How rich is too rich? Limitarianism: The Case Against Extreme Wealth
nature.com
nature.com
I'm not defending inequality, but some stats don't just make sense when I read them online and I see a need to correct.
1- https://publications.swissbanking.ch/banking-barometer-2022/...
That's what they tell us. In any case, you could just take derivatives if you would like a more definitive estimate. Or futures. The latter is crazy as it monetizes the literal future of the planet.
Point still stands…Swiss bank assets can’t buy even Africa, not to mention the whole globe.
And that’s not “what they tell us.” Swiss banks are required to report their deposits to regulators and always do that. But conspiratorial people always look for a boogeyman under the hood..
Well, knowing that, one could reasonably wonder why they never succeed. Could it be something about human nature that prevents utopias and good intentions from working as planned?
It was much, much more extreme for most of human history. So much more that I can't actually blame you for this mistake because it's that hard to comprehend how incredible the difference is.
Maybe a better way to think of it is life disparity, or living disparity.
Most folks, even those in extreme poverty, are far better off today than if they were in a similar position even 200 years ago.
Amazon alone directly employs and provide the livelihood for 1.5millions people. That is comparable to a quite a great king in the Middle Age. Amazon also can influence trade and businesses of countless other merchants and groups in other countries unrelated to these 1.5millions employees by means of blocking access to AWS or removing their products from Amazon. Its reach is global, a feat not many kings and emperors of the past could boast.
If Bezos blocks my access to AWS, I run my Terraform script on Azure. If he blocks my access to Amazon, I'll buy my next box of useless stuff on AliExpress. 5 minutes and Bezos is no longer part of my life.
https://en.m.wikipedia.org/wiki/Ostracism
Greeks used shards of pottery called ostraca (ostracon in the singular) to vote for people they wanted to exile. Themistocles was a famous general who got exiled and we actually having surviving ostraca with his name on them.
Its not 'human nature'. The 'human nature' is cooperative, helpful and 'good' by instinct:
scientificamerican.com/article/scientists-probe-human-nature-and-discover-we-are-good-after-all/
Its the minority obsessive-compulsive control freaks and sociopaths who prevent utopias and good intentions from working.
they also confuse the negative effects of market power abuse caused wealth accumulation and wealth accumulation from improving the production possibilities frontier. we have laws called antitrust to stop the former we just need to use them a lot more like we used to post ww2 and pre 1970s. Damping the latter wealth accumulation is a really dumb idea and should be avoided.
theirideas on ingeritance tax is honestly just naive. They will capture a bunch of the upper middle class guys and the really wealthy will avoid it, as they always do. What that type of inheritance tax will do is fossilize the ultra wealthy and everhbody else
maybe they do, maybe they don't. but by preference, it is easier to demand transparency from the government than to demand it from individuals. because transparency from individuals implies removal of privacy.
so i'd rather give billions to a government and have it clearly documented how they spend the money instead of demanding the same from individuals.
Also you seem to be a bit confused about the flow of funds. You aren't giving anything to anyone. This article is all about taking from some people with an arbitrarily chosen amount of earned and unspent income. if you are referring to all the transactions you willingly (if begrudgingly) participated in trading your money for goods and services you wanted from these people, only the times you had to pay a higher price because of market power abuse should be of any concern to anyone and the solution to that problem already exists in law via antitrust law, we just have to enforce it better, there is no requirement or benefit to arbitrarily confiscating these people's assets in solving that specific and actual problem.
i was referring to the citizens as a whole deciding that money should be taken from the rich and be given to the government for good use.
and i am not talking about current or past governments but about the future. as obviously the idea of limiting wealth is talking about the future too.
it should be clear that implementing this requires a government that can make good use of those funds.
governments can change, and they need to change in order for this measure to be successful.
this article needs a followup to address two points:
what kind of government do we need in order to make good use of that money?
what will the actual effect be of a limit? because the reality will not be that the government will continue to get lots of money, but those people who have reached their limit will stop accumulating money, which will change economics and leave money more distributed without the government getting all that much.
The answer to your two questions becomes obvious in a historic context. Tax payers object less to taxes when they align with their preferences so the only government that has a chance of avoiding stagnation as the rich change their structure to avoid your new policy is one that actually gives tax payers the services they want in an efficient manner (if you want services for others it means finding a way to provide them in a way that the benefit to the tax payer from network effects is equal or greater than the cost to the tax payer).
