How about we set up some rules and regulations so that the price of goods more accurately reflects their total cost (environmental, moral, material) and then we can all just sort of automatically buy the right amount of stuff.
My problem is the last few weeks have been an outright propaganda campaign against Americans to accept lower living standards which are a direct result of inflation caused by government policies and allowing companies to outsource everything. These types of headlines are almost a parody, Soviet Union tier stuff trying to normalize what is happening.
We expect market participants to take advantage of arbitrage opportunities in every other circumstance and buy low and sell high, why would it be different for the billions of people coming online around the world?
Also pharmaceutical prices directly contradict this. Americans are essentially subsidizing worldwide pharmaceutical costs.
> "inflation caused by government policies"
Inflation at present is primarily the result of the global pandemic and government's failure to coordinate their response with regards to shipping, hence the crises in global shipping at the moment. Governments spent the better part of 2020 and the first half of 2021 trying to keep their population safe. They took their eye off the eight ball in understanding how these events would impact global shipping. You could argue the policies affecting inflation were therefore the Covid-19 policies, but that really isn't constructive in resolving the situation we now find ourselves in. We can use it to model a better response the next time. Global pandemics have negative impacts to global supply chains.
> "allowing companies to outsource everything"
You mean allowing companies freedom? Funny how "free societies" do that! Meanwhile, economists of all political persuasions have been arguing for decades that this has been the key factor to America's success and her high standard of living. It has also encouraged investment in America's financial markets from all over the world.
We're currently experiencing constrained supply due to the global shipping crises and constant demand. Econ 101 informs us this will result in price increases. I think the central banks have been pretty transparent about it. They still see inflation as a non-issue because they believe once the supply constraints are resolved prices will go back to normal. Meanwhile...what do you propose we do? With a constrained supply we're going to have to make do with less. This isn't propaganda, it's simple, basic economics.
I was pretty sure it was the trillions of dollars we printed to pay for all the pandemic stimulus. Not just shipping.
Yes, that is how wealth works.
Your individual emissions are above the global average? Tough luck. Are they below the global average? Congratulations, your higher purchase price for iphones is more than compensated by the payout everyone worldwide gets every month.
Differentially taxing people by virtue of where they live for no local purpose is reliably unpopular in similar contexts, and that would easily be the case here.
This is almost as fantastic as the HN zeitgeist of:
1. OMG there's a climate apocalypse coming due to the carbon emissions of about a billion people!
2. There's another 6 billion people we need to either import into, or bring up to the living standards (e.g. carbon footprint) of, those first 1 billion.
3. What? Oh lol you heartless rationalist, #2 doesn't conflict with #1 because uhhhh.... Elon Musk exists? (no analysis of the actual energy requirements and fossil fuel mix over time is provided or considered, just an assumption of cornucopian miracles)
No, TFA is correct. We need to consume less, end our obsession with "growth", and most importantly, divest ourselves of the bleeding-heart suicidal idea of quadrupling our energy requirements with immigration and/or foreign aid. There will be a time to do that, when our energy mix is largely renewables, but not yet, and not within at least half a century.
In a capitalist society, the theory goes that the individuals who are better at allocating capital will accumulate more capital, allocate it better, thus accumulating more, etc. in a loop.
I could be convinced that some people are much, much better at allocating capital than most. It makes sense to let them be our societal capital allocators. Obviously, we want limits so that if 1 person makes a serious misjudgment, it doesn’t completely tank society.
But I could see it being the case where, if we were purely optimizing for sum-total societal capital accumulation, it would be optimal 1% of the population to be in charge of 90% of the capital.
There are a few obvious problems with this scheme where it meets reality, though. The most over-arching is that our current system allows the controllers of capital to more or less arbitrarily convert between capital and consumption.
That is, some billionaire can burn some of their capital and buy a $500MM mega-yacht. At the end of the day, this is essentially wasting the labor of 10,000 people for a year (at 50k average salary).
Even if we accept the premise that Jeff Bezos is a better capital allocator than 99.99% of people, I think we could argue that his having a $500MM mega yacht is not going to increase his capital allocation ability.
This is where the progressive consumption tax comes in. Imagine a tax that was quadratic with consumption. For example, you’d pay $1K in tax on $10K of consumption, $100K of tax on $100K of consumption, and $10MM in tax on $1MM in consumption (obviously these are example numbers, any upwardly curved function will do, though). It very quickly becomes prohibitively expensive to consume much more than some societal average. This would significantly decrease consumption inequality.
There are a lot of second-order things affected by this tax:
- becomes much harder for 1 billionaire to burn capital in order to consume marketing and influence elections
- one could use some proceeds of this tax as simple transfer payments, so not only is it quadratically more expensive to consume more, but the revenue from doing so gets send to people lower on the consumption distribution. This enhances the consumption flattening effect.
- reduces conspicuous consumption which is good for climate change
- improves labor productivity by increasing the societal savings rate (driving investment and increasing capital allocation per unit of labor), which further enhances this whole flywheel
- more things that are too long for this comment
There are obvious implementation problems though. On the face of it, it seems more difficult for me to hide consumption than it is to hide wealth, but I’m sure there are schemes to do so. The basic form of this tax would be to demonstrate to the tax agency some accounting of your wealth (savings, investments, etc) at two points in time, and then your consumption is computed based on the net inflows and outflows.
And if you raise the prices only in the US, then Americans will be buying all their stuff from other countries over mail, like we do now.
If any kind of market efficiency pricing change actually hurts the poor, it's because the people passing the law wanted it to, but many wouldn't even if done super simply, because rich people buy more stuff, use more carbon etc.
If, say, an iPhone cost $20k (because of emissions and slave/inhumane labor), obviously us normal folks (or poor folks) wouldn't own one, but would they still be produced for the grotesquely wealthy among us or would they just be scrapped or would the supply chain optimize for the new cost-structure and stop using slave labor to bring it down to a more reasonable price?
It has nothing to do with accurately pricing externalities. Of course, wealth transfers are extremely politically unpopular.
In the ideal world there would be marginal sales taxes, but that seems infeasible in the near future. Although, not inconceivable if everyone’s purchases were being tracked.
That'd push to fix suburbanisation and make mass transit cool again. Or enforce remote work.
Both?
Anyway, there are a variety of wealth redistribution schemes that can target the problem of poverty, including giving the proceeds from a carbon/whatever tax to lower income Americans.