for justification that the world is "improving" is tenuous.
So don't compare the worse case subsistence farmer, with what was middle class in the US a few decades ago, where suburban houses on a couple acres were affordable my the top 70% of the population. We have more trinkets, but the price of basic necessities are becoming more "expensive" every day.
The middle class in the US a few decades ago lived pretty good lives, but were very much dependent on market economies and innovation for their standard of living.
https://ourworldindata.org/grapher/average-real-gdp-per-capi...
Day-by-day the world is zero sum.
If the world were just a bunch of fields with a static farm economy and no innovation in cultivation, then your point would be correct. But innovation increases the size of the pie. Yeah, the jealous may focus on the percentage kept by these innovators, but they really should be looking at the share of the pie.
Socialism is all about making sure that everyone is equally miserable.
We collectively are not done, yet. We can still make it better for everyone. Let's at least _try_ new ideas.
It's misleading to think of any democratic style government as being in stasis - the world is constantly in flux.
In my own country, free markets only started bringing prosperity after getting at least some semblance of liberal democracy and rule of law - before that, in the absence of a strong state, it was a very literal robber barons' paradise.
this is orthogonal to the economy being positive/negative/zero sum. if total real wealth increases over time, the world is positive sum, regardless of how that wealth is distributed.
positive sum doesn't imply that everyone gets wealthier over time, only that it's possible for people to get wealthier without it being directly at the expense of others.
Standard of living has improved generally over time, but day by day the world is a zero-sum game.
I'm not entirely certain what you mean by this question. the homeless person could even be worse off today than they were fifty years ago, and the economy could simultaneously be positive-sum. suppose you have an economy with two people that each start with $100k. if after 10 years, one person has $500k and the other has nothing, this is a positive-sum game because the total gains exceed the total losses. positive sum does not imply that everyone, or even most people, will become wealthier over time.
> Standard of living has improved generally over time, but day by day the world is a zero-sum game.
if you pick an infinitesimally small window of time where nothing can be produced, then sure, I guess you could say any changes in wealth would have to be zero-sum (assuming you could somehow transfer wealth instantly). I don't really think this is a useful analysis though. over the course of a whole day, the economy could be positive, negative, or zero sum. it depends on how much total wealth was created and destroyed on that day. even in an hour, I could create something of value that didn't exist before, or an explosion could go off in a port causing billions of dollars worth of damage.
LEDs. To take one very specific, simple example, though feel free to substitute in everything from computers to engines. Fundamentally, we have both increased our average energy budget per person and we can accomplish far more of what we want to do for far less energy. Taking the basic general goal of "I wish to have visible photons available to me at a sufficient level for my eyes to work well at arbitrary times and places", compare the total costs and % of resources converted to the goal vs wasted as heat/losses/externalities of say torches to oil/gas lamps to electric arc to early incandescent to later incandescent to halogen to fluorescent to LEDs. We can now do with single watts for tens of thousands of hours and pennies of silicon/impurities what would once have taken dozens to hundreds of watts to kilowatts and lasting just hundreds of hours, tens of hours, or even mere minutes.
Increasing abundance and efficiency for human goals is the definition of increasing overall wealth. Even given imbalance in ultimate distribution, the pie has absolutely grown larger. Massively humongously wildly larger. Positive spirals thankfully abound, such as better nutrition and knowledge of infectious disease at young ages yielding better outcomes and life expectancies for the rest of their lives. None of this is to downplay the importance of keeping inequality from going too far, but to even suggest it's a zero-sum game, that world economics are actually the same right now as they were a hundred or a thousand years ago, is frankly ludicrous.
Edit:
>E.g., a product costs $X, owners get too large of a % of that compared to employees.
That makes absolutely no sense as a standard or line of reasoning. The total sum has nothing inherently to do with how its divided, are you sure you're clear on definitions here? When something is zero-sum that means that for anyone to gain a larger percentage, someone else must necessarily lose a smaller percentage. But when the total sum itself is increasing then somebody could be gaining more and everyone else could also be gaining more, just not as much more as if it were equally split.
Also, what is "too large of a %" and how do you know? And if the product costs $X, but previously other competing products cost 7*$X, and as a result the company is many times the size it would be otherwise, and in turn the % the employees get is still an absolute amount far larger then it would have been anywhere else, now what? Rather then thinking about fuzzy "proper %" it seems better to investigate power imbalances, human limit edge cases, information asymmetry, cost externalization, etc., that affect the equilibrium of the system. Of which there are many!
You can't bake pies forever, no. But the stars are vast and many. That's yet another semantic stop sign: a phrase you say when you don't want to think about things any more, just like "it's not zero-sum".
The fact that we can "bake another pie" for 1/100 the resources is the definition of positive-sum. There is now more to go around. Even if previously the pie was perfectly divided but now of 100 pies 20% goes to whomever came up with the better way and another 50% goes to whomever financed the better way, the remaining 30% to the masses is still 30x the pie. I'm really not sure what you're confused by here, unless you're getting really lost in analogies.
Again: a basic definition of increasing wealth is increasing core abundance and efficiency. There can be more useful energy/resources to accomplish goals with, and there can be more efficient ways to achieve goals. Either or both combined mean there is genuinely more to go around. How best to distribute energy/resources remains very important, but does not change that having more and/or having it go farther means more wealth overall.
