Why the super-rich get richer
asserttrue.blogspot.com
asserttrue.blogspot.com
Not sure it's that cut and dry, nor that the rise of computers could be the cause of such a sharp inflection point. Bretton Woods ended around 1971-73...In fact the real wage of nonsupervisory workers peaked in 1973[1]
Except nothing about this story flies: first, the microprocessor did not produce some magically more productive economy. First look here: http://www.intellectualtakeout.org/sites/default/files/image... You can see that world real GDP per capita did not suddenly increase after the 70s, in fact growth actually slowed a bit.
The story also doesn't agree with common sense - microprocessors didn't reinvent the economy, they couldn't even deliver the "paperless office" we were promised (something particularly close to their domain). The fact is that productivity has been growing at basically the same boring pace, and microprocessors are just another boring form of automation, not a game-changer.
Finally, believing this story requires us to ignore all of the other things we know about - the introduction of fiat currency, the Fed's shift to aggressive inflation-squashing (read: preventing full employment), massive consolidation of corporate ownership, financialization of the economy, enormous tax cuts for the wealthy, trade policies designed to reduce worker bargaining power, etc., etc. Are we to believe that none of these changes had an effect?
Seriously, economists have actually worked out the reason behind the wealth gap, he didn't even address or critique the prevailing theory. Most likely because he doesn't even know what it is.
Even then, very small numbers of people were actually working with the computers and the paper office was still in full force. It wasn't until the 1980s that computers were ubiquitous in a way that it clearly affected the vast majority of the population.
I buy your argument that the rollout of computers doesn't quite line up as it ought to if it were the primary factor behind wage-productivity decoupling, but I'm much less familiar with Bretton Woods so I'd appreciate any dot-connecting you can offer.
In a paper money system, you have inflation of 10%-30%. (The CPI is currently low, but it is a misleading and biased statistic.)
When you have 10% inflation, who gets that new money? It isn't workers. That 10% goes to the government (deficit spending), big banks (quantitative easing), and large corporations (who can borrow cheaply).
Inflation concentrates wealth among insiders, because they get to print and spend the new money ahead of everyone else. 10%+ annual inflation is a 10% tax on the total value of the economy, with it all going to insiders.
When volatility is high, everyone has to have higher prices to help plan for an uncertain future, so it is a drain on all aspects of an economy. If inflation were zero, then planning could be perfect, and there would be a much more efficient system. However, zero inflation is nearly impossible to do, since there are accidents, demand shocks, wars, and other events that shake an economy. History has shown that deflation can lead to a deflationary spiral, seriously damaging an economy and putting everyone out of work, so the Fed targets slight inflation. This provides protection against runaway deflation and also provides stable, predictive economy so people and businesses can plan. See, for example, the Great Moderation and related literature [3].
The CPI is quite accurate, and matches multiple other places that also measure inflation, such as the MIT based Billion Prices project [4]. If CPI and actual inflation were vastly different, there would be a host of financial products one could invest in that capture the difference, since many items are tied to formal CPI. Knowing people that work in places that would create such trades, if CPI were as far off as you claim, I've asked them, and they say there is no arbitrage. Can you show me where people are consistently making money trading with their "better" knowledge of inflation versus the standard CPI? Finally, if inflation were 10%-30%, as you claim, then prices would double every 2-7 years, which is clearly wrong. Using your claims, prices from 1971 till now (2015-1971=44 years) would be 80 =2^(44/7) to 4,000,000 = 2^(44/2) times higher, which is clearly false, bordering on ridiculous.
You're also wrong about who benefits from inflation: basically borrowers (you and me and mortgage holders, etc) owe less money in real terms, and lenders will get paid back less than they lent, in real terms. Over the life of a loan, future fixed payments are easier to make, not harder.
So inflation transfers value from lenders to borrowers, not the other way around. Inflation hurts banks and benefits borrowers. You have your claims backwards.
[1] http://pages.stern.nyu.edu/~ekerschn/courses/c150042/lecture...
[2] http://en.wikipedia.org/wiki/List_of_recessions_in_the_Unite...
What the CPI would look like if its methodology was not constantly being adjusted: http://www.shadowstats.com/alternate_data/inflation-charts
CPI is rarely adjusted, and all reasons are quite well explained at the BLS site [1]. As people buy less horses and more cars it makes sense to adjust the basket of goods to match what people currently buy, not what they used to buy. They also provide the methodology on how data is gathered, processed, what changes were made, why, and the effect on future numbers using both old and new methods. They select new methods because it tracks what CPI is supposed to track better than old methods.
