[1] http://www.pensionrights.org/publications/statistic/how-many...
Democracy ought not be a meritocracy, but the economy should be, which means some people will and should be left out of decisions.
I would love it if the government could grow the number of people who, on their merits, help guide the economy, and there are groups of people who are unfairly barred from access to the economy and that is bad, but the idea that everyone should get a say in what happens in the economy is very much against the capitalistic principles upon which the US economy is built upon.
I mean sure, democracy isn't optimal for selecting the best people, but do you think those 10% that do own most of that stock were selected by their skills and abilities?
I'm open to, and often am, wrong, but I know of no other, more accurate, less corruptible system.
Alternative take: everyone already does have a say in what happens, as they participate. Nobody gets to dictate their own terms, though, but neither does anyone in politics.
But generally yeah, I do think everyone does get to participate, and that's a Good thing.
Maybe that's helpful? I do think there are marginalized groups and that should be accounted for (ideally, in my limited understanding of the problem, by raising those groups up), but I don't think "baseline" should be, "Everyone is equally involved in steering the US economy."
> [...]
> Honestly? I don't know, and if pressed I'd have a hard time coming up with a usefully specific answer, but I still believe what I do;
Strong words spoken from atop the pile of sand.
Almost all of my beliefs/opinions are built on some form or another of sand. Certainty is the real mind killer, IMO.
That's by and large a great thing, because it means that the people getting the richest are largely the same people who are providing the most value to others, and so it aligns incentives with useful production and useful work in a decentralized way.
We can zoom into examples to understand better. Why is George Clooney so rich? Because he added a little bit of value (say, $3 worth) to the lives of millions via his acting skills, and he got a slice of all that value add.
This is not to say it's perfect, and I could go on about why it's not, but the central point is that "merit" (i.e. income/profits) is defined by one's peers opinions about your unique value add to them.
It's extremely flawed and naive to think a positive balance sheet means a positive outcome for society occurred in the process of obtaining it.
Something can be "extremely flawed" and also be the best option available, such as in this case.
The idea that there should not be any democratic input on the economy seems quite unsupported so far.
1. George Clooney didn't get rich from acting. He got rich from selling Tequila. Regardless, his children will likely remain wealthy despite never having been on a movie screen, much like the Waltons are among the top 20 richest people despite never having a job at Walmart.
2. Every year, fewer and fewer people get rich from having built something (labor), and more are just rich from being already rich (capital).
If in a free-market system, if you let the people with most wealth concentrate power, after n-years you are just left with a monarchy with a couple extra steps.
https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
You can build a dynasty around land because ownership is barely taxed. Land does not degrade by simply keeping it vacant. Meanwhile everyone around the land needs it to live on or to work or to extract resources. Inequality isn't driven by well deserved high returns, it is driven by monopolistic extortion where you cannot refuse even if you know you're getting ripped off.
Investing that money, or otherwise allocating that money to companies who can better use it provides value to society at large, and in return, the person investing will receive a return on investment to live off.
To point to someone who has done the research, 'Capital in the Twenty-First Century', states that its not a self-correcting problem. Furthermore, I'd argue that index investing make it incredibly difficult for his heirs to lose their money. Anything short of a collapse American global hegemonic power means their wealth will be relatively safe. Furthermore, investing is not means of wealth redistribution. I can invest billions in Wal-Mart, but that will not motivate them to pay their cashiers a cent more. The compounding effect of the wealthy owning most of the industry through the stock market means their share of the ownership grows, leading to headlines like we see.
I addressed this in another reply, but I find it funny that you questioned that point literally after showing an example of it to be the case. Clooney leveraged capital from acting to buy a tequila "factory" (AFAICT, he didn't run the company, he didn't make tequila, he didn't manage distribution, his name was just on it), and used that capital to make more money they he would have ever had from acting. But somehow #2 is controversial on HN.
As an example, do you think stay-at-home parents add no value to society (or if you want, let's say "the economy") because they are not paid directly for their services? Are charity workers or volunteers "merit-less"?
Honestly it always surprises me to hear this on HN, the idea that work isn’t being done unless it’s generating dollar value for someone. What is open source coding then? Not work because it’s not done under the purview of an employer for a salary? Not valuable because no one gave you a dollar for it?
From this perspective, the accumulation of money is merely the interruption of this specialization process. The idea of ascribing value to an interruption of a system that is otherwise trying to be balanced gives the impression that somebody is too lazy to figure out what they really want out of their life and they simply enjoy having the option even if it means that the other side is waiting for you to act.