Barring an efficient and responsive to tax payer preferences government, the outcome will be stagnation, capital, and competency flight as people smuggle every asset they can out of the reach of the coercive policy then finally smuggle themselves out if they can. After a few generations this leaves you with a much weaker, more incompetent country ripe for takeover (if anybody stronger is experiencing expansionary population growth) or ripe for further stagnation and weakening until its weak enough for an external force to find taking it profitable regardless.
i am not even trying to begin speculating how to achieve the desired effects. i don't understand near enough about economy to have any idea how to actually do this. all i am talking about is that whenever there is a significant surplus of money, then it is not private individuals who should be in the position to decide how to spend that money.
the latter is the situation we have now. there are individuals and companies that have acquired an enormous surplus of money, and they get to decide how to spend it. that needs to change, one way or another.
there is also another dimension i'd like to add: this needs to happen globally. the idea that someone moves their wealth from one country to another needs to disappear because the laws about this should be the same everywhere. as long as there are countries where unlimited accumulation of money is still possible, then limiting extreme wealth anywhere else is not really going to be successful either.
in other words we are not going to be able to really address this problem until we have a global agreement that this is a goal we want to achieve.
This surplus of money idea you keep mentioning is just wrong. The rich primarily have shares in businesses and other non cash assets. They often have these because they founded businesses that make our lives better and I have no problem with them having that wealth because we are in a repeated game here and those guys showed promise in the first round, I'd rather they have the money to do angel investing, etc in future rounds to generate the next round of good business ideas to make our lives better. I have a lot of problem with these companies getting big and anticompetitive and I have outlined how to deal with that above (it's not by confiscating wealth).
Also this happening globally would be a disaster. You want many small to medium size governments all trying different stuff so that when one government inevitably screws things up you have options. You don't want a monopoly in government either.
i disagree that doing this globally would be a disaster. but maybe we need to flesh out more what we actually mean by that. i have a sense that in the end we will find an agreement.
monopoly power and market abuse is a problem everywhere. i have lived in many countries and i have seen the same patterns repeat over and over again. yes. different governments should have the freedom to try different approaches. my point is, that we need to agree globally that market power abuse and anticompetitive behavior is a problem and needs to be stopped everywhere, and so no country may create a safe haven to enable those companies to continue their behavior.
People have identified the private jet as the most expensive thing a person can buy that substantially improves your life.
Beyond that point it's more of a status game than real improvement. Yes, a 200ft yacht is nicer than a 50ft yacht, but the difference is marginal. The 7th house isn't adding much.
Boats scale in ^3 - you'll get a lot more space (volume) in 200ft yacht.
50ft sailing yacht is near minimum for comfortable world cruising. At this size you'd still be crewing and fixing shit yourself.
It's also a reason wealth is a hard thing to really track when you want to limit it. Is that corporate jet 1/5th the CEO's because he is 1 of 5 that uses it or is it not part of the CEO's wealth at all? There's not really a clean way to cut this sort of thing that I've seen that doesn't either lop off things that aren't personal wealth by accident or allow squirreling away personal wealth in ways it doesn't get counted. That's the hardest part of this kind of thing IMO.
Interesting to learn that limitarianism is an ideology that respects national borders.
They desire wealth equality and consider it morally sound. That doesn't mean they also have an answer to every problem external to them or expect a global kumbaya about it overnight. This does not preclude the idea being anything in the same way one wanting safety regulations in their country isn't precluded by solving every other safety regulation problem around the world first, at the same time, and via the exact same steps.
I don't even particularly agree with the idea, this line of "gotcha" just doesn't follow.
Disagreeing with an ideology comes down to more than parading a surface level claim to declare the entire idea misaligned. You have to dissect that idea, try to find ways to defend it, then cleanly counter those ideas. Throwing up a facetious one liner is the exact opposite of inspecting a philosophy and it's easy to misunderstand any set of morals that way.
As another example of why it's poor form of logic: "He thinks it's okay to kill some people but not others, that must be unethical and misaligned - why does it matter who it is it should always apply equally! The morality is therefore inherently flawed unless this is corrected." when the actual moral was that there are only certain cases it makes moral sense to kill someone (with some justifications if you dive into it) like compassion for terminal illness. Instead of the surface level "gotcha" denial you would dive into what these reasons might be and why you disagree with them, not just blurt the surface disagreement. This tends to be a lot more discussive of the idea instead of immediately dismissive, even when you ultimately disagree with it.
But that isn't really the question(s). The real questions are:
1. Can you morally take what others have, just because they have more than enough? By what standard of morality? And, given that "don't take other peoples' stuff" has worked out pretty well as a standard of morality, what justification is there for choosing a different one?
