Inequality and other such issues are universal, the French Revolution was not. What was unique about the French Revolution is not even that the government bankrupted themselves fighting wars and then tried to refill their coffers by sharply increasing taxes in a fashion that disproportionately affected the lower classes, but that this was all paired alongside widespread crop failures that sent the cost of food skyrocketing driven widespread food scarcity.
The average person couldn't care less, at least in terms of action, how much money somebody else has. If people have food in their belly and a roof over their heads, you're only going to draw out radicals. And in modern sharply divided societies those radicals will be framed (probably accurately) as being disproportionately made up of one side, and the other side will oppose them all their might and widespread public support behind such opposition.
So there will never be a popular revolution in a place like the US in its current divided state. The most probable scenario by an overwhelmingly wide margin is 'nothing', but the only other possibility would be a civil war. And I do think that's possible, but the chances are extremely remote. It would require something very extreme like one side trying to ban the other side from political office. We've probably been closer than some might expect, but we're now probably much further, rather than closer, to those times and outcomes.
That’s incorrect, in fact, fairness and equality is one of the few universal social contracts that are valued in every culture on earth (though lived/implemented differently).
And I would argue that’s one of the key differences that separates humans from animals. Humans have an intrinsic desire for things to be fair.
The French Revolution is no longer possible. The surveillance state plus wealth mobility means the wealthy will be in New Zealand before anyone erects a guillotine, and the people that would foment a revolution are heavily surveilled and infiltrated.
Are you sure about that? Tech cuts both ways & asymmetric drone warfare has become cheaper than ever … how hard it is it to sink some yachts or down some jets?
I could only relate to this stuff in my 20s but now I just don't care. Maybe it's cause I went from < 200k net worth to over 1M in that time. I've seen the country I was born in collapse in my lifetime. I saw my grandparents give their entire life to that country only to be left destitute. I saw my parents come to America with literally $0 and after thirty years I watched them become millionares by simply getting up and working hard.
This idea that people will rise up and replace what we've got now with better is part of the problem. You literally do not know how lucky you are to live in this time because you are living in the middle of a golden age and don't even realize it. Because when you're in the middle of a golden age it feels normal.
And for some reason there's an entire population of folks like you that wanna FAFO while they are living in literally the best time ever to be a human being. I'd sigh but I'm not surprised.
> I watched them become millionares by simply getting up and working hard.
If it was that easy, every office cleaner or bank clerk would be a millionaire.
> living in literally the best time ever to be a human being
Sure, but we're also watching the rise of a new oligarchy, and their latest innovation appears poised to put a lot of people out of work, making their lives materially worse.
It literally is. People just have no discipline or skills with money. Go on the fire subreddit. 25k saved per year is a million after twenty years with a modest very conservative amount. And if you can double that with a spouse you're looking at a million in only ten years. People who stretch that to 20-25 years end up with 3-5 million.
I dunno why people keep bringing this up as some sort of gotcha. You don't save for retirement based on your average. You do it during your peak earning years. Which are far above average. And most households have more than one earner. So even a 5% savings based on a median 84k household yields over 750k in 20 years.
The number I am finding for the median household expenses for America is $67,000 annually. That's just essentials, housing, food, transportation, insurance, healthcare
So if your median household makes 84k, and your median household spends 67k on necessities, where is the money coming from for saving 5%? The difference is only 17k
It doesn't take much to eat up 17k. A car repair, house repair, or hospital stay (in America at least) will easily reduce that to zero or negatives
So I dunno man. It doesn't seem that simple.
Edit: and keep in mind that median does mean that a pretty large proportion of people make less than that number too. Sometimes significantly less
Presumably the 67k spend contains the car repair, house repair, hospital stay part you mentioned. Everything you're saying is accounted for. Your argument is basically anti social security. I'm saying make your own social security fund and you keep going "and what about" as if that's an argument. These externalities are literally what the fund is for. And frankly you should have an HSA for medical expenses because it lets you spend pre-tax money on that stuff.
When you do non Roth it's pre-tax cash so it's much easier to run up your net worth because it's based on money that you haven't paid taxes on yet.
$5583 a month is essentials? This is more than what I spend on my mortgage..... and all my bills.... and all my food.... and I live in SoCal.
This conversation is dumb. Put money into an IRA. You lower your taxable income. It's not that hard. You grow your net worth on your untaxed monies and then later when shit hits the fan you can extract it at a lower tax bracket. And you get to gain market gains on cash that would otherwise be spent on taxes. It's how people who are good with money make an extra 10-15k per year while you're being all like "woe is me. i can't afford anything".
This is how you can cover that $10-15k you mention when it does happen. You're welcome.
I really don't know what gave you the impression I needed your financial advice in the first place
Do you think just because I'm concerned about people who are less well off that I must be one? Do you think the only reason I could or should care about poor people is if I were poor myself?
If so, then I truly hope you become a better person in the future
My financial situation is fine though, thanks for the concern. My financial advisor has me all taken care of
So you're still looking at 43% of every pay packet. And 50% of full-time workers will be paid less than that.
This is beyond discipline and much more than simply getting up and working hard, and more like living in self-imposed poverty, putting on hold anything resembling building a life, buying a house etc.
