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Comment by giansegato | Hacker News Reader

The first plot is especially troubling. The last time the top 1% had as much as the bottom 90% was right on the eve of WWII.

Now, an exclusively economic interpretation of history is certainly wrong, but one cannot refrain from thinking that this much inequality won't lead to social unrest at best, flat out war at worst

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That is the main thesis of https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce....

IIRC, most societies don't tolerate such inequality and there are two options to reduce them greatly (besides taxes):

- wars (in the end, massive destruction tends to make all _surviving_ men more equal)

- and hyperinflation (the poor suffer but since most wealth is held by the rich, inflation affects them most).

Don't hyperinflation events lead to civil unrest ?

Hyperinflation usually leads to not-having-stuff, eventually being hungry, and hunger leads to unrest.

Source: Been in the balkans in the 1990s

Hyperinflation events basically don’t happen in a healthy economy, so it’s hard to say whether they’re just a waypoint on the road to unrest or the cause. (I tend to think they’re the former, that they’re the agonal breathing of a society: often associated with imminent death but not the cause of it.)

How many _major_ civil unrests end up being a bad thing for the many? I know a few that started revolution that changed our societies for the best.

It seems crucially important to ask this of people who lived through them (or from reading their first person accounts) rather than asking people who read about them in history books or watched them on TV.

What’s going on in the Gaza Strip for example does not evoke a sense of “wow, that doesn’t look bad at all” in me.

I wouldn't call what happens in occupied territory to be internal civil unrest though.

Hyperinflation doesn't directly hurt people who have wealth, the valuation of the wealth in cash terms is the part of the system going up.

Hyperinflation directly hurts income earners and anyone who holds a significant part of their wealth in cash.

It hurts creditors more than anybody else. It certainly helps hit the reset button on aggregate debt levels.

Only in part. A lot of loan and mortgage contracts (at least in the EU) have provisions built in that allow banks to reject down payments over a specific limit, usually 5-10%. If push comes to shove, the state might even force you to mortage your home to finance itself after crisis [0]. It surely helps debtors a bit, but you can't just go to your bank with a single note and be done.

[0] https://de.wikipedia.org/wiki/Zwangshypothek#Geschichte (unfortunately only in German)

>have provisions built in that allow banks to reject down payments over a specific limit, usually 5-10%.

That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month?

I have heard of this sort of thing happening to some people when hyperinflation kicked in - effectively getting a free house/car/etc.

> That would mean instead of paying them a lump sum of equivalent-to-$100 to pay off your mortgage you end up paying an equivalent of, say $2 per month?

This is in addition to monthly payments. So if you take a loan for 480$ at 0% total interest (just for nicer numbers) for 48 months, you'd pay 10$ per month, but you'd only be able to pay an extra 24$ per year to get rid of the loan sooner. So if the currency hyper-inflates in year two, you'd still own ~206$ [0] once the state revalues the debt. Of course, the bank is still free to accept higher payments (sometimes for a fee) if it thinks it's the better option.

The German word for this is Sondertilgung. You can find it explained here [0], for example. I'm not too familiar with the US system, so I can't say how common these clauses are over there, but I'd be surprised if banks didn't cover themselves , too.

[0] A bit less if you start paying sooner or agree to pay fees.

[1] https://www.berliner-sparkasse.de/de/home/privatkunden/immob...

>but since most wealth is held by the rich, inflation affects them most

But not much of that wealth is liquid. Hyperinflation hurts savers.

Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression. The rich are already keeping most of their wealth in assets that keep up with inflation, or even outpace it, which exacerbates the inequality issue even more. The only thing that inflation is good at is reducing debt levels, both for individuals and organisations.

>Keep in mind that hyperinflation only works to reduce inequality when coupled with financial repression.

Not really. If I owe some money, every increase in prices (and wages) make it easier for me to reimburse my loan. The rich lending money will be losing, big time.

Now, do rich people lend their money? I'm sure they do. They may own stocks, real estate and commodities in addition to currencies and obligations but their value will drop hard if they stop lending money.

The rich, as a class, can't protect themselves from inflation even if they start buying stuff that appreciate by selling the rest.

A few may find a hedge against this, but the exception proves the rule.

If the value of assets drops you get a deflation and central banks hate that, so in practice what happens is that asset values get propped up on an ongoing basis. This is the situation we are finding ourselves now.

> - wars (in the end, massive destruction tends to make all _surviving_ men more equal)

You mean equally homeless and poor?

Hyperinflation is usually a forex problem: the country needs to buy imports in hard currency, especially oil and food, but the export industry has collapsed, so it can't find dollars to pay for it.

Which is why I find Americans worrying about hyperinflation in the present day very odd: you have oil AND food AND dollars all domestically produced in adequate quantities, what are you expecting to happen?

They don't have the factories anymore, do they?

Its complicated.

Manufacturing output has been relatively flat for 20 years or so: https://fred.stlouisfed.org/series/OUTMS

But, manufacturing employment is down: https://fred.stlouisfed.org/series/PRS30006013

The latter is why people sometimes claim manufacturing is disappearing from the US. Its not, but employment levels are down as productivity goes up, and as labor intensive but low value industries move elsewhere (like clothing manufacturing).