2. More broadly, there will be collateral damage from any approach to take wealth from the wealthy. Will that collateral damage leave society better or worse off than the status quo?
Probably the most minimalistic way to do it would be a progressive tax on wealth above 10 million dollars. But even that would lead to massive attempts to hide assets (or get them out of the country), and more and more invasive attempts to detect such things. And the invasiveness itself is damaging to society.
I know if I had a billion dollars there are lots of things I'd fund. Why should I not be allowed to do that? If I had a trillion I also have things I'd fund that I couldn't at a billion
We already allow taking from others, from whom and what justification used is simply a matter of ideology. The current system is what we're used to and so it seems necessary and inevitable to us, anything else an abhorrent deviation.
Are you suggesting that workers do not have employment contracts where they agreed to trade labour for wages at a fixed price?
Workers always have the choice to take the risk of starting their own company for higher potential earnings.
Wealth accruing to owners rather than the workers who produce it is older than employment contracts. I'm pointing out that this arrangement is the result of a set of choices that have been made, and we could choose otherwise. The fact that we consider this one approach correct and fair and not others is not inevitable.
Profit is not surplus value created by worker - that’s a 4 year olds understanding and negates all the other components of the system of which labour is only one.
We have tried “choosing” various “arrangements” (or more correctly, competing economic systems) and evidence points to capitalism being the correct approach to maximise liberty, growth and progress.
B) These workers are free to work on their own - why don't they form their own company or become self employed?
To begin, you know nothing of the circumstances of millions of people. Certainly not enough to make sweeping statements.
In 2023, there were 5.5 MILLION new businesses started in the USA. Do those people all have generational wealth? of course not.
The reality is it’s easy to start a business but very hard to succeed.
It is simple - so simple that 5.5 millions of Americans can use their family money to do it. That doesn't preclude there being 360M Americans that don't start a business, because they don't have family money.
Sweeping statements on both sides I think.
I completely agree on risk though and it highlights the core of the argument - building a business is time consuming and risky in a way that being an employee is not.
That’s one reason why business owners are able to capture more profit. They took more risk and placed themselves into a situation where their earnings are not bounded by a single contract.
Everybody has free will and could start a business but not everybody is capable due to skill, capacity, circumstance, etc.
Therein lies the irony. None of the people whining loudest will start a company because it’s risky and fraught with danger but they want all the spoils of ownership and responsibility.
My point isn't really that people from well-off families are more likely to start a family, although that probably is true as well. My point is that people coming from a regular background are more likely to start less riskier businesses, less chance of failure but also less chance of reaching a billion dollars.
Just a few decades ago, that CEO would have paid his fellow countryman a modest salary and would have also made less themselves.
When you just imagine the staggering gap we've created, it feels deeply unfair. And it's not just a matter of starting a business. It is a structural moral failing.
Instead, useful idiots everywhere are proposing to add restrictions to the parts of the system working well.
You're right. So I guess we are agreeing that the hyper-capitalist system we currently have relies on exploiting others?
We can build a system with less sharp edges without blowing it up.
Like worker representation on boards (Germany does this), cap gains that reduces as you hold investments (Clayton Christensen proposal), and holding the countries we outsource to similar environmental and labor standards.
I imagine this would be a controversial subject anywhere, let alone HN, but I think implicitly is some belief that some individual's (or institution's) contributions are overcompensated relative to their actual contributions. I think as the amount of wealth increases, the probability that that wealth represents some equitable and rational reflection of actual contribution of value relative to others goes down.
The problem is that in any market there's all sorts of "leakage" and hidden unrecognized contributions just as much as there is hidden costs (environmental costs etc) of any business or individual. Also fraud, misrepresentation, irrational decision making on the part of consumers etc.
So my objection to say, Bezos' wealth isn't so much that he has more than he needs, it's that I do not see any way to rationalize his wealth relative to his contributions. The ideas behind Amazon would have probably proliferated anyway, the company is more than Bezos, including the many employees etc, and I think a lot of arguments can be made that Amazon's total societal value is controversial or debatable anyway.
What's a "correct" evaluation of Bezos' wealth in terms of societal value? I have no idea, it's probably a lot, but I do agree that at some point the wealth becomes so extreme that it's more likely to reflect societal and economic failures in value appraisal (implicit or explicit) than some actual justifiable value he has provided.
Regarding (2) we do this all the time in all kinds of indirect ways anyway. There's an assumption there about ownership and the conditions under which that is legally instantiated that is maybe at the heart of what needs to change. If you set up the rules to prevent certain things from happening in the first place, you don't end up "taking" any wealth.