The fact is putting away $25k a year is the reserve of the privileged, not something achievable just by getting up and working hard for most people.
The average household income in the US is $83,730 and the median is $121,000.
It's also irrelevant. The average is weighed down by students and retirees. If you look at only people in their peak earning years (40-50) then the median jumps further.
But thank you for the comment. It perfectly exemplifies the attitude of most Americans. Born on third base and feeling entitled to blow their entire paycheck every month and then still asking for hand outs.
And beyond that... yes? These figures are for all households, not necessarily households with people in full time work, which is a pre-requisite to looking at your claims properly. As such your household income figures don't give us a good picture to evaluate them.
The figures I quoted were for people in full time work, much more relevant to your statement, and no, they aren't weighed down by anything.
> If you look at only people in their peak earning years (40-50) then the median jumps further.
Why would I do that? Your claim was that people could become millionaires over the course of 20 years by saving $25k per annum. The median person in full time work would have a very hard time doing that as shown by the figures I gave you. And they are better off than fully half of other full time workers. Unless you have some compelling (sourced) figures about lifetime earnings that negate this, it doesn't really help us.
> It perfectly exemplifies the attitude of most Americans. Born on third base and feeling entitled to blow their entire paycheck every month and then still asking for hand outs.
Wow, OK.
Well firstly I'm not American, I'm British, soon to be Australian and might eventually become Irish (by descent) as well. No US in the picture though. Never had a state handout in my life, and my net worth is already well over your target threshold.
What I have (that you seem to be missing) is empathy for people who don't have it so good and a basic understanding of figures.
Yea I had a feeling. I'd caution you not to buy into the Internet doom and gloom. Most people retire on far less than 500k even and are doing just fine. Because the people that tend to live on less also live in the parts of the country where you can still buy a house for 100k.
- I introduced to the thread first
- You quoted incorrectly
- Doesn’t contradict the other sources given
- Doesn’t support your arguments
You think I’m ignoring that primary source? That would be quite a feat given I linked it first.
Please do explain further, preferably with reference to the comments above that show the figures you quoted aren’t a good match to illuminating the claims you made.
How does that source support the notion that median-and-lower earning people can realistically save $25k per annum, per person, or trivially become millionaires with a bit of discipline?
LOL, what are you going to do? Sit at the end of Northrop field and fly a swarm of drones into the engines of a G6 traveling down the runway at over 100MPH? No way a handful of drones are going to get sucked into a jet engine at that speed. Or do you mean engage a PJ in a dogfight at 40000 feet? I suspect if drones could down a jet, we would have heard about it coming out of Ukraine by now.
The reason we don't do these things is because the jets would come crashing down onto someone's home or place of work. That UPS jet that crashed last year when the engine detached on takeoff killed a dozen on the ground. Nobody is going to drone attack a private jet because the innocent would get killed by the dozen.
The original comment was made in relation to guillotines, popping unoccupied jets on the ground isn't what the commenter I was replying to was referring to. Taking down an occupied jet without using a sidewinder missile is a different capability.
PL> "I'm going to build a guillotine; be my lawyer and give me advice as if it's going to be built."
>>"... don't make it entirely functional."
PL> "It's going to be built functional."
>>"... hmm ... use a bicycle cable lock to add a safety to it – lock&key. But remember that my original advice was not to build it in the first place."
New Zealand is zero defense vs a large populist uprising, especially one taking place in New Zealand.
That’s the thing social structures like money and nations only mean something when the masses decide they mean something. Billionaires only get a vote by convincing other people what to believe.
> ... federal intelligence agencies and domestic law enforcement are circulating reports with a new domestic target in mind: anti-technology extremists.
> This new effort follows President Donald Trump's National Security Presidential Memo 7, which instructs the Department of Justice to target anyone holding “anti-American,” “anti-Christian,” and "anti-capitalism” beliefs.
To be fair though in the times of French Revolution the surveillance capability was really basic compared to today, the tech capability to organize protests was lower too. Which one prevails? We know that in PRC and maybe Russia it's surveillance, but what about US?
It's laundered through data brokers and 3rd parties, but with ICE subpoenaing reddit et Al for people that shit post about ICE online, do you really think we're that far off? Especially if the person shit posting is in the US on a visa?
I know what you mean, just saying relative to French revolution, they not only had no such surveillance tech but also no such tech for organizing protests and stuff. Which one tops which in US?
Your theory is that the billionaires will escape popular uprising by forcing their way into a sovereign nation, and that that nation won't rise up against them? Why wouldn't we?
Oh, the good old reflex that is activated in panic situations but never realised. Then the revolution was from capitalists against kings. Now the former are already in power with their servants (CEOs) and there is no alternative. So no change, no revolution.
It was a coalition of monarchies, so terrified of the prospect of even a single popular republic rejecting the divine right to rule, that began the bloodshed and invaded France.
Blaming the Revolution for the Coalition wars is just bad history.
In case you didn't notice, the Revolution won. All contemporary republics fundamentally inherit from the French Revolution - you're surprised that the systems of govt honour and romanticize it's progenitors?