Shadowstats is often a nonsense site. The article you link provides no methodology, and as I pointed out above, if the inflation they claim existed we'd see it in massive price changes. Those changes are not there. Do yourself a favor: take the shadowstats claimed inflation, start in 1985, and compute how prices should have increased. Then look at prices of those goods from 1985 till now. You'll see it's nonsense.
The Billion Prices project is an independent group trying to compute inflation as accurately as possible. Here [2] is one place showing how well BPP and CPI match up.
And as above - if shadowstats, or any group had a way to compute inflation that was much different than CPI, there would be huge wealth flowing to them from simply trading derivatives based on the mismatch between the official inflation and their more accurate number. I've seen no one doing that, and I've looked. Care to show me who is making all this money based on having more accurate inflation numbers?
Inflation and deflation cycles, compared to now, were more severe, yes, but we ALSO have far more liquidity in markets and a wider swath of the population is educated and participating in capital markets, directly or indirectly. That can contribute to stability. Comparing before/after without taking the fact that the world has completely changed in those two epochs is completely risible.
Voila! Wage slavery.
Are your workers keeping their savings a hundred years? It takes about 21 years for inflation to cut the value of savings in half.
Workers tend to have loans, such as car, house, college, etc. Inflation helps them by making their loans cost them less to make fixed payments on over time. Inflation costs lenders, not debtors.
If a worker has substantial savings, then they should not hold it in cash, which has always been a terrible idea. Diversify, and invest in multiple classes of assets.
Thus inflation is a net benefit to workers.
Doesn't really apply after 1980. In any case, workers typically don't hold large cash savings - what matters far more is the effect of inflation vs pay negotiations. The higher the inflation, the more frequently workers need pay rises and the larger they have to be. This makes the stakes higher and provokes strikes. This was a big driver of the UK industrial strife in the 70s.
http://www.livingstandards.org/wp-content/uploads/2012/02/De... has a UK-US comparative study but only uses data from 1972 onwards, which doesn't help. It claims that runaway health costs are a big part of the equation, among other things.
(I want to find some UK graphs covering the same time period to see whether they show the same effect, and for other non-Bretton Woods countries as well)
The investors are the lenders, not the borrowers. That's what the term "investor" means.
Wonder how much that has to do with this ... (and also how interesting how suddenly keen the "free market" fanatics were to take government money ....
Maybe not, but seems plausible.
Correlation does not equal causation.
For any reasonable definition of rich ( * ) (by total wealth or by total income, for example), and for any dataset from which I can check the claim "the rich get richer," I have found that the majority of those in that definition of rich do not stay in that class. So it seems far more accurate to claim the rich get poorer.
It's hard to find such datasets, but some that you can find that demonstrate this are (I don't care to chase them down, and my notes on it are not where I am sitting):
1) the majority born into the top quintile don't end up there (although the most likely quintile to end up in is the top). I think St. Louis Fed has studies on this.
2) the richest Americans, as measured by Forbes 400, demonstrate that the majority are first generation in that class. This you can check yourself quite easily.
3) Various tax studies show that people don't stay at the top for income.
Sure, a wealthy person rarely falls to zero, but once you fix a definition of rich and see how long people in that class stay at that definition, the majority simply do not last.
(*) if you define rich as the top 90% of people by wealth, which is not a very common way to define it, then the majority stay in it over time.
However, many people assume the rich are some monolithic group, hence the maxim "the rich get richer," which most people take to mean a rich person gets richer, not most rich people fall from that class and different people enter that class with even more wealth.
Thus I commented on the fact (it seems) that rich people usually do not stay rich, for any reasonable definition of rich. Other people become rich.
This is a common trend among rich people and among experts who actually study economics it is also the prevailing reason behind the wealth gap.
> 2) the richest Americans, as measured by Forbes 400, demonstrate that the majority are first generation in that class. This you can check yourself quite easily.
Rich people as individuals tend to stay rich. However wealth is diluted exponentially when passed from generation to generation as inheritance. Think about diluting $100 amongst nodes for each level of a binary tree. The root node gets 100, the next generation each node gets 50, the next gets 25, 12, 6, 3... two generations and already the wealth is divided by four, and this only accounts for people having two kids, rich people tend to have much more!
