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Comment by marknutter | Hacker News Reader

The 0.1% aren't sitting on stacks of gold bars. The money is still flowing through the economy, it's just in the form of stocks, bonds, and real-estate. I've never heard a convincing argument for why the 0.1% is harmful to society.

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Even worse -- on top of the shaky ground of the argument that "income inequality is a huge evil" is built a remedy that the government is somehow going to equitably redistribute the wealth without destroying a great deal of it in the process.

Income mobility is so much more important as an economic concern over income inequality.

This is a tired mantra. It does not bear close scrutiny. It is a meme created by the wealthy and powerful to maintain their wealth and power. It is similar to the belief inculcated by royalty that they rule by divine right.

You call it a "tired mantra" and a "meme". If that were the case, then I'd think that you'd destroy my position with data vs a couple of lines of rhetoric.

To what kind of scrutiny are you referring? I'd think that if governments were good at redistributing wealth, one of the many communist countries would have been a resounding success.

Can you point me to one?

I can point you to many information sources that show that economic freedom is closely correlated to average wealth and higher standards of living.

Wow. You managed to write all that without actually including a word that might have supported what you were saying. Maybe it's a "tired mantra" because it's true.

Exactly. Nobody talks about income mobility. Income mobility in the US is the same as 20 years ago despite increasing inequality.

Income mobility for the poor is highest in the places where the infamous 1% live.

http://www.equality-of-opportunity.org/

How about start with this:

http://www.economist.com/blogs/lexington/2010/10/estate_tax_...

People much wiser than us founded America upon the principle that extreme wealth is incompatible with democracy.

EDIT: For emphasis, "Extreme" wealth is what I'm talking about here. Whatever arbitrary number we are choosing that allows this to happen--our potential future president courting a single citizen's favor:

http://www.bloomberg.com/news/2014-03-29/republican-presiden...

> People much wiser than us founded America upon the principle that extreme wealth is incompatible with democracy.

You need to go back and take a look at early American history. Many of the founding fathers were business owners and/or extremely land wealthy and had a strong interest in personal property rights as a result. They needed the middle class of the day to agree to the ratification of the constitution which led to the bill of rights.

Basically they founded America on the principle that their extreme wealth was incompatible with the rest of the colonials without democracy.

So you are saying they did it selfishly or to protect themselves? That's a pretty audacious claim considering many of the actions of these leaders. Where is the evidence that they had some ulterior motive all along?

I am not the first person to make this "audacious" claim. Feel free to assimilate multiple sources into your understanding of history, but I find much of Howard Zinn's writing to be enlightening.

http://www.historyisaweapon.com/defcon1/zinntyr4.html

Thanks for the link. I don't entirely agree with much of the chapter. I mean, I think there is a lot of cherry picking of evidence to support his theory. For example, I've always heard that one of the reasons people came to the Americas (among some other reasons) was the wealth inequity issue:

http://www.pbs.org/wgbh/pages/frontline/shows/credit/intervi...

I feel it's more a question of why should such a small handful of people control such a massive proportion of the world's wealth and power. Especially if it's some form of dynastic wealth.

And then there is such a huge, sickening disparity between how the poorest populations of the world live - well over a billion people do not have even their basic needs met - and the excesses of the ultra-rich.

I don't have a solution, but it's galling nonetheless.

You made me come up with something: I don't have a problem with the rich, but not at the expense of others. (And we are not talking about everyone a luxurious car, but for some it's about not having a roof and bread.)

And we are not talking about everyone a luxurious car, but for some a roof and bread

If the discussion were about providing people food and shelter, then we wouldn't even be debating any longer. Those things have been available to everyone in the USA for a long time.

The USA consists of less than 5% of the world population and is not a particularly representative sample. Not really sure why you're using it as a frame of reference to discuss poverty.

On a single night in January 2013, 610,000 people were homeless in the united states. 215,344 of those people did not have shelter.[1]

This is about 1 in every 500 people living in the United states.