Aside, if bloodshed prevention is your only barometer for history, supporting the Coalition view of events is even sillier, because the Bourbon Restoration directly led to the Revolutions of 1830 and 1848, which was yet more bloodshed. Almost as if unjust systems are fundamentally untenable...
> In case you didn't notice, the Revolution won. All contemporary republics fundamentally inherit from the French Revolution
“Fundamentally inherent from”
is such a broad statement that it’s difficult to argue with, but the US constitution predates the French Revolution.
> so terrified of the prospect of even a single popular republic rejecting the divine right to rule
If the monarchies of Europe were so terrified of a single country rejecting the divine right to rule, why did many of them assist the United States, hinder Britain, or remain neutral in the revolutionary war?
That is a bit of revisionist history: conspiracy theories gripped the revolution, and a lot of them thought Marie-Antoinette was already organising an Austrian invasion of France (since she is Austrian), so rather than wait for the supposed inevitable to happen, France attacked first. And that's what made the coalitions form. Not that they liked the idea of a Republican France, but before France attacked, they were unlikely to do anything about it.
What's wrong with it? It shows the article, with a little banner on top, showing when it was captured. Doesn't mess with scrolling, what's not to like?
didnt the archive owner only start doing this after Patokallio revealed his identity for no good reason. Given the legal liability involved in maintaining that service, there is a threat to what Patokallio is doing so it doesn't seem entirely unsympathetic to do something in retaliation..
Seems like a mistake to rely on an archiving site that runs malware and changes the text of archived pages.
However, there’s also not really anything better out there. The owner being some wily/sketchy Russian is even an advantage in some respects, since they can’t be pressured by copyright law or foreign politics.
Is there any graceful way to let the pressure out of the system and begin rebuilding trust and stability or is the only way out to immanentize the eschaton?
Legislation and court rulings have shown that shareholders get everything they want, ever. They want Southwest to stop checking 2 free bags? It happens. Etc. Ad Nauseum.
Somehow, we need legislation that says companies are beholden first to their employees, then to their customers, THEN to shareholders. I don't know how to do that. Co-ops are the only real answer maybe?
The US actually has a legal structure for employees to have beneficial (+ tax advantaged) ownership of their companies, the ESOP (employee stock ownership plan). It's a legal structure where a trust buys the company from the original owners on behalf of the employees and then allocates a percentage of those shares to the employees each year.
Since it's basically a leveraged buyout of the company by the employees, it provides a much more ethical succession option (IMHO) for privately held companies with founders who want to step down but do not want to sell to private equity. I wish more people were aware of it as an option.
“Southwest has been under increasing pressure to raise revenue and improve returns after activist hedge fund Elliott Investment Management took a stake in the airline last year and pushed for changes to the carrier’s business model.”
Elliot showed up because southwests entire computer system imploded over the holidays which cost them massive amounts of money and reputation. Changes were absolutely needed at southwest.
The current proposal on the table is to have the rich pay a lot more taxes. They scoff at the idea, so probably we will end up doing something less graceful.
Author appears to take resilience and preparedness to the logical extreme and mistake it for some kind of doomsday worship. Indeed, the rise of armchair-eschatologists is at an all-time high. This article is a much better example of such thinking than the likes of Anduril and Anthropic.
"The Economist" is falling into the rut that the remainder of British publishing has been bogged down in for a decade: increasingly liberal headlines generated via social-media topic measures to gain increased eyeballs (enough to survive).
Increasingly, British news sources are drifting leftward, primarily b/c right-wing sources are increasingly rare and, let's be honest, dull. Maybe with a little bit of say, "DEI", in the topic we can raise some eyeballs, is a typical move.
But that's a dead end. The real news is that good article headlines are hard to find and good composition is hard to write. No easy way to do that other than to find better writers.
I would say with inflation, wealth inequality and skyrocketing housing, gas and grocery prices as well as super high amounts of consumer debt and families stretching to keep up it feels a lot like pre-bust 2005/2006 economy out there right now. We might not be on the cusp of a subprime mortgage bank crisis but it does feel ominous lately.
The new mortgage backed securities are the instruments trading the debt used to build AI data centers (the AAA rated debt that is anything but). The music will stop when there’s a blip in liquidity. Everyone will rush for a chair and there won’t be enough for everyone.
I don’t know when that will be but if the big ipos coming down the pike cause an everything squeeze that might do it.
Personally I think those are also symptoms. In my opinion, the cause is:
1. Easy money for far, far, far too long in the US and a complete political unwillingness to take any risk of a recession, no matter the long-term cost required to stave it off. In my mind, this explains the rich-poor gap, the rise of crypto, insane valuations, house-price inflation, the weird delta between US and rest-of-world standard of living/salaries, and probably even the migration crisis.
Easy money and cheap (foreign) labor are one and the same. Political parties that are not accountable for this are the upstream problem. In other words, it’s a failure of what we think of as our “democracy.” The will of the people doesn’t mean much when you can just swap out “the people” to get what you will.
That’s not for lack of engineering talent! We just don’t like paying for boring things like… bridges that haven’t collapsed yet. “Call us when it does crumble. We’ve got a border wall to build or gender reassignment surgeries for prisoners to pay for.”