Can you provide a dataset with some cutoff for "rich," and demonstrate people in that class stay there? The entire point is I've tried to do this, and for each dataset that allows measuring such a claim I get the opposite conclusion. The majority fall out of that class, even within their own lifetime.
If a person has 1B, and later has 100M, they have lost value. If your original definition of rich is 1B, then they fell out. So if you now move your definition of rich to include 100M, then you also need to consider all people that had 100M, not just the guy with 1B. Now you'll find most don't stay at 100M, most fall. Say you then move your definition to 10M. Then 1M. Then 100K. Repeat the process, but you're moving the definition of rich which is not accurate reasoning.
I've done all this, and your claim is unsupportable from any dataset I've examined. For each dataset where I could see how many people started at some level of wealth or income, within their lifetime (and often much shorter), the majority fell below that wealth or income level.
Can you provide a dataset showing otherwise? I posted how to get a few counter to your claim already.
Isn't that "Capital in the Twenty-First Century"? It's proved.
Care to cite where in that book they make a definition of rich, and then show that exactly those people in the rich group remain there?
I have not seen anyone claim the books shows this. The class of rich people is very fluid, as the above datasets show.
In academic circles, there is ample criticism of that book, so much that it's considered wrong on many points by economists of all political persuasions. It's right about some things, provides a lot if good material, but is also wrong in many things, so don't just take all it says as truth without reading ample scholarly work after it's publication. Google is your friend here.
No, there isn't. Only Fox News believes that.
You clearly haven't read Piketty's book. Among other things, he has excellent data from several countries showing most of all wealth is inherited. Some 70% in France, over 50% in the U.S. That is, in France, for every 100 euros of wealth of any type whatsoever, 70 of those were inherited from one's parents. In the U.S. for every $100 of any sort of wealth whatsoever, over $50 was inherited from one's parents. Most of all wealth is inherited, not worked for.
By definition, dynastic wealth shifts around a bit. A billion into this trust (dedicated for grandchildren and great-grandchildren), a billion into that trust dedicated for maintenance of the family's real estate holdings. A given individual may fall in or out of limited rankings such as the Forbes 400. But so what? The 493rd richest person in America is still very very rich, and will remain so until that person decides to distribute their wealth to their heirs (and for that matter, moving out of the top 400 may have been due to providing for the heirs).
There are also lots of studies about income mobility. The U.S. has lower income mobility than most nations. In general, if you are born poor, you're quite unlikely to ever reach the top quintile of income. (The top quintile of household income in the U.S. is just over $100K, which I suspect many Silicon Valleyers wouldn't even call "rich".)
So one way to write this would be: if you are born poor, you are very unlikely to ever live in a household where there are two earners that each earn a bit over $50K. About 8% of those born poor will ever reach that level of income.
Here [1] is the first page google returned when I asked for a summary of criticism. Although many would dislike heritage, the critique contains ample references to well respected academics (including some from MIT, Yale, etc.)
Here's [2] a widely circulated report on a paper by a MIT grad student showing a significant alternative explanation to Piketty. Here's the actual paper [3].
Here's Krugman [4], pretty much of the same political persuasion as Piketty, summarizing some serious critique and errors in Piketty.
Here's [5] other economists claiming Piketty had conclusion altering errors in his data (but if I recall, Piketty later fixed some, but not all, of these errors. The corrections are not in the book as far as I know)
Here [6] famous author, economist, and statistician Nassim Taleb proves that Piketty's math is flawed. Here is an easier intro (andother critiques, repeated in the literature) from his notebooks [7, #156 and #158].
I could go on and on, there is ample research going on, but I've amply demonstrated that your claim that it's only Fox News is completely wrong.
>The U.S. has lower income mobility than most nations.
Only when measured as quintiles, and a lot of that effect is the US has larger dollar value quintiles than most. If a quintile here takes $40K to move across and only $30K in another country, you can have people here with more dollar mobility and less quintile mobility. Please check your source for your claim and see if they measure by quintile or by PPP adjusted dollars. There is a difference.
Here [8] is an overview of some issues and references to papers showing how the results change if talking about quintile mobility or dollar mobility.
Related, probably the largest study to day on US mobility [9] based on tracking IRS data found that mobility in the US is relatively unchanged for many decades.
>In general, if you are born poor, you're quite unlikely to ever reach the top quintile of income.
