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Comment by travisp | Hacker News Reader

It's also important to realize that global poverty is at a historically low level at the same time. If you believe the Gates letter in the WSJ, then there will be practically no impoverished countries (with a few exceptions) left in just a few decades. That is unprecedented.

I would agree that many of the extremely wealthy have achieved their wealth through political power grabs (particularly, but not limited to Russia and China), but you should also expect great wealth to be created and earned honestly through a process that is lifting the entire globe out of poverty. Distinguishing between these two sources of wealth is important if you truly want to lift the quality of life around the world. Broadly fighting "inequality" of wealth wherever you see it is likely to slow or destroy this growth.

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You're arguing that income inequality helps to eradicate poverty?

Here's a hypothetical scenario:

Society A: everyone has at least 1000 wealth somethings, which is plenty to live comfortably. Some people have 1,000,000 wealth somethings. It's very unequal.

Society B: everyone has 10 wealth somethings, which is not enough to live very well. There is no inequality.

How this all works out in the real world is the domain of economics research and is probably something of an open question.

A closely related and very relevant question is whether society C, where economic incentives and politics ensure that everyone has at least 2000 wealth somethings and some people only have 500,000 wealth somethings, is better than Society A.

I think you and others in this thread are arguing a moot point. Certainly it's relevant that the median human lives a better life today than 50 years ago, but it doesn't necessarily have anything to do with whether today's income inequality is a bad thing or whether extreme income inequality makes many people's lives worse than they would be otherwise.

> I think you and others in this thread are arguing a moot point.

I didn't think I was arguing any point beyond the fact that inequality in and of itself is not necessarily bad, and that absolute levels of wealth count for something too. I have no idea what the optimal levels of those things are, nor how best to achieve them.

What's going on in this thread is people saying, "Thank goodness we aren't Society B, Society A really is better". I don't think anyone would prefer A over C, but A is clearly attainable and we are getting there- so let's celebrate our victories moving towards A, where everyone has enough, and then worry about getting to C instead of trying to take a shortcut. Because the benefits of everyone having enough are much higher priority than everyone having the same.

By capping incomes/ownership to 500,000 wealth somethings, you discourage the creation of productivity required to supply the extra 1000 wealth somethings to everyone, as required to transition from scenario A to C. By penalizing anyone making/having more than that cap, nobody has incentive to create another 500,000 (or even just 1) more wealth somethings which would, at some point, would be transferred to others anyway. In practice, such capping tends to turn scenario A into B because not only is anyone discouraged from producing more than a certain amount of value, what manifestations of wealth which exist decay and are eventually destroyed without sufficient resupply for the whole society; as wealth is consumed/decayed/destroyed, and productivity is effectively punished, the majority increasingly vote for forced redistribution of what remains, leading to stabilizing at 50 per person.

Wealth somethings don't just grow on trees, ya know. They don't last indefinitely either, much less increase commensurate with population growth & needs despite lack of sufficient incentive to create them.

Holding one down does not lift another up. Letting one person rise tends to improve the lives of others.

"Poverty" is a much-abused and much-redefined word. Many rely on an expansive legal definition intended to include as many as possible. Consider that the USA definition of "poverty line" sets some 87% of the world's population as "poor", which is a practical absurdity clouded by emotion.

Using an objective definition of "poor" focused on one's sustenance (and unaffected by whether someone else is very comfortable) we find that, indeed, world "poverty" is declining substantially. A greater percentage of world population than ever is able to obtain more than sufficient nutrition, shelter, etc to live indefinitely - to wit, aren't "poor".

And yes, if someone can improve their income/wealth to a great degree, they are most likely improving the well-being of others in the process. For capitalism to be indefinitely self-sustaining, both parties in a transaction must benefit from the transaction in an economically sustainable manner. This persistent meme of the wealthy sucking the rest of society to death is absurd, as killing customers (or otherwise rendering their income negligible) is very bad for business. Yes, wealth inequality can help eradicate poverty by giving some a reason to improve the lives of others; total wealth equality (especially when forced by government) means nobody has reason to improve themselves relative to others, consequently institutionalizing poverty as the socioeconomic norm.

pg somewhat makes that argument http://paulgraham.com/gap.html and says inequality may be a sign of health.

I did not read the article, but in my opinion, sentences as "inequality is sign of health" is nothing else than capitalistic propaganda.

There is no evidence in my opinion, that given, that common wealth all over the world has grown (what I even would doubt a little), that it is because of our capitalistic way of thinking and exploitation.

I agree, that some degree of inequality might be inevitable, but that degree of inequality we have today is ill in my opinion.

If (and I mean "if") common wealth has risen, than it might be more likely because of state of technology today. To what degree our capitalistic system does contribute to it is just unclear. Our world might be more wealthy without it. But nobody can prove either side, since we only have one world! And comparing roman times to our days today is just ill thinking.

Here's what my Chinese teacher said on that topic: 'We found that everyone being equal and poor is bad. The plan now is to let some people get rich first and go from there.' How she reached that believe I'm not sure of, but I could follow her line of thought.

That might work in some cases -- but I doubt that it works so well in places like China.

Poor people stay poor -- even when they have now working places, since most work is lowly paid. It is in fact so low paid, that people don't rise from poverty but they will fall back as soon as the boom is over.

In many countries today, because of globalization, they have jobs, but their wages are so low, that they merely can live from it.

Broader wealth in European countries or the US was created, because workers fought for their rights and better working conditions. In the US once, the state fought side by side with the workers for the common good. That was the time, the US build the wealth of its own country. Today it dumps its own wealth.

In countries like China, this is prohibited by the state.

>You're arguing that income inequality helps to eradicate poverty?

No, I wouldn't argue that income inequality is what helps to eradicate poverty, but I would argue that much (not all) income inequality is created as a result of the same process that helps to eradicate poverty.

In fact, the facts in the original article and headline would suggest that the two can in fact occur at the same time: 1) the 85 richest people are as wealthy as the poorest half of the world and 2) the world has never had as little poverty as it does now, down to a level that would have been considered unbelievable a couple of decades ago (and continuing to improve dramatically).

That doesn't mean that income inequality itself eradicates poverty (that doesn't follow at all), but it could mean that the two processes naturally happen together and that trying to prevent income inequality could also slow the world from lifting itself out of poverty.

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