Furthermore, 15% of the nation is below the poverty line, including 1.65 million households living on less than $2 per day[2].

So, uh... we're not really there yet. There are lots and lots of people in the United States who are just scraping by, living day to day, without hope of things getting better. Why should someone who was good at moving money from place to place not have to work past the age of 35 unless they want to? Why should we who merely shuffle bits from place to place make enormous amounts of money doing it, and have the freedom to pursue our interests, while millions literally suffer?

Now, it is okay for us to pursue these interests, to be happy people, but please don't forget what actually is out there. Be compassionate and do what you can to help.

[1]https://www.onecpd.info/resources/documents/ahar-2013-part1....

[2]http://npc.umich.edu/publications/u/2013-06-npc-working-pape...

Especially if it's some form of dynastic wealth

Now here's where I'm NOT going to sound like a Libertarian in this thread and agree with you.

Dynastic wealth should be cannibalized in the same way that big chunks of spaghetti code should be thrown away and rewritten. Dynastic wealth is demonstrably not earned and it's harmful to the mobility of others in society.

Dynastic wealth was earned by somebody. The way I look at it we should respect the spending decisions of people who make the money, and in this case the decision was to give it to their children. And it's not like society doesn't take a big bite out of large inheritances - the US takes 40% of the really large ones.

And I don't see why you think it's "harmful to the mobility of others".

It may not have been. Throughout history up to the present day there has been much acquisition of wealth via slavery, war, corruption, and other such immoral acts. Wealth is not necessarily earned in as fair a manner as the word implies.

I'm sure that's true in some cases, but I doubt that's the normal case, and it's incredibly unfair to lump the people who earned their wealth with those who accumulated it in some underhanded way.

Dynastic wealth was earned by somebody

I get that, but that somebody is gone. The freedom that we allow each other in life to make what we will of our own labor is gone.

the US takes 40% of the really large ones

Do you think that the Kennedys lose 40% of their wealth every time one of them dies?

Hardly. That money is locked up in trusts and other tax avoidance vehicles so that very little is lost when a member of the family passes. The people losing large amounts due to inheritance taxes are the ones on the bubble who maybe have a few million dollars to pass on, but aren't steeped enough in wealth to be able to take advantage of the real loopholes in the system. As with most cases, those people in the upper middle are the ones who bear the brunt of being "rich" without the protections of being truly wealthy.

And I don't see why you think it's "harmful to the mobility of others".

The biggest threats to a thriving free, capitalistic society are monopolies and corruption. Big government, crony capitalism, corporate monopolies, massive military-industrial complexes, and dynastic wealth all contribute heavily to those core problems. They are so fundamentally powerful that they rewrite the rules(laws) of the society to protect themselves by stifling smaller players.

Dynastic wealth is power without the wisdom of having earned it. It's easy access to the force of government without really understanding how government impacts the capitalistic foundations of the society.

I sympathize with those who want to leave money to their children after they die, and I definitely think that you should be able to leave something to them - but the dark side of capitalism that is dynastic wealth should really be dealt with.

>I get that, but that somebody is gone. The freedom that we allow each other in life to make what we will of our own labor is gone.

I don't see why that would matter.

>Do you think that the Kennedys lose 40% of their wealth every time one of them dies?

Oh, I agree if we're going to have laws on the books we shouldn't allow rich people in Congress to write their own loopholes.

>The biggest threats to a thriving free, capitalistic society are monopolies and corruption.

I don't think monopolies are much of a threat, but corruption certainly is. But people with a lot of money are mostly interested in protecting their money from a rapacious government. As opposed to other powerful groups, like labor for example, which are trying to carve out special protections and set asides.

>Dynastic wealth is power without the wisdom of having earned it.

And that's why wealthy families usually don't stay wealthy for more than three generations or so. How many families that were fabulously wealthy in 1914 are still fabulously wealthy? Of the top ten richest people on the Forbes list seven have made their fortune.

>It's easy access to the force of government without really understanding how government impacts the capitalistic foundations of the society.