In terms of absolute mobility, 90% of those born into the bottom end up better off than their parents [10, Fig 1]. From the same dataset, the majority born into the bottom quintile do not stay there [Fig 2, 55% leave], and similarly the majority of those born into the top quintile do not stay there [about 55% leave].
So one way to write this would be: if you are born poor or rich, you are most likely to move towards the median.
[1] http://www.heritage.org/research/reports/2014/09/understandi...
[2] http://www.economist.com/blogs/freeexchange/2015/03/wealth-i...
[3] http://www.mit.edu/~mrognlie/piketty_diminishing_returns.pdf
[4] http://krugman.blogs.nytimes.com/2014/05/24/is-piketty-all-w...
[5] http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144...
[6] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2434363
[7] http://www.fooledbyrandomness.com/notebook.htm
[8] http://www.heritage.org/research/reports/2013/07/a-guide-to-...
[9] http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf
[10] http://www.frbsf.org/economic-research/publications/economic...
Good economists expanding on or critiquing small parts of a huge work doesn't represent any sort of repudiation of it; it's the scientific process. And the people paid to object to it (Heritage et al.) will naturally do what they are paid to do; that too represents no sort of repudiation.
Krugman on Piketty: "It’s a remarkable claim—and precisely because it’s so remarkable, it needs to be examined carefully and critically. Before I get into that, however, let me say right away that Piketty has written a truly superb book. It’s a work that melds grand historical sweep—when was the last time you heard an economist invoke Jane Austen and Balzac?—with painstaking data analysis. And even though Piketty mocks the economics profession for its “childish passion for mathematics,” underlying his discussion is a tour de force of economic modeling, an approach that integrates the analysis of economic growth with that of the distribution of income and wealth. This is a book that will change both the way we think about society and the way we do economics."
For someone who hasn't read the book, you sure have a lot to say about it.
> the majority of those born into the top quintile do not stay there [about 55% leave].
Another way to write that would be that 45% of those born into the top quintile never have a single year in their adult lives (age 18-110) when they don't have a household income of at least $100K. Not when they're a student in college; not when they're on their deathbed at age 98. That's astonishing. And the other 55%... do have a year, sometime in their adult lives, when they don't have a household income of at least $100K. Does that mean they were suddenly poor? Not hardly.
>Good economists expanding on or critiquing small parts of a huge work doesn't represent any sort of repudiation of it.
Taleb proving conclusively that Piketty make significant math errors is not a small part. Multiple scholars showing Piketty has data errors, so much that he had to retract some claims, is not a small repudiation. The paper showing that one can reach the same results of Piketty without needing his take on why is pretty significant. There is plenty more, from technical papers dealing with r>g and showing it is absurd, to the pop ones I included above.
You want a particularly scathing counter to Piketty? Here [1] is a poll about his r>g claim (central to his work) from likely the most respected forum for polling economists, which includes about 100 top economists from all stripes and all areas. Take a moment to read it, see who is polled (and note they are all over the spectrum). Only one economist strongly agrees with the question, and only 16% agree at all - the other 84% disagree. Read the comments from the economists. Again, you're far from correct.
Want a good read? Here [2] is a econ paper from well repsected researchers Acemoglu (MIT) and Robinson (Harvard) from 2014, and here [3] are all papers citing it I could find in case you want to see what critiques exist. Among other flaws in Pikettys claims, they conclusively show that his second fundamental law leads to nonsense, which is contradicted by existing empirical evidence.
A quote "In particular, as we noted in the text, Pikettys second fundamental law has untenable implications, particularly in the cases where the growth rate of the economy becomes low (and it is these cases on which Piketty bases his conclusions about the implications of low growth on the capital share of national income)."
Of course, you are unaware of all this, and seem to think only Fox would claim there are problems with the work.
>For someone who hasn't read the book, you sure have a lot to say about it.
For someone that hasn't read any counter to the book, you sure are certain the book is correct.
I don't have to read Newton's Principia to know relativity supplants it. I only have to read enough literature to know what is going on in the field. It's ludicrous to claim I need to read the original book in order to benefit from later knowledge or critiques of it. It's nearly equally ludicrous to try to discount solid research by others because I personally did not read the book. Instead of trying ad hominem or implying I am making up this evidence, go read some of it.
>Another way to write that would be that 45% of those born into the top quintile never have a single year in their adult lives (age 18-110) when they don't have a household income of at least $100K
Care to source that? Not a single year huh? That is certainly not what the paper claims - it only measures two snapshots in time. Did you just make that up, like your other "claims"? Is this your feeling, or can you provide the data like I have that shows you're wrong? I'd like to see your dataset tracking enough people over an entire lifetime to prove that many never leave that bracket.