What a cheap shot. “gender reassignment surgeries for prisoners” - cos there are soooo many of those happening we can’t fix a single bridge.
How about another explanation. Your government is totally opposed to helping citizens for “free” (let’s ignore that most government revenue comes from good ol’ taxpayers) when the alternative is to farm out the provision of expensive services to lobbying corporates.
They’re more than happy to punish people however. For free _and_ for corporate profit.
Agree, coming from a 3rd country to US what I have personally perceived a lot is the generational loop at the later stage..."Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times." — G. Michael Hopf
Like anything some is good too much is bad, a gradient work for a complex society, a brutal difference like kings and dark ages poor eventually bring collapse
Wealth inequality was not the defining aspect of the relationship between kings and peasants. It was also not the reason for the collapse.
The defining quality was the mechanisms by which kings extracted wealth from peasants (indirectly, through layers) which doesn’t resemble what we have in western liberal democracies today. Things like tallage and arbitrary taxation, labor dues, mill/oven/wine press monopolies, heriot, merchet.
Serfs were legally bound to the land.
The Black Death killed 1/3 of Europe’s people, giving peasants leverage because without enough workers, lords could not enforce arbitrary dues because peasant could walk out or revolt, such as the English Peasants’ Revolt of 1381.
That’s when the Dark Ages extraction model started to break down. Not because of wealth inequality, though it can see why they get conflated.
If we take the top billionaires in western liberal democracies today, they do not extract wealth from the average worker (there’s no duress, for instance), and it is clear that they have created more wealth than they have “taken”.
>"If we take the top billionaires in western liberal democracies today, they do not extract wealth from the average worker (there’s no duress, for instance)"
>Can you explain what is wrong with people having different levels of wealth?
There's nothing wrong with it, in moderation. Where it becomes a problem is when the distribution of wealth starts diverging widely from people's expectation of what a fair distribution would be, accounting for different levels of ability and luck. Aside from this cognitive dissonance, there are also pragmatic limits on how big a disparity can be while still having a functional democracy. It's clear that truly enormous disparities in wealth, made even worse by a lack of regulation in political donation, lead to major distortions in the principle of "one person, one vote" which is a cornerstone of democracy.
>Or asked differently, if it is bad, should every individual have the exact same wealth?
No, because people have different levels of ability and experience different amounts of luck. Inequality is inevitable, and the vast majority of people understand and accept that. But they also expect that the system should at least roughly resemble a meritocracy, and that is impossible to maintain in an unregulated capital system because of the feedback loop between capital and income. Most professional sports leagues recognize this problem: once a franchise starts winning, they make more money, which allows them to buy better players, which leads to more wins, etc, until you have a league where a handful of teams can win the championship and the others are perennial also-rans. So they cap the amount of money that can be used for salaries. They are free, of course, to make as much money as they can, they just can't plow it all back into player salaries. Capital is regulated to preserve the fairness of the system. That doesn't mean the teams are all equal, there are still franchises that perform better over time than others. But it's more clearly tied to intrinsic merit like coaching systems and player development, not just going out and buying proven superstars.
Similarly, a person of average skill can get lucky and make a large amount of money. Having that capital in turn makes it easier to make more money. Over time, and across many such situations, capital starts outrunning merit as a predictor of someone's future income, which is socially demoralizing. That's where the US is today: a pervasive feeling that the system is rigged. To a great extent, this widespread perception contributes to the current political climate in the US.
It creates a country nobody is willing to fight for. Beyond certain levels of inequality, you get systemic dysfunction.
Beyond a certain point, having a country where teeth are “luxury bones” and you have people putting off healthcare items due to cost isn’t sustainable. We’re past that point, and need to cut the rich down multiple pegs.
> Beyond a certain point, having a country where teeth are “luxury bones” and you have people putting off healthcare items due to cost isn’t sustainable. We’re past that point, and need to cut the rich down multiple pegs.
Concur that poverty should be eradicated and that overt time the minimum bar for what qualifies what each human deserves/needs rises. However, that's orthogonal to wealth inequality.
It is not impossible to have huge wealth spectrum and no poverty. Conversely, it is not uncommon throughout the ages for societies to have little wealth inequality but extreme poverty.
JFYI, consumer debt to GDP ratio is at the lowest level in a generation. There's really nothing at all concerning about household debt load and of all principal types of loans there is only one that is problematic: student loans. But it's just one out of many. Every other kind of debt is at historically low levels.
If you're genuinely curious, a few suggestions that I personally found incredibly enlightening:
Anand Giridhardas, Winners Take All: The book is fantastic, there's also his now infamous google talk where he talks about dismantling google: https://m.youtube.com/watch?v=d_zt3kGW1NM
Thomas Piketty, Capital in the 21st century: Probably the most comprehensive (but at times also longwinded) outline on how wealth inequality comes to be, why it's not good for society and how it could be adressed
Piketty argues that if r > g, wealth will accumulate into fewer and fewer hands over time. R is the rate of return of capital (rents, stocks, bonds, etc) and g is the growth of the economy over time.