It gets especially perverse during recessions where everyone is trying to acquire money for the sake of safety and security when all it really means is that you order people to stop working for the very reason that motivated you to save money, the fear of unemployment.
If we want to get really precise, we can say that people give other people money for any number of subjective reasons, but the large majority of the time it's because the person wants something from the other party that the other party isn't willing to do without compensation. So money most of the time represents subjective value add that wouldn't otherwise have occurred without it. Cleaning services, manufacturing, specific engineering work, construction, etc.
1) This only works if everyone starts at the same line. Obviously not the case while there's a huge variance in inheritance, education, influence, opportunity. If a 100m race has some people starting on the 50m line while others are on the 0m line, it's not a race based solely on merit. Some of the starters on the 50m will still lose to the 0m starters, but statistically they have a much better chance.
2) We don't live in a free market society. "Free market" is just an ideal (like communism or utopia is an ideal) that doesn't truly exist outside of a vacuum. Most societies (the US included) are a combination of free market, socialism, capitalism, cronyism, etc.
I'm not arguing for a different system than capitalism here, but if you're going to argue for our existing system, then you shouldn't conflate it with free market or meritocracy which simply doesn't exist outside of a lab.
Saying free market is a great system, is practically the same as saying unicorns are cool. For sure they are, but how is that relevant?
>However, I include Worstall’s argument for a reason. It is true that some are more productive than others in an economy and it is true that this has always meant, and is likely now to mean, that those who are more productive do earn higher rewards than those who are less productive. In principle I have little argument with this idea: I have no difficulty with there being some differential in earnings within any society and think them inevitable subject to their being a safety net to ensure that all can have access to the resources they need to fully engage in the society in which they live (which means much more than having a basic material standard of living). Importantly though, what Worstall’s suggestion implies is that there are very obvious limits to wealth differentials, because the fact is that however clever someone might be the differences in productivity we humans have to offer is not that big.
I repeat, the differences in productivity we humans have to offer are not that big.
The primary objective of the US government for its people should be to provide everyone with the same basic opportunities. What they do with those opportunities is up to them, like it is in any other country which already does these things.
Access to education and universal healthcare + a livable minimum wage at the very least.
Once your children are fed, happy and healthy and you don't have to work 2 jobs to make ends meet, you have more time to spend with your kids and provide them with an upbringing which will allow them to have a fair chance at becoming one of the people who make those decisions.
There's obviously a major influence on US democracy coming from the decision makers of the "economy".
So the question is, which is more important, and to whom? The majority doesn't have much of a say in the economy unless they band together, which is nearly impossible in a diverse and (intentionally) divided US.
A flawed democracy also means that the kind of drastic change that's needed to correct this imbalance can't happen.
>Access to education and universal healthcare + a livable minimum wage at the very least.
I'd add that doing so is also smart economic policy and is good for capitalism.
By expanding the pool of folks who are decently paid and educated, we expand consumer spending (which is ~70% of the US economy) and the skilled labor pool.
Both of those will encourage the broader pool of healthier, better educated people to engage in entrepreneurship, growing and stabilizing the economy over the medium to long term.
And even with such spreading the wealth, the top 10% will still be plenty wealthy. It's a win-win, IMHO.
tl;dr: There are compelling economic/capitalistic reasons to increase wage floors, enhance the social safety net, improve edudcation and generally spread the wealth around, not just those around societal good.
The Walton heirs have over $200 billion. I guess Alice Walton ($60 billion), who killed someone with her car in 1989, nine years before being charged with DWI for driving her car into a gas meter is one of those epitomes of meritocracy. Or the Koch heirs, the Mars heirs and so on and so forth. The economy is designed for the benefit of the heirs of the St. Grottlesex set, of this meritocracy you speak of.
Actually, scratch that -- Bezos dwarfs them all. We should defer to his wisdom first and foremost on all matters economic.
I think you're getting stuck on the word "merit". It has context; there isn't some universal concept of the worth of a person being discussed here.
But large and successful corporations are large and successful precisely because of the work of tens of thousands to millions of people. You are trying to say they shouldn’t have a say in our economy? In the work they do? Even though they are the ones on the ground doing actual work, building actual products and technologies with their hands?
Amazon and Walmart do not exist without this army of workers to make them operate every day. Jeff Bezos could die tomorrow and Amazon would continue unabated, just as Apple did the day after Steve Jobs died. Why? Because Amazon and Apple and Walmart are not one person or even one family. Why then, should we give such an outsized role over our lives to single individuals at these companies, when we can’t even prove the success of these companies is due to their individual “merit”?
Successfully taking on risk and navigating from that risk to a successful and sustained outcome is what defines merit.
