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Meta Comment
This isn't a post about any economic theory or about debating the morality of the fixed pie fallacy. It's about knee-jerk moralistic responses to complex phenomena.
It's just weird to see such things pop up on HN these days.
It goes against the spirit of this community (satisfying intellectual curiosity) because even though a knee jerk reaction has its place, it can't help you find the answers. It just muddies up the waters.
MONARCHY, DEMOCRACY, AND THE IDEA OF NATURAL ORDER From the vantage point of elementary economic theory and in light of historical evidence, then, a revisionist view of modern history results. The Whig theory of history, according to which mankind marches continually forward toward ever higher levels of progress, is incorrect. From the viewpoint of those who prefer less exploitation over more and who value farsightedness and individual responsibility above short- sightedness and irresponsibility, the historic transition from monarchy to democracy represents not progress but civilizational decline. Nor does this verdict change if more or other indicators are included. Quite to the contrary. Without question the most important indicator of exploitation and present-orientedness not discussed above is war. Yet if this indicator were included the relative performance of democratic republican government appears to be even worse, not better. In addition to increased exploitation and social decay, the transition from monarchy to democracy has brought a change from limited warfare to total war, and the twentieth century, the age of democracy, must be ranked also among the most murderous periods in all of history.
Long live King Larry of Lanai!
Ridiculous
Like most interesting ideas, this one is NON-obvious. Try at least looking at the Amazon page for the book, or check out Lew Rockwell's enthusiastic endorsement of Hoppe's work, if you are part of the tl;dr crowd. It's FAR from ridiculous.
That's just what you get when you mix people of different ideologies and get them talking about economics/politics. That's why we try and avoid those topics.
You have to count on benevolent tyrants if you allow wealth concentration to run its course. That's hoping for a lot.
Take human transportation. We're abysmal at it. Sure, we've gotten great at sending bits around, but for a person to travel from New York to London still costs several hundred dollars. The average person who works in New York commutes for about 35 minutes each way, and the inefficacy of our transport systems (all around the world) is reflected in ridiculous real estate prices. All of this is an unmitigated disaster, and the concentration of wealth isn't solving any of it.
(For local transport, the solution is to tax landowners at extremely high rates and use the proceeds to build the world's best public transportation system in every major city, thus bringing housing costs down by increasing the available supply. The long-distance problem is harder and requires innovations in our energy policy.)
There are big, real problems for humanity to solve, and rich people living out dreams based on what they saw in "kid-gets-rich" movies written decades ago do not solve them.
"We're not really seeing this efficiency, though. For all the money being funneled into a small set of people, most of whom are not entrepreneurs but well-connected parasites, there's very little coming of value out of it."
Wow, that's such an absurdly broad, unprovable statement. You're talking about millions of people around the planet that qualify as millionaires (most of which are in the developing sections of the Asia Pacific region). So would you care to be very specific when slandering millions of people? Is Larry Page, or Jeff Bezos a parasite? How about Ellison? How about Gates? How about Sheldon Adelson, who built his empire from nothing and employs 40,000 people. How about Steve Jobs, was he a parasite? Who did Larry Ellison steal his wealth from in building the first major relational database company? How about the founders of Twitter, they're scumbag parasites, right? They're worth hundreds of millions. How about the founder of the 99 Cent stores? Was Sam Walton a big evil parasite? And on and on the list goes.
Oh but you didn't mean THOSE rich people. So which very specific ones did you mean? Care to go down the Forbes 400 and name them all? No? Because for every one you can name, I can name ten that are not parasites.
To put it another way, we know that the marginal utility of wealth decreases as wealth increases. Therefore under the standard principle of greatest good for the greatest number, social good is maximized when wealth is evenly distributed.
Oh, you're only talking about the concentrating of wealth into private hands? I reject that arbitrary separation. It still matters where wealth is concentrated, even if you choose to disregard such so long as it's controlled by people in government positions.
You don't think the $236 billion paid out to federal civilian workers every year is concentrating of wealth? Yeah right.
According to the USA Today:
"By 2009, there were 383,000 federal civilian workers with salaries of more than $100,000"
That's not concentration of wealth?
How about: "In 2010, federal worker compensation averaged $126,141, or double the private-sector average of $62,757."
Still not concentration of wealth?
Except it requires throwing out most normal definitions of "concentration" and "wealth", and requires the belief that government is the "other" rather than government (in a democracy) being some reasonable approximation of public will (I'm not suggesting that government can't, or hasn't frequently within history become a horrible other -- but one has to adopt a rather extreme anti-government position to subsequently see the current U.S. government as the enemy, and equate accountable government power with unaccountable private power).
Which federal employee can spend 0.5% of their wealth and completely change the outcome of an election to the Senate? Or 0.1% of their wealth and get subtle legislation written at a 10x ROI? Or spend 0.05 % of their wealth and fund three professorships at a university whose primary role is to intellectually buttress their own self-serving ideology?
Seriously, billionaires and those who have ownership and direct control over billion-dollar-enterprises are accountable to no one. History has shown that wealthy interests have repeatedly exploited their advantages politically and financially to the detriment of everyone else (yes, governments fail too, but rarely democratic ones). You are telling me that I should be more concerned about the power society has decided to give to their elected representatives, and relatively less concerned about the influence of an increasingly wealthy elite, who, with every additional dollar at their disposal, render less powerful everyone else?
Talking about the middle class as the concentration of wealth is laughable. It's the super-rich's wealth that is the concentration, because all that power is held by a small group that have interests and priorities different than the vast majority. A large middle class, by definition, is a bulwark against this, because they are a large amount of people with interests more in line with the general populace. They need health care, good roads, various government agencies. The super-rich really, really don't.
Also, if you think a $100,000 salary in the US is rich, you're wrong. It's very nice, but it's not "rich".