If the economy grows at a higher rate than the rate of return, the pie gets bigger at a higher rate than wealth can concentrates. If the rate of return accumulates capital at a higher rate than the growth of the economy, wealth will inevitably concentrate over time.
He uses a lot of examples and economic history to argue that r > g, except for a few small periods. I think given the amount of wealth concentration we are seeing, and the political effects thereof, it is a compelling argument. Taxation (of wealth) is the proposed solution.
Well, we've seen the Labor Theory of Value here, and the idea that people get wealthy by stealing from others, and it is bad that some people have more money than others, and so on.
...You are using "wealth" in a way completely foreign to how I have ever seen it used linguistically. The abundance of resources available to an individual that we call "wealth" colloquially being transferable or tradable is basically the hallmark of a market economy. It can absolutely concentrate within one, because if it can be traded, it can absolutely be not traded decreasing the velocity of that value transfer to zero. So... Yes. If only one or a handful of people are buying, because everyone else is having to sell to stay alive, then wealth does, in fact, concentrate.
The term you're looking for is "surplus". The consumer sees a surplus of value because the price they paid is below the maximum they're willing to pay, and the producer sees a surplus because the price they charged was more than the cost to produce the good. In this economic system both parties benefit. Economic surplus is the thing that is "created" with every transaction. "Surplus accumulation" as a concept doesn't make any sense, and is isomorphic to what you think people are saying when they use the phrase "wealth accumulation." You should update your definition of "wealth".
Why are you asking? My hope is that you are asking this genuinely from a place of curiosity to better advance this discussion, as there is apparent confusion from people working from different definitions of the same word.
> because the people trading with you thought the exchange was of equal value, or they wouldn't have engaged in it
If this was true I would have emphatically agreed with you on all counts. But it simply isn't true.
Many find themselves in a position where they have their arms twisted to accept a deal they don't like. Yet they accept for some existential reason or another.
If the top 10% of people suddenly had their wealth double overnight, it would have absolutely disastrous effects for the lower 90% of people. Prices for scarce goods (e.g. housing) would increase dramatically. The price increase dampens the overall demand for housing since a large fraction of the 90% are now priced out. The wealthy homeowners have an incentive to maintain that scarcity, and freely use their resources to preserve the status quo by preventing desperately-needed housing from being built.
Those with wealth will tend to steer the economic system more towards their own interests in a runaway feedback loop, often in ways which create no overall net welfare for society.
Direct advertising is not the only factor you need to consider. Many powers had been doing political radicalization for years through many channels, including foreign sponsored ones.
You’re missing the forest for the trees. Yeah the item cost doesn’t double, but it goes up significantly because now your addressable market has 2x money.
If we define wealth as it's often used colloquially -- the amount of liquid cash one has -- then your potential share of the pie of goods and services shrinks. This is true unless the pie itself grows proportionately.
Without agreeing or disagreeing with parent comment, the rate of growth of the pie certainly does not feel like it is growing as fast as accumulation of nominal wealth of some.
Historically one usually amassed monetary wealth in exchange of providing goods and services. Stock markets, high frequency arbitrage markets have broken this. Yes there is liquidity insertion, but is that liquidity worth so much ? At microsecond scale ? I don't think so.
Stock market let's one encash a perception of promised future delivery of goods and services without the need to actually deliver it. Yes the market will eventually, hopefully, price it correctly, but by then some other retail sucker is holding that bag.
When people complain about others getting disproportionately wealthy they are talking about the shrinking share of the pie.
Not true at all. Most labourers have nowhere close the pricing power necessary for this to be true. Information is obfuscated (legally of course) on purpose.
Let's take a Principal Engineer. A bad choice to make my case with, because among others, they do pay rather well. For a Principal Engineer, it is sort of a job requirement at that level to save or generate of the order of ~100 million dollars per year. An outsourced engineer sees nowhere near 1/10th that amount in his/her salary.
That's money and not wealth and its a flow not stock and denominated in something that can depreciate, has it even been priced correctly ?
I grant you that it is very hard to measure ownership of (wealth generating) assets, hidden behind legal obfuscations.
Lorenz curve [0], GEI [1], Gini index of owned wealth generating assets would be the right thing to measure to see how understand one's share of the pie. But an enormous amount of records of such wealth is just hidden away, using laws that those very owners helped pass.
BTW I am willing to be convinced to adopt a different position if I see a well researched, credible Lorenz curve data that has tracked the shadow wealth to some degree of accurate approximation.
Using words like that imprisons one into a certain perspective. Wealth creation is not "getting a share of the pie". Wealth is not an apple pie you slice up for your guests.
If Picketty uses words like pie, share, transfer, concentration, etc., then his book is about as valueless as Das Kapital.
For what it's worth they are my words not Picekty's.
It does not matter what it's called. The buck stops at the basket of goods and services I can buy. As long as this basket of goods and services is evaluated in inflation adjusted terms, it is pertinent to the discussion we are having.
My point is that the pie is growing and all are benefitting. Yes, rich may be getting more but not at the expense of poorer people as their wealth is increasing too. It's rather unfortunate but it seems that the pies grows fastest (and poor benefit from that growth too) when wealth is allowed to accumulate and yes that means more inequality but if all get better off, that's the price we have to pay for faster growth of total pie
> My point is that the pie is growing and all are benefitting.