It is perfectly acceptable that the workers who do not take on risk through ownership at Amazon and Walmart do not get to have a say in what Amazon and Walmart do. It's also true that both Amazon and Walmart pay many of their employees with shares of their company, for this exact reason. Employees who become (small percentage) owners of a company demonstrate merit proportional to their risk, and generally proportional to their individual contribution.
It's not perfect, but if your goal is perfection, you will live the rest of your life dissatisfied and frustrated by inequity.
> [merit is defined as] Successfully taking on risk and navigating from that risk to a successful and sustained outcome
I'm not looking for perfect, I'm looking for well-reasoned. This is not a causal relationship, it is definitional. A tautology. You provided a definition of merit here and then claim that anyone who meets the definition has merit. But so what? This is a circular argument because you have not proven that those people are responsible for the success of the corporations they own. In order to prove a casual relationship, you will have to control for all other factors, including the efforts of other employees and even random chance. And this better be a very robust analysis because if you want to put these people in charge of our lives due to their supposed "merit", they better damn well have it.
Because successful and sustained operation of Amazon is achieved by all workers collectively. The owners of Amazon are not necessarily doing the work of Amazon. They are not even directing that work in many cases. I'm an owner of Amazon and I don't do anything for them. So which owners were responsible for the success of Amazon and how do you determine that? What is the threshold for being attributed merit for Amazon's success? 10% of the company? 20%? A majority? A plurality? You have offered no way to objectively figure this out, and instead defined merit in vague terms. What is "successful"? What is "sustained"?
> Simply working at a company is not risky.
Thanks in large part due to workers having a say over the economy! Travel back to the early days of America or even the early 20th century, and you'll be in a world with no worker protections on the job. Unsafe work environments, no regulations, long hours, child labor, no breaks, no leave, no healthcare, no paid sick days, 6 day work weeks, indentured servitude, private corporate armies, company towns, company stores ... I could go on and on. Oh and let's not forget to mention slavery. Keep in mind the same logic and reasoning you are applying here could have been used in the 1800s to put slave owners in charge of the economy. ("Look at how successful their business is! They should be running the entire economy!"). Here is a taste of the climate created by the very same kind of "meritorious" business owners that you want to put in charge today:
https://en.wikipedia.org/wiki/Battle_of_Blair_Mountain
https://en.wikipedia.org/wiki/Homestead_strike
https://en.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_fi...
"Because the doors to the stairwells and exits were locked[1][7] – a common practice at the time to prevent workers from taking unauthorized breaks and to reduce theft[8] – many of the workers could not escape from the burning building and jumped from the high windows."
It was good to talk to you about this, but I don't think we can move past this disagreement. Cheers!
Acting like I claimed some "proof" or "absolute certainty" around this topic is disingenuous and manipulative, which is why I stopped engaging with him, and honestly am suspicious of you as well.
Telling me that I believe something I do not is not a good way to interact with others, and it's not likely to breed positive discourse.
This topic is a lot fuzzier than the language being used by you and the other commenter, and it's not possible to have a civil conversation with people who don't get that.
> This topic is a lot fuzzier than the language being used by you and the other commenter
You started this whole discussion with unsupported, absolutist assertions as to the model for the economy you would prefer (in this whole discussion you haven't provided any evidence to support your claim that democracy is a terrible way to run an economy). This is the tone you set initially. The topic became "fuzzy" when you were pressed and your bold assertions turned into "beliefs".
No one is asking for absolute certainty, people are asking for a solid argument, so far they seem very soft. If using specific language causes an argument to be impossible then the argument itself is weak - I assure you that fuzzier topics can be discussed with more specific language, it just has to be thought out carefully.
That is what has happened here, along with a fairly significant number of willful misrepresentations, to the point of assumed malice, of what I've written.
No, I'm not equating it to worth of a person -- that's why I chose to compare Alice Walton to economics departments and political think tanks and bank CEOs (who I'm sure are not always of the highest moral character). This is about economic merit.
You said this:
> Democracy ought not be a meritocracy, but the economy should be, which means some people will and should be left out of decisions... I would love it if the government could grow the number of people who, on their merits, help guide the economy...
I picked these examples because to me personally, it's clear that just because someone has acquired more capital, it doesn't mean that their opinion with respect to guiding the economy is more valuable. Otherwise, George Clooney is of higher merit in this context than the faculty members of top economics schools, and so we should heed his economic decisions and guidance accordingly. That doesn't strike you as... a little odd?
To put it another way, just because you do well at a game (e.g. "the economy") doesn't mean you should be the one dictating and guiding the rules of the game. It's a bit circular -- in what direction do you think such people will guide the rules? What incentive would the winners have to change the rules?