Here's [2] an actual data point towards showing your claim is wrong. It follows a sample of households over the 10 year span 1996-2005, and finds (among other things) that of the bottom quintile of households, the majority moved up over this period, and of the top 1%, the majority dropped out in this period. Fully 40% of those in the top 10% dropped out over this 10 year period, but unfortunately this does not show the quintile for which you claim 45% never see under 100K. And all this is over a 10 year span, not the 92 year span you claim is true.
For someone that espouses the scientific process, you certainly ignore what experts write, ignore solid counter evidence, and make up unsupportable (and demonstrably false) claims.
Since you seem willing to make up stuff, please provide links to evidence for your future claims. Debunking your claims will be much easier if you're forced to demonstrate your accuracy.
[1] http://www.igmchicago.org/igm-economic-experts-panel/poll-re...
[2] http://economics.mit.edu/files/10302
[3] http://scholar.google.com/scholar?cites=1771704582024827635&...
[4] https://www.stlouisfed.org/Publications/Inside-The-Vault/Spr...
What do you mean by "it"? The entire book? Some small part of it?
The only place I've seen a poll about what those in academia think about a central theme of the book is this one [1]. The question posed is central to the book, and only 2% agree with the statement, 47% disagree, and 16% strongly disagree (the rest are uncertain or no opinion).
2% agreeing with such a central tenet while 65% disagree or strongly disagree hardly seems like this can be the prevailing theory among academia. Read some of their responses - many have short points or links to literature.
This site, btw, has awesome questions about economic questions put to a poll of about 100 leading economists, and is an interesting source to see what issues they agree upon and which they don't.
[1] http://www.igmchicago.org/igm-economic-experts-panel/poll-re...
[1] http://www.frbsf.org/economic-research/publications/economic...
Wealthy people are often paid with assets (executive stock/option grants), work in asset-managing businesses (hedge funds/PE), and/or hold more assets than the poor (business owners).
In my view, the Federal Reserve is mainly responsible for exploding income, not that technology doesn't play some role as well - but, if it wasn't for exploding asset values, VCs would not be as desperate to invest in crazy money-losing ideas to automate XYZ (causing unemployment elsewhere) that they can sell to a bigger fish.
(Interested to know if the Fed is a disputed explanation.)
It seems strange to me that we have such a simple root cause but complicated ideas for how to stop it, other than curtailing the Federal Reserve.
https://en.wikipedia.org/wiki/Containerization#Toward_standa...
This leads me to wonder, when wages stagnated around 1970 in USA, did they start lifting in developing world?
The idea that the currency floats can also mean that the buying power consistently decreases. As the purchasing power decreases if you're in cash you lose wealth, even though on paper you're maybe even growing the number a bit.
If you own productive assets this is OK because you can increase the price of your outputs faster than your inputs. Meaning you can give people raises (but more slowly than the currency depreciation) and you'll still make money.
If you're an employee instead of an employer, though, you're paying the higher prices before you get the raise to be able to afford them.
In this way it's possible for the central bank to perform an effective (though non-obvious) redistribution of wealth.
What happened is this: https://en.wikipedia.org/wiki/Nixon_Shock
I believe that we will need to make some structure that allows for people to work who want to earn more, and still support a considerable number of people who just aren't employable in the future. There don't have to be just winners and losers like this article posits, it isn't us versus them, and technology shouldn't be vilified.
I believe what you're hinting at is the idea of "(unconditional) basic income". http://en.wikipedia.org/wiki/Basic_income
Interest in this is rising, there are some scientific studies, and several pilot projects have been run around the world, with generally positive outcomes.
The slope of increases in productivity remains constant on most of the graph, it just is that a certain point, wages stop going up. That is, the computer revolution did not change that slope, at least not until 1995-2005 (possibly from the internet).
Until the 70's, increases in worker productivity from technology were given to the worker as pay. After the 70's, it appears they were given to management and shareholders.
[1] http://2.bp.blogspot.com/-NEITJXBoBbY/VTY54JJX8gI/AAAAAAAADi...
After that, through the miracle of inflation, the numbers on their paychecks could continue to go up, up up! Just as long as those numbers are going up more slowly than inflation, you as a business owner are giving people a pay cut and they're not noticing it. Life is good!