This is the main point of contention though.
Earlier generation middle class seems to have been larger and more financially secure. That would be our parent's generation. Of course not all of our parents would qualify.
"seems" as based on vibes? Beware of nostalgia bias!
It is true that middle class has been shrinking. What is often overlooked though ks that the majority of that middle class moved on to the upper class, so not bad at all and aligns with "growing pie"
Yes, people are getting wealthier in real terms, including the poor. Especially if you quantify it the right way: absolute consumption/expenditures, not relative % from median income (relative count will always show there are poor people even if they would appear insanely "rich" to a poor person from 100 years ago or from Afghanistan).
On lived experience: my lived experience tells me the Earth is flat.
Is that inflation adjusted? Also, even if it is, some consider the CPI to be a faulty measuring stick. I, for one, disagree with the weighing of certain categories factored into the CPI.
If your logic is right, people back in the Stone Age were all like Jeff Bezos with mega yachts and stuff... It all went downhill from then - the population has increased so much and everyone has gotten so much poorer :(
if wealth is money in this context, and printing is creation in this context, what is the difference between printing money and creating wealth? the new money went somewhere. if i remember correctly it went indiscriminately to business owners, with no stipulations on how it was spent, and then blanket forgiven with no questions asked. to my mind that is wealth creation and the root cause of the inflation we've seen since (the printing not just the PPP)
Did they steal everything outright? Someone is worse off in that transaction. (Or everyone a little bit worse off if it’s government grift).
Did they create all that value themselves? Might be fine - positive sum games do exist.
Did they create some system where a bunch of money flows just to them based on the labour of others? Maybe it depends on the details, like how much the labour is paid.
I think Piketty’s point was around capital and wealth tending to accumulate unless something forces it to disperse. This can get worse over time. The last couple hundred years were relatively “good” due to the way revolutions and WWI and WWII basically eliminated many of the wealthy families in the west, a couple times, and the post-war societies were “reset” with good equality that has slowly eroded since (due to insufficient “friction” to prevent accumulating extreme wealth over time, such as high loophole-free wealth and inheritance taxes). Or so the theory goes.
Building on that, when you get extreme wealth you get individuals with power to affect policy for their personal good. Some will choose to be selfish (it’s human nature). Policy shifts in their favour. We end up going in the opposite direction to that since the Great Depression - which really was a collectivist culture of everyone getting a share of the wealth of the nation, rather than being screwed over by rich and powerful folks. (McCarthyism somewhat put the brakes on that in the US in particular, though, which is why you can get e.g. free health care elsewhere in the west).
I have not read Piketty. But I could imagine a society where the poor are 10% better off and the rich are 1000% better off to be a less stable society that ends up falling apart.
Citation Needed (that they actually made everyone equal and it wasn't just a talking point). You may want to read a history book that talks about how Stalin denounced uravnilovka and about the existence of the nomenklatura.
There were a multitude of reasons that USSR collapsed, and reasonable people can argue which were more or less important. I don't think it's reasonable to argue it was due to equality (which wasn't even a thing). Inequality certainly was a thing and one of the reasons, in addition to the Afghan War, Perestroika, Glasnost, the coup attempt, the independence movements of member states. I personally think inequality and structured economic collapse was the biggest culprit.
It’s a rather public example but DOGE did immense damage and was facilitated by the ability to leverage wealth into power. There is a dangerous feedback cycle.
Walter, I believe the idea against wealth inequality is not purely that there are wealthier people but that their wealth should be redistributed such that the wealthier people are less wealthy (but still wealthier) and the poorer people are less poor (but still poorer).
There have been many attempts at taking from the rich and giving to the poor, and the result was always everybody was worse off except the people who ran the government.
No, that is not always the result, very far from it. You seem to believe that society is just the natural state of things, and "government" is almost just in the way. It's an incredible blindness to the privilege you enjoy.
> The proper role of government is to protect people from thieves and murderers and externalities and provide national defense.
This is a 19th century regalian viewpoint (which is fine). Taken to its logical conclusion, education and healthcare services should not be provided by the government. I think that this is a wildly unpopular viewpoint, and is really unlikely to lead to good outcomes in our kind of society.
Although some people due want to literally take from the rich and give to the poor, the actual problem with wealth inequality is that game is rigged.
Capitalism not natural order; it has rules and winners and losers. It's actually more like sports. With sport, the goal is to create entertainment by rewarding physical excellence, mental excellence, and successful risk taking. Similarly, the goal of capitalism to create a better society by rewarding physical excellence, mental excellence, and successful risk taking.
What happens to a sport when players cheat or exploit the rules to win? It's no longer entertaining! When the best players can no longer win that's boring. And, in sport, when that happens the rules are changed or enforced better to bring it back in line.
Capitalism is the same. We are reaching the point where we are no longer properly rewarding excellence that is benefiting society. So the rules need to be enforced and rules need to be changed to bring that back in line. Inequality of this magnitude shows that rewards have outstripped the benefits to society and needs to be corrected.