I feel like this is the sort of thing that is so involved it would necessitate a book-length treatment instead of a comment on HN.
A subsistence farmer may be personally responsible for 100% of their wealth. Anybody wealthier owes society.
Our wealth is due to standing on the shoulders of giants.
So that abstract debt scales linearly with income? Why should a programmer that made his wealth from selling an app on the internet owe more than a truck driver?
Wouldn't it be more reasonable to tax consumption according to its cost and effect on the society, rather than income?
What great wealth is useful for is power & status. But you often don't consume wealth to gain power & status -- spending $44B on Twitter isn't consumption.
The best way to tax the wealthy is to tax wealth, not consumption nor income.
I don't know what "marginal utility" even means, who determines it and based on what objective facts, and I don't think it's relevant anyways - taxes should be payments of the debt to the society, debt is not determined by utility in any way.
Buying a company is investment, not consumption - so yeah, that shouldn't be taxed. I don't care about "the best way to tax the wealthy", I care about a fair way to pay for what society provided. If the society didn't provide to the wealthy more than it provided to the not-wealthy, it's not fair to demand more.
Yes, exactly. Consumption taxes are a tax on utility. The wealthy owe their wealth to society. Their debt is relative to their wealth, not their consumption.
If I can make my wealth without causing any effect on society, there's no reason my debt should increase - my debt doesn't scale linearly with my wealth, it scales with whatever the society provided to me.
If I make my wealth by selling an app on the internet, there's no reason I should pay as much as someone who polluted the environment in the process by shipping stuff all around the world and used fossil fuels to make the products.
And if I make my wealth by selling stuff in Europe, there's no reason it should be taxed in US just because I live there. At the very least, it should be taxed at the place where the society actually provided something that led to earning it. Because otherwise I'd just move to a nice tropical island with no wealth tax.
If we lived in another multiverse where Elon Musk was only worth $100 million and his other $200 billion were in bank accounts of 100 million other people, none of us would be the wiser about this one.
So people with wealth close to $10mil should keep all their money in cash and avoid higher-return investments, since the the excess above $10mil would be confiscated? Besides being morally wrong, that would discourage investment.
The current global legal maze that allows all those money hiding places is exactly due to similar efforts in the past, they are half-assed at best. But it keeps wealth management companies busy, so at least somebody benefits at the end.
(And, of course, it would make sense if the $10m maximum was inflation-linked; and then as such it would make sense to invest to maintain the capital against inflation.)
https://www.investopedia.com/articles/tax/10/history-taxes.a...
I don't know how well that was at limiting wealth. Maybe people found ways to hide the money so it didn't get taxed. It also didn't limit wealth. 6% of a trillion is still 60 billion
Just because we are currently making one set of choices does not mean we could not be making a different set of choices.
If something you own appreciates and your wealth increases as a result, how quickly before you have to divest that asset?
What about non profit organizations? What about IP? What about software? When Minecraft was sold by a single owner, it was worth 10 million many, many times over. When exactly would it have been necessary for him to sell his company, and who would he have been obligated to sell it to?
Worse: Most of the circumventions of income tax are to increase in wealth without having income (as recognized by the tax system). A wealth tax is therefore a fix for your complaints about income tax.
Look, I'm not convinced a wealth tax (or worse, cap) is the answer. I suspect it may be worse than the disease. But your arguments against it seem pretty weak.
Then when you die, it all is converted to a dollar value in transferring to others and at that point there should be a massively hefty tax above a certain dollar value. We need to eliminate dynasties and the use of money for influence. Cap wealth at $50m or something.
So you wanna tax my mortgage?
> Cap wealth at $50m or something.
That just encourages hiding it.
If you are worth $50m+ and then use a mortgage to generate cash rather than take cash out of your company in order to avoid triggering taxes that affect everyone else, then yes, yes I do.
> That just encourages hiding it.
Well then I guess we should just give up trying. Let’s keep allowing our economy to look more and more like Hunger Games rather than try literally anything at all.
If you eliminate the ability to build colossal wealth you leave open only the option to pursue significant power.
Doing so will... not turn out well.
Try harder.
Or Xi Jinping himself, whose family has amassed $1 billion+ [2] despite his modest $22,000 salary.
1- https://www.reuters.com/article/idUSBREA2T02S/
2- https://www.smh.com.au/world/chinese-leaders-family-worth-a-...
Personal opinion: Communism is impossible (in the foreseeable future)