Jeff Bezos cannot (or should not) unilaterally decide how corporate law works. He has a vote in who governs, legislates, and judicates, just like you have a vote in who governs, legislates, and judicates, and that's it. This is what I mean when I say "you're getting stuck on the word 'merit'".
I believe it's okay that not everyone gets a say in how Amazon is run. Everyone does get a say in the things Amazon is allowed to do in the US economy. Those are different things, though it seems you're conflating them.
But even ignoring this point and going back to an idealized world, maybe I'm misunderstanding you -- can you spell out what you mean by "guide the economy" or making decisions about the economy?
A company's shareholders don't get explicit control over the entire economy or anything so absolute, they simply speak with whatever control they have over the private organizations that then, themselves, indirectly influence the economy.
I don't think 10% of America should literally have extra voting power in elections, and despite your allusion, they do not.
No matter how much you decry "money has influence in elections" people are free, in a democracy (as implemented by the US), to vote how they want. Any argument around, "People get manipulated" is a non-starter; as long as nobody is literally casting their ballots for them, they are free to choose to harm themselves. It's stupid of them[1], but that's democracy for you.
[1] https://en.wikipedia.org/wiki/Carlo_M._Cipolla#/media/File:C...
Double the speed limit in a residential area, kills kid, acquitted: https://www.kmov.com/news/former-st-louis-county-officer-fou...
However, in 1825 Jefferson noted that, much like today, the country was becoming increasingly controlled by what he termed 'monied in corporations' and therefore seemed to be eroding the achievements of the revolution:
[T]his opens with a vast accession of strength from their younger recruits, who having nothing in them of the feelings or principles of ’76 now look to a single and splendid government of an Aristocracy, founded on banking institutions and monied in corporations under the guise and cloak of their favored branches of manufactures commerce and navigation, riding and ruling over the plundered ploughman and beggared yeomanry. this will be to them a next best blessing to the Monarchy of their first aim, and perhaps the surest stepping stone to it.
https://founders.archives.gov/documents/Jefferson/98-01-02-5...
The conventional trickle down hypothesis is that giving the rich money lets them do their job more efficiently because of centralization. That is basically a belief that only people who do not believe in a liberal(or free) market would have. The idea that 300 million decision makers are worse than a handful of billionaires is absurd. If the work of these billionaires is truly needed then let people make that decision for themselves and give them the option to avoid them.
https://www.investopedia.com/ask/answers/040315/what-can-sha...
Well, most decisions are outsourced to the board members, who's membership is the main thing shareholders vote on.
Mandatory reporting kicks in at 5 percent ownership. At 10 percent, the SEC considers you an insider[1]. Before that, I doubt board members even know you exist unless you talk to them first (and they aren't taking your calls or mine).
[1]: https://www.sec.gov/smallbusiness/goingpublic/officersanddir...
I don't know what scrutiny that brings, but Warren Buffett has been careful not to get Berkshire Hathaway designated it. I believe the limit is/was 10%, but then you could ask the Federal Reserve for a higher limit, which they did because of Bank of America or Wells Fargo I believe? I don't know a tremendous amount about it, but from what Buffett was describing, it wasn't the fed asking them about their bank holdings, they were asking the bank about them.
It's not injustice that people can't vote to control what you learn, read, eat, or do. If you write a book, our government isn't suddenly not a democracy because people can't vote on what you write even though you technically now have more power over other individuals since you can control what goes in your next book.
I'm not sure what you're getting at, technically you may have a point (I'm giving you the benefit of the doubt here) but at the end of the day when all resources are owned by a few, things start to break down.
Everybody has the right to achieve a decent life. What you are actually asking for is the right to have material wealth. Which isn't a right.
>technically you may have a point (I'm giving you the benefit of the doubt here)
I don't want the benefit of the doubt from you. You advocate robbing people and spread hate against a group you don't like because you don't have enough toys to make you happy. You are just a part of a mob that has repeated the same mistake countless times in history, with your beliefs you are practically not an individual.
I don't see how you can so easily divorce the two. If I can't afford to send my kids to school - do I have a decent life? If I can't afford to see the doctor, do I have a decent life? I'm not arguing that everyone should be afforded to drive Lamborghini's, but that the American project of guaranteeing individual liberties and freedom is predicated on some wealth distribution; otherwise the working class are effectively slaves to their own existence.
Democracy is a means on how that power is utilized in order to control the individual lives of others. You wouldn't reject that standard for any other law; you wouldn't allow rich people to openly commit murder because you didn't want to infringe in their individual liberty.