But in that 20 years, the population has grown, and per-capita consumption has grown. So flat manufacturing output means that domestic manufacturing serves less of our consumption.

Or more on point, this book:

https://press.princeton.edu/books/paperback/9780691183251/th...

" Are mass violence and catastrophes the only forces that can seriously decrease economic inequality? To judge by thousands of years of history, the answer is yes. "

As long as the public has access to cheap entertainment like Netflix and social media, there will be no war. Panem et circenses.

Bread and circuses only protect against attack from within.

Export it then.

"My people are now buying your blue jeans and listening to your pop music"

Culture victory imminent!

The USA is, metaphorically, a powerful exporter of both.

Yeah, but it looks like we will be out of "bread" soon (or "bread" too expensive to buy, which is the same). Netflix won't be enough without access to food.

Netflix does not pay rents, food, gas, healthcare and the rest. Entertainment only distracts you from minor inconveniences.

Some people are content on SNAP, Medicaid, public housing, etc.

And in most states, all 3 of those programs require they have some form of work, except those on disability.

I don't think that's completely true. Generally, housing and SNAP have work requirements for most people. Medicaid generally does not. There's a recent waiver process that allows states to implement a work requirement, but most states have not taken advantage of that.

I have a relative that lived in free public housing, recieved SNAP, and is on Medicaid. I know they still get food from the food bank, but I'm not sure if they still get SNAP. They moved out of the free housing into an apartment (inheritance). They refuse to get a job.

Food banks aren't means tested. I've seen plenty of BMWs pull up to one during the pandemic.

Medicaid is extremely means tested. You can't own assets >$3000. Chances are your relative that inherited an apartment is no longer receiving Medicaid.

And SNAP not only has a work requirement but there is retraining requirement as well. So somehow your relative managed to not get caught by 3 different gov't agencies?

I believe it was transferred in an indirect way, maybe a trust.

Haw haw. Try and get on public housing in the US, I dare you.

We helped a relative get in. So yeah, I know a bit about it.

Social media takes care of any insurgency - just deplatform anyone who seems to be getting too rowdy and organised.

...but its them immigrants stealing our jobs,and illuminati criminal cabal that keeps us honest working people from having normal lives.

This would be funny if I didn't actual hear those statements at family gatherings. and worse facebook spammers are teaching people how to dismiss intellectual discourse with statements like 'I am not saying i believe it, i am just asking', 'I dont know how it works but I heard it somewhere', 'i have my sources and you have yours, how can i tell who is telling the truth'.

Its terrifying what will happen in the future as social media is the the greatest populous pacifier ever invented

People don't only need Netflix and Facebook - they also need homes, medical care, and enough free time to make use of Netflix and Facebook.

https://en.wikipedia.org/wiki/Bread_and_circuses

António de Oliveira Salazar, the dictator of Portugal had a similar take on it. The triple Fs of Fado (music), Futbol (sports) and Fiesta (entertainment:

Três F

https://pt.wikipedia.org/wiki/Tr%C3%AAs_F

https://en.wikipedia.org/wiki/Ant%C3%B3nio_de_Oliveira_Salaz...

The third F is for "Fátima" (Our Lady of Fátima). And besides the Football, it has nothing to do with Bread and Circus, as every people should cling to their Faith and customs.

Edit: This is present in your own links you didn't bother reading, and you'd see those "Three Fs" wasn't any Regime motto, but post 25 April propaganda, the official one was "Deus, Pátria e Família" (God, Fatherland, Family).

You are missing the bread part, as housing, education and healthcare become unaffordable

With no enforced minimum wage in America, and with planned "Company Towns" where employers like Amazon have employees rent company-owned houses, it's almost like America is On The Road To Serfdom.

more ilke a return to the gilded age. The question is if the violence of the last half of the 19th and first half of the 20th century will return aswell.

You know that inequality in the USA had absolutely nothing to do with WWII right?

Monetary woes (and egregious war penalties) had a whole lot to do with the rise of fascism, though, so it’s not totally off-base.

Really? The guy just tried to equate particular wealth in the USA with Hitler's desire to establish the 3rd Reich. It's not on the same planet, let alone on base

You know that the US had one of the largest stake in Germany's appalling debt before Hitler took power, right?

Why do you think it took 10 years for the Nazis to go to power? Between '23 and '33 one thing happened: 1929. And yes: it happened in New York.

I think you'll find more than one thing happened. As it happens the Nazis rise to power is just about the most studied period of human history.

Trying to generate some level of John Nash type synchronicity going from an invalid inference of similarity between wealth inequality in two separate periods of history to ww2 to impeding doom is absurd. Even more foolish to assert the great depression was so simply explained by inequality. That's obviously not the case.

Never once I said it's the _only_ reason this happened (obviously). But between "it's the only reason" and "it has nothing to do with it" there's a lot of ground to cover, don't ya think?

I don't think it's far fetched to assert that the US and Germany in the 20s were extremely connected, financially speaking. How much this impacted the subsequent events can be debated.

But believing in no impact at all is just intellectually dishonest. It's a plain fact that '29 and investment dry-up in Europe caused incredible hardship on Germans (and their voting preferences in the '33 elections).

The guy was asserting that inequality in the USA was the mechanism of chaos that was subsequently unleashed.

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