Can we? Do we even know the counterfactual? Perhaps Norway would have been 2x richer (incl. their poorest people) if they implemented ultra aggressive libertarian policies.
The best we can do is learn from natural expriments like Finland and Estonia being about as rich before ww2, then by 90s the gap got massive since one was forced adopt more redistributive policies. Same with North / South Korea. Here we have at least some hope of extracting causality
Exactly, and thankfully those have been made based on natural experiments like the ones I shared. And the consensus among serious modern economists (not those making money on selling popular books) is that redistribution negatively affects economic growth with all else being equal
I would agree with your statement regarding politics that rests solely on wealth distribution of the populist kind. Wealth needs to be created so that one has something to add to everyone's bag.
And I agree that _some_ redistribution is necessary for a healthy society. But the cost of slowing growth must be weighted agaist it. And populist calls for "no billionaires" etc are going to be bad for all, including the poor, in the end
Disagree about the billionaire bit. Accumulates too much power too narrowly. Then one can subvert the market and rule of law. It seems the line lies somewhere between a hundred million and billion dollars at the current value of a dollar.
I am happy and eager to make exceptions on a case by case basis if that billion dollars have been made in exchange of tangible goods and services.
I just see political influence as separate issue. Make sure they cannot lobby/donate (prison if they do) and problem solved.
Why being tangiable so important? E.g. a billionare made it on physical music CD cs one made it on music streaming? As long as it's legal, why prioritize physical form?
That's too naive. Laws work differently once you have billions of dollars. They can and will be bent and politicians will be too happy to do that for you. It's win win for both.
Ignoring this aspect of the way the world works is living in a fantasy world, no less fantastic than a communist utopia.
Oh! I chose my word poorly. Streaming is very much "tangible" in the sense I had intended. "No regret transaction" is perhaps a better term than tangible, for the notion I am trying poorly to capture.
Let's take Walter Bright. I would love him to be a billionaire if he isn't one already. He made many delightful "goods", (to entertain oneself with and also to pay one's bills writing programs in a language so pleasant *). No party in the transaction would regret such a transaction, even in hindsight.
There are legal ways to accumulate wealth, however, without exchanging any goods and services. For example, HFT (ought to be called low latency rather than high frequency), speculation on the stock marketd. Derivative markets, for example, are zero sum, for one to win someone else has to lose. The wealth accumulated by such means has not been created, merely redistributed.
* Wish more companies used D though, so that it's actually feasible to earn your keep writing in D.
How much bending is actually happening vs just hypotheticals thought? Elon Musk donated a lot and then suddenly Big Beautiful Bill hit Tesla very hard. Doesn't sound like he got a favor paid back. Also, not that we should emulate Russia (not at all) but since 2000s there any oligarch trying to do anything political goes to jail or "falls out of their window". So possible in principle to remove the influence (I don't approve of the method though).
Sure, HTF is zero sum. I just think that focus on it is excessive. 99.9% of businesses are not. Regret would be nice to include in consideration but I doubt one can reliably measure it in practice
Much bigger than non-derivative stock market for sure.
"The derivatives market is, in a word, gigantic—often estimated at over $1 quadrillion". The stock market would be puny in comparison. This is quite well known so was quite surprised by your objection.
The derivatives market is much larger than the stock market, both in sheer trading volume and total face value. While global stock markets represent a total value of roughly \(\$120\) trillion, the estimated notional value of the global derivatives market easily exceeds \(\$500\) trillion to \(\$1\) quadrillion.
Derivative markets are necessary for price discovery but when they tower over in volume over the market whose prices it was supposed to discover it is serving a purpose that towers over its justified/motivating purpose.
Elon Musk donated a lot of money and among many other things, his companies avoided investigations. The fact that neither Trump or Putin have any loyalty doesn't negate the fact that money buys you tremendous power.
It doesn't negate the influence gain, however the Putin and Trump examples show that this influence is often (very) limited and short lived, not "tremendous"
It has rarely (if at all) worked out for any other country though. One or the other super power will make sure that does not happen.
US scuttling Iran's nationalisation of their oil being one example.
Even without geopolitical meddling, landfall discoveries of wealth at national scale has been frightfully difficult to manage well or to realize the value of. Your currency strengthens, your other industries lose out the on the price war, your economy gets skewed and sensitive to the health of one sector. In general it has been a curse than a boon.
Norway has so far pulled this of phenomenally well.
The French had a few thoughts about this, back in the day.
FDR's New Deal raised taxes on the wealthy, and gave to the poor. Seems to have done America well. Post-war Japan, South Korea, and Taiwan land redistribution did well. And of course, there's the Nordic countries. Norway happens too have oil, but that doesn't explain Sweden and Denmark.
In most western nations, the “people who run the government” get paid a salary similar to a good software engineer (or maybe a doctor), and progressive taxation lets the government fund social services including free healthcare and tertiary education.
Rather than use Stalin as a straw man, maybe try take your nation in direction that helps people, rather than away?