For the sake of simplicity, I'm just going to stick to the United States. As the previous commenter explained, the introduction of LEDs (along with cheap methods of manufacturing them) lead to much cheaper and more effective lighting. Undoubtedly there were companies and individuals that stood to profit quite a bit from these inventions. I don't know whether it helped create any billionaires, but certainly there are similar examples which have. On the other hand, although it created more wealth for those individuals, it created wealth for the entire country. Now every American has more money to spend because they don't have to spend as much money replacing their light bulbs.
In this case, the fact that some people gained much more wealth from this series of inventions is not a bad thing because everyone also benefited. In fact, the reason that inventions like this even come into existence is precisely because there is high reward for the individuals or companies doing so.
There are absolutely certain markets where things are much messier, but overall it's certainly not zero-sum. The issue is that many Americans do not have high enough wages or benefits to meet their family's needs. We should be working towards addressing poverty, not towards some moral tirade against billionaires.
Edit: I honestly can't express these concepts nearly as eloquently as xoa has in their comments, so I'd suggest referring to those.
Places like Venezuela and Soviet Russia tried to distribute things equally and the richest people in those worlds had it worse than the 10th percentile in capitalist countries. This is why the Soviet Union had to build a wall to keep people in but the US is considering building a wall to keep people out.
Just
This system is a failure for everyone that isn't in the 1%
2. A stock price going up is not exactly getting "richer".
It's almost like capital ownership awards undue power that can then be used to further entrench power.
When the richest man in the US who happens to own the largest online shopping site and also uses his own newspaper to push more propaganda to push for more lockdowns - thus eliminating more competition from small businesses, is the richest man to be blamed or are the politicians listening to him and the people reading his propaganda newspaper and following orders to be blamed too?
When all the massive multi-national corporations that have questionable hiring, firing, healthcare, worker's rights, and safety track records promote and sponsor your cause and your Revolution has corporate sponsorship, you are not a revolutionary, you are a pawn.
It's just amazing how those who kept advocating for opening up small businesses and ending the lockdowns got called all sorts of names by the same people who complain about the rich getting richer.
Yes, the richest person on earth is absolutely to blame for the decisions he makes to hold on to his own power and wealth. Hope that clears things up
It is the fault of leadership, but the US leaders in particular seem to be an extremely wealthy bunch (or at least they claim to be). It seems to be the key attribute now.
There is a dire problem around the collapse of small businesses, but rich people usually get rich through capital markets rather than small business.
And "rich people usually get rich through capital markets" is just a fancy of way of saying they have ownership of everything and profit off of other peoples's labor
And yeah rich people own assets. That's like the definition of a rich person. Take your ax and grind it somewhere else.
This isn't some ax to grind. This is life under a system where the wealthy rule and the rest of us have no choice but to work for them or starve.
Honest question: compared to what?
* everybody has equal control of the nothing,
* no value → no economy → no economic decisions made for you by others,
* anarchy → no political decisions made by others
yet is clearly inferior to what we've got now.
I have zero problem with the cops stopping violent protestors. That’s a basic function of government.
Of course, the most "loyal" communists got the best land...
As always, the answer is in a healthy balance.
"Imagine four people got all the food, and the rest got another 20%" is still imbalanced, even with 120% of the food. And there still would be violence. The problem is that the benefits of anything not zero-sum disproportionately accrue to the people who already have more than enough. And that simultaneously zero-sum resources also disproportionately accrue to the ones who already have so much.
It's not "playing a zero sum game" when you question why e.g. Bezos should accrue another $40 billion in net value, while hospitals struggle to provide PPE to their health care workers.
It's not "a zero sum game" if you ask why we have a world where somebody can hoard $150 billion while 800 million people need to go hungry every day.
Hugely disproportional resource allocation will break civilizations, zero-sum or not. (I'm fairly convinced that some inequality might contribute to a better society, but we've exceeded reasonable limits long ago)
The question is then, how do you measure efficiency. Proponents of a more equal world argue that the current extreme imbalance is only "efficient" for a very small subset of the population, and likely inefficient both for the vast majority, and for long-term success of societies.
The long-term question is basically a result of economies being feedback loops - if benefits accrue inequally, and capital results in opportunities, any system that doesn't have some negative feedback loops ultimately will amplify the inequality more and more.
In extremis, that means one person with all the resources. I'd argue that this is an outcome that probably nobody wants.
And in the context of OP: unless the total cake grows faster than the inequality, this holds true for non-zero-sum games, too.
The world has experienced tremendous growth in the past. It doesn't right now (and it can't sustainably continue growth in many areas), so the question is, what feedback loops do we want in place.
Yes, totally support this argument.
Most people advocating for rich people's existence is that they can more effectively utilize the resources and power. But they never tough upon the imbalance itself.
The imbalance has 2 aspects to it: * Utility: Does imbalance proclaims efficiency. * Morality: Is it moral to have imbalance.
Of ucz, both aspects need themselves to be balanced. I.e., we do encourage people with the obvious talent to enjoy imbalanced power and fortune. Like the young Steve Jobs, Bill Gates, and now Elon Musk. It is more utilitarian, and more moral to have these people enjoying more imbalanced power and fortune, then the older Steve, Bill, and Elon; in the sense, that when they are less talent, they should be pushed to be less entitled, and prefer a more moral position in the imbalance.
I mean, what Bill Gates does is not particularly more brilliant than a government directed research organization. Then why do we allow such a large fortune sit there without being spent for the people, after all, the fortunate was not earned by Bill the individual, it's a symbol of attribution through the capitalism system.