Me personally, I think that's the cause of a lot of the inequality.
Inflation existed before the decoupling, and has been low in the US since the early 80s. Nominal wage rigidity is important but the gold standard does not guarantee price levels or wage levels.
That made borrowing less attractive since there wasn't an implicit guarantee that you'll pay back the loan with money worth less than what was loaned to you. In other words, get $X buying power now, pay back $0.8X buying power over time. It's a slam dunk.
After the 40s (and the war) there was a brief flirtation with deflation and then by the 60s inflation was in full force. Eventually people realized this was happening and a few years later Nixon nixed (HA!) the gold standard here in the US.
Once that happened it became incredibly obvious that inflation, borrowing and not really paying for it was the new standard move if you had half a brain. Businesses got it very quickly. Most of the population in the US has yet to realize it, otherwise it would have been changed by now.
EDIT: Given the regular changes to the way CPI is calculated I'm not sure I entirely agree with the reported numbers. I suspect that they're actually a few percent higher, so inflation has probably averaged not 4% for the last 30 years, but more like 6-7%
1.04 ^ 30 = 3.24
1.07 ^ 30 = 7.61
If that were the case it would explain a lot of the inequality. If inflation is 6-7% and returns have been averaging 8% (this is what most pensions assume they can get and shoot for) then your real rate of return is a pittance, almost not worth mentioning. Might that also cause some hard to detect but definitely real inequality as well?
In the 18th and 19th centuries western European society was highly unequal. Private wealth dwarfed national income and was concentrated in the hands of the rich families who sat atop a relatively rigid class structure. This system persisted even as industrialisation slowly contributed to rising wages for workers. Only the chaos of the first and second world wars and the Depression disrupted this pattern. High taxes, inflation, bankruptcies, and the growth of sprawling welfare states caused wealth to shrink dramatically, and ushered in a period in which both income and wealth were distributed in relatively egalitarian fashion. But the shocks of the early 20th century have faded and wealth is now reasserting itself.
As a general rule wealth grows faster than economic output, or in other terms: r > g (where r is the rate of return to wealth and g is the economic growth rate). Other things being equal, faster economic growth will diminish the importance of wealth in a society, whereas slower growth will increase it (and demographic change that slows global growth will make capital more dominant). But there are no natural forces pushing against the steady concentration of wealth. Only a burst of rapid growth (from technological progress or rising population) or government intervention can be counted on to keep economies from returning to the “patrimonial capitalism” that worried Karl Marx. Governments should step in now, by adopting a global tax on wealth, to prevent soaring inequality contributing to economic or political instability down the road.
In simple terms, rich peoples' invested wealth grows faster then poor peoples' wealth due to compounding interest. This is the true reason for the wealth gap AND this is the prevailing economic theory of wealth inequality among academia.
https://en.wikipedia.org/wiki/Lewis_F._Powell,_Jr.#Powell_Me...
I was hanging out at the bar the other day with this software developer from India. He had brought a puppy with him to the bar. While I was playing with the puppy and we were chatting, a girl comes up to us and wants to play with the puppy too.
His intentions became nakedly known when he kept saying over and over that "me and the puppy are a package deal." As I was leaving to head to the restroom, he starts going on about how he's "recruiting" for a boat trip in the Caribbean. When I got back she was gone, obviously unimpressed.
It got me thinking about the dating market. No woman I know has wealth anywhere on their priority list for men they want to date. That guy could have been telling the complete truth about yachting in the Caribbean and she'd have had the same reaction. Who wants to spend time with a boor even on a luxury yacht?
If he'd been legit Mr. Darcy, sure, I'm sure she'd have been eating out of his hand.
--------------------------------
If I wanted to, I could fairly easily jack up my yearly salary by anywhere from $25-50K by finding another job. The reason I haven't done that yet is simply that the switching costs vastly dwarf the (slight) standard of living increase that the bump would afford me. When I look to move the needle, salary just doesn't look attractive. Just having one is the big win.
I hold that money is cheap right now precisely because capital is worth much less, relative to other kinds of wealth. Who is killing it right now? Apple. Samsung. Global commercial institutions. Finance has accomplished its goal of making everything fungible, now the only things left that are worth anything relative to anything else are precisely the things that finance can't replicate, like an amazing company started by an amazing genius.