And I advocate robbing anyone? No, I advocate pointing the finger to the robbers instead. I withdraw the benefit of the doubt I have given you earlier, you are very unreasonable and dogmatic in your views. Look around you from time to time, you're going to see a lot more people failing who should have not, hard working people with good work ethic.
Not taxing the rich, capital gains as income, seems to contribute to inflation about as equally as government social spending due to both second and third order effects of policy influence and economic consequences.
I'd say you're half right, here. The Fed prints money spends $80 billion a month on treasuries and $40 billion a month on mortgage backed securities, so if you're a government contractor or you have a lot of real estate assets, you're effectively robbing everyone else's savings and devaluing their wages.
The idea that inflation is killing us is simply not true.
The 90%ile is $129,000/yr individual income.
But wealth and income (from work) don't have anything in common. You may earn those 100k year after year, but it would still take quite a while until you land into the wealthiest 10%, if ever.
If you contribute 2k a month at 7% interest that would take you 23 years. A long time yes, but certainly achievable on a 100k salary. Of course I know the interest rate might not be that going forward, but the point still stands.
This is, I'm sure, is what the parent means. Compared to people with capital, people on high incomes are always behind.
If you earn more than average, spend less than your peers, and invest wisely then you might move up a bit on the wealth scale, but that's it.
Say you live in NYC, you have a stay at home partner and 2 kids.
Your living paycheck to paycheck.
I'd consider anything less than 200k for a family to be working class. As in your unlikely to be able to survive for extended periods of time without working.
If your monthly expenses are 9k, even your take home is 11k your in for a ride if you lose your job.
Unemployment has a miserably low max benefit.
I don't know what $130K after taxes is, but if I take a wild guess and say $85K, that leaves around $30K for savings and investments.
Single income living isn't easy in western society.
[0] https://www.expatistan.com/cost-of-living/country/united-sta...
Income doesn't scale well in America. If anything taxes are way too high on middle class people. No one making less than a million a year should pay over 30% in taxes.
I'd much rather the economy be controlled by the top 10% of a productive society than by the 1% of a bureaucratic structure.
people seem to think the Soviet economy was ran by a single person decided everything about the economy. while in practice its actual implementation was rife with personal and organizational infighting to reach Stated or unstated goals.
Kind of an important caveat, no? It’s the entire principle behind having a democracy.
The wealthy who own large portions of the controlling interest in these companies are sometimes the visible leaders of said corporations, but many of them live out of the limelight and control the rest of us with puppet strings.
If they're doing a bad job, the recourse (at least in theory) is to elect better leaders. What recourse do we have when the rich abuse their power?
"The stock market isn't the economy"
https://www.bloomberg.com/opinion/articles/2020-10-27/stock-...
https://www.nytimes.com/2020/05/10/business/stock-market-eco...
https://tcf.org/content/commentary/stock-market-not-economy/
This is one of my favorite Kai Ryssdal-isms.
While this is true, it's not true to a lot of people: politicians and us regular-folk alike often equate the stock market's performance to the state of the economy (hence why this is a saying at all).
I like to think of the stock market as an insight into wealth-transfer (from the poor to the rich, obviously... it doesn't flow any other way in the US at this point). When stocks do really well, especially those of service/retail companies, the already-rich are getting richer, generally at the expense of the rest of us.
That's not true. Sam Walton and Jeff Bezos got rich by improving the lives of their customers. You might complain that the improvement came at the cost of exploiting workers. I disagree, but for the sake of argument I'll concede at the margins Amazon and Walmart could pay more. But the bulk of their wealth came from 1) them stealing it from other capitalists, keeping a portion for themselves and passing the rest onto their customers; 2) creating it ex nihilo and dreaming of something (AWS) that never existed and creating it.
It depends on how you define "improving the lives of"...
Amazon only won the game by undercutting others in the market to the point where they couldn't realistically compete. But those other market players were employing a ton of folks around the country. That's a huge part of what made Amazon's prices unrealistic for brick & mortar stores: people & infrastructure _in the communities they serve_. I fail to see how eliminating jobs & competition does anything other than consolidate wealth and (by not paying those employees) solidify the direction of transfer of wealth in the poor -> wealthy direction.
I think people really misunderstand the effect of moving commerce online. Communities need local services. Communities need goods available locally. Moving employment opportunities away from communities creates a higher barrier for entry into the job market, because now someone needs a car and/or hours-per-day to commute to get to their job.
This isn't even to mention the harm Amazon has done to its employees and contractors (folks in distribution centers & deliver-people have had a lot to say about the working conditions).