The remedy to that is to have a government that does less, not one that destroys competing concentrations of power.

As long as a more equal distribution of wealth would reduce suffering, we can certainly consider wealth inequality harmful.

One would have to have rather alien values to think that luxuries for a few are preferable to food and health for all.

Let's look at Venezuela to see how that is implemented. Centralized power is too toxic to be able to distribute anything "fairly".

Or Sweden? I hear it's a dystopian hellhole.

Except if the act of adjusting that distribution causes economic harm you end up with a more equal society where the poor are poorer.

> As long as a more equal distribution of wealth would reduce suffering, we can certainly consider wealth inequality harmful.

First you would need to prove that.

Consider a world with perfect income equality. In such a world, there is no economic incentive to work at all.

Second, how do you plan on equalising the income without committing an act of aggression against innocent people?

> One would have to have rather alien values to think that luxuries for a few are preferable to food and health for all.

That's a false dichotomy. What if, say, everyone gets poorer in the process of making it less desirable to be rich?

> First you would need to prove that.

Right.

> Consider a world with perfect income equality. In such a world, there is no economic incentive to work at all.

Nobody needs an economic incentive to work (please prove me otherwise). In fact, an economic incentive is the only reason we screw other people over and produce shitty work.

To back up my claim: The birds with the least natural enemies and the richest environment spend the most time mating (which is our built-in incentive to do many great things).

> Nobody needs an economic incentive to work (please prove me otherwise).

"Nobody does X" is too strong a statement; when you say something like that, the burden is on you to prove it (by asking everyone in the world, for example). I personally know quite a few people who wouldn't work if they didn't need to.

It's true that some people don't need an economic incentive to work, but others do.

It's not the 0.1% are harmful. There will always be 0.1%, that's how percentages work. It's the proportion of wealth they control.

Would you support a system where 1 person controls 100% of the wealth? If not, why not?

If the current situation where the 1% control 35% of the wealth is not a problem, at what point do you think it would become a problem?

Wealth inequity is only one factor. Since we're throwing around hypotheticals, which society would you prefer? One that has high income equality, but most people are poor (i.e. Bangladesh)? Or one with low income equality, but most people are middle class (i.e. America)?

Where would you like to live?

Yes, their wealth flows through the economy in a way that benefits rich people. You can see this most obviously in charity work where many charities are largely about catering to whatever rich people want to do. (How many opera houses do we need?) We are lucky that some of those at the top are relatively far-sighted, but this is far from universal.

Buying power also affects who businesses cater to and which startup business plans seem promising. As a result, a lot more effort goes into solving rich people's problems. Businesses segment on income (Walmart versus Trader Joe's versus whatever the very rich do.)

Something like guaranteed income would also flow through the economy, but at least the first hop guarantees more attention towards the problems of the poor, due to a bit more buying power. There would still be plenty of ways to make money.

The top 0.1% is not by definition harmful to society, but harm can come from when the 0.1% controls an increasingly disproportionate share of wealth. But of course, income inequality is not bad by axiom either.

The rub of increasing income inequality is that it undermines everyone benefiting from increasing wealth and technological advance (e.g. the hope that in the limit we'll approach a star-trek society).

Overall, we want a society in which wealth for all increases -- this is the futuristic dream of us working 15 hour work days by virtue of massive productivity gains from technological advance. Yet what seems to be currently happening in our economy is that technological advance enables increasing profit for a select few.

So happy to hear you say that. So much of the whole 99%/1% (or whatever arbitrary divide the pseudointellectual youth choose to focus on) fascination is fueled by envy. "Ugh, why should those corporate fat-cats have so much extra money when I can only afford the lesser quality otterbox for my new iphone?!" Inequality is not intrinsically bad. In fact, it's commonly accepted that so much extra wealth does not bring happiness, so perhaps we would do better to covet less and appreciate more.

I've read plausible arguments that the richest fortunes do not benefit society by being in play and that much of it is parked in various places, some off shore.

Their money may very well be funding lots of start ups. The wealthy employ lots of people.

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