So, no, capital accumulation is not worrying to me, because it's obvious to me that we live in a much richer world now than we ever have. Doesn't look that way on paper, but that's because we don't have a way of representing, in the numbers, the idea that money itself isn't worth what it used to be. Capital accumulation is exactly what would happen if everyone started subconsciously realizing that cash is no longer king. They'd place their investments elsewhere, leaving some poor sap holding the big bag of worthless paper.
But as a social problem for people less fortunate then you the problem is compelling.
Note that the problem is actually growing. If the gap keeps growing faster then your wage grows, it will be a problem for you too.
As for your anecdotal experience about women I have to say you're wrong. No women will ever call herself a gold digger that's why they don't tell you wealth is on their priority list. The truth is, it matters a lot. See below. The content of the link kind of doesn't fit with HN, but the the evidence fits as an anecdotal counterargument to your anecdotal experience with the puppy:
The real thing we should be tracking is social mobility. But we can't track that because it involves more than numbers. So we track inequality instead. And don't try to say one correlates with the other.
We need to understand inequality, not just measure it. One country's inequality is not the same as another country's. Which is another reason why I dislike the metric, it's all smoke, no fire.
> No women will ever call herself a gold digger that's why they don't tell you wealth is on their priority list.
I don't ask women what their priorities are. I infer from the choices they make concerning dating.
I ask my friends straight up. I would say half of them lie, and the other half are honest. A lot of it depends how close I am to them.
This doesn't put anyone out of a job currently and has absolutely zero in common with the ECGs, CTs, and and ultrasounds mentioned before. As far as I know, robotic cases require the same amount of personnel to perform. Typically the people you need for robotic cases have more specialized knowledge and additional training (sold by da Vinci I imagine), not to mention the technical people da Vinci needs to hire for maintenance which wasn't going to be supplied by the hospital anyway.
Cab and Uber drivers should be scared of driverless vehicles because there's a proof of concept that exists, but unless something has happened in the past 2-3 years, I really don't think a proof of concept exists for automated surgeries or automated support personnel for surgeries.
I don't know. What are the median wages of the cab drivers that these UberX drivers are apparently putting out of work? The article doesn't say.
Those jobs will be gone soon anyways. Uber wants nothing more than to replace human drivers with AI.
There was a really famous book that was published recently called "Capital in the 21st century" by Thomas Piketty that summarizes the real reason:
http://www.economist.com/blogs/economist-explains/2014/05/ec...
The book is dense, but the logic and evidence is compelling. Basically it says that you need to look at more data, because there was ALWAYS a trend towards inequality that was temporarily reversed from 1930-1975, read below:
""Capital" is built on more than a decade of research by Mr Piketty and a handful of other economists, detailing historical changes in the concentration of income and wealth. This pile of data allows Mr Piketty to sketch out the evolution of inequality since the beginning of the industrial revolution. In the 18th and 19th centuries western European society was highly unequal. Private wealth dwarfed national income and was concentrated in the hands of the rich families who sat atop a relatively rigid class structure. This system persisted even as industrialisation slowly contributed to rising wages for workers. Only the chaos of the first and second world wars and the Depression disrupted this pattern. High taxes, inflation, bankruptcies, and the growth of sprawling welfare states caused wealth to shrink dramatically, and ushered in a period in which both income and wealth were distributed in relatively egalitarian fashion. But the shocks of the early 20th century have faded and wealth is now reasserting itself. On many measures, Mr Piketty reckons, the importance of wealth in modern economies is approaching levels last seen before the first world war."
The real reason for economic inequality is not technology, it is actually a feature of capitalism. In simple terms what is happening is that invested wealth grows faster for rich people then it does for poor people and this causes the gap to grow. See the quote below:
"From this history, Mr Piketty derives a grand theory of capital and inequality. As a general rule wealth grows faster than economic output, he explains, a concept he captures in the expression r > g (where r is the rate of return to wealth and g is the economic growth rate). Other things being equal, faster economic growth will diminish the importance of wealth in a society, whereas slower growth will increase it (and demographic change that slows global growth will make capital more dominant). But there are no natural forces pushing against the steady concentration of wealth. Only a burst of rapid growth (from technological progress or rising population) or government intervention can be counted on to keep economies from returning to the “patrimonial capitalism” that worried Karl Marx. Mr Piketty closes the book by recommending that governments step in now, by adopting a global tax on wealth, to prevent soaring inequality contributing to economic or political instability down the road."
I'm no economist but according to my knowledge this is the prevailing theory in academia today.
"the super-rich" is different groups of people from year to year.