I'm not worse off, just because some chucklefuck has a yacht or a jet. I'm worse off when their wealth lets them out bid me for things that are scarce. Housing is currently in short supply in in-demand areas. Access to doctors is another one. The rich still only get one vote, but let's be real, being rich means buying tons of ads pushing a rich person's agenda in the run up to an election. Also tax codes. The rich get to put their kids in private schools, rather than having better public schools. That goes for other public goods too.
"Educate yourself" is almost always a shibboleth that the speaker of the phrase actually doesn't even know how to explain it to someone. It is a phrase of moral superiority and is not interested in whether the other person actually educates themselves or not. Or they might educate themselves and come to the opposite conclusion as you, in which case, maybe you should have educated (or indoctrinated) them first.
The user in question, begins with assumptions on how wealth and markets work that do not match anything I know of in economics.
At one point they say that in a market economy there is no theft.
At another point they say that wealth concentration does not occur.
To begin to explain how they are working, I would have to invest in understanding the specific ideological framework they are using. Then figure out how to translate normal terms into their model.
This is a degree of care and effort I spend on people I love and care deeply about.
There is a threshold after which “educate yourself” is a genuine and reasonable statement, because the average person does not have the above average capability required to disentangle the motivated reasoning of a commenter.
> The user in question, begins with assumptions on how wealth and markets work that do not match anything I know of in economics.
I'm not surprised. My dad taught free market economics as a professor in his later years. Students would come up to him shocked that there was a case for free markets.
I broadly agree with you, but do you believe the US has a free market? With regulatory capture and other ways to influence politics to favor one corporation over another, I don't think it fully does.
I did, which made me come to this conclusion. You seem to think value is created by extracting money from a product, while value actually is created by the work it takes to create said product. How much money one does extract has nothing to do with a products value. In your Tailor Swift example earlier, the value was created by her recording the music, not by her selling tours.
The value is absolutely in how much you can sell it. Otherwise every startup that subscribes to the "build it and they will come" philosophy would've been successful, which is obviously not the case and is a common problem that YC specifically tells founders to look out for. There is no value in building anything if you cannot convince others it is valuable. The labor theory of value is not valid.
Yikes, posting like this will get you banned here regardless of how right you are or feel you are. I'm not going ban you for this because the account doesn't seem to have a history of it, plus everyone goes on tilt sometimes. Please don't do it again though.
Also, please avoid generic ideological battle on HN - it's tedious, predictable, and leads to flamewars like this. (That goes for all the commenters on both sides of this argument, of course.)
An obviously flaggable comment will get flagged. If you can't say anything other than that then I'm not sure why you'd reply. And anyway, if you can't understand why digging ditches all day is not valuable (after all, look at all the hard work they're doing!) then I'm not sure what to tell you. It's a shame, 4 month old account but still succumbs to comments like this, not sure how HN moderation can fix that.
> value is created by extracting money from a product
Nope. It is created by creating something valuable that other people want to pay for.
> value actually is created by the work it takes to create said product
That's the Labor Theory of Value, which is a Marxist tenet and has been thoroughly discredited. For example, a CEO can decide to take Bunker Hill, or take Sausage Hill. If he picks the more profitable hill, he created more money, with the same amount of labor.
> the value was created by her recording the music, not by her selling tours.
Nope. It was selling tickets to her concerts that made her a billionaire, not her music. That's why she did the concerts.
BTW, why do you think that some concerts charge more for tickets than other concerts? For the same amount of labor setting up the concert?
Indeed, I don't understand how anyone can seriously believe in the LTV anymore, as if someone digging holes should be as valuable in the economy, all else equal, as someone building something valuable. But that's what LTV proponents would have you believe apparently.
I was just thinking about it, rich people have money to spend in elections to get their representatives elected. When they do they make laws, or remove existing laws, to help rich get richer, so they have more money to spend in the next election. And so it goes.
Solution might be legislation that puts limits on how much money each person can spend on elections. But it may be too late, there are so many rich people in the congress that such laws can not pass.
The rich not only want to get richer they also want the lower classes to get poorer so they will work for less and will have to work longer hours so they will have less time and money to educate themselves, and thus will remain clueless about what is going on.
Definitetly, except people to which the term-limits would apply really don't like term-limits. And they are in power.
But I don't want to souond too pessimistic, there are lots of good people and progress is inevitable. AI gets put down a lot but I think it will make people much smarter.
Absurd to you here and now. Going to the Moon felt absurd to the contemporaries of Cyrano de Bergerac some 400 years ago. This did not stop him dreaming about it.
Let me more specific. I am talking about wealth that is generated by capturing value from existing assets, transactions, and people rather than by producing new goods, services, or productivity gains.
Examples are rent-seeking (making money through ownership, monopoly power, licensing, etc), financial extraction (financial manipulation, speculation, debt, and asset appreciation), housing and land appreciation, middlemen and platform fees, and corporate consolidation.
This is contrast to building factories, software, infrastructure, or goods and services that didn't previously exist. What you might define as "creating".
I don't know how you cannot buy something. You have to have a home, food, transportation, and even entertainment. The extraction economy has come to all of these things. Maybe fewer and fewer things are "worth the money" and that is a bad thing, don't you agree? I feel like you're not approaching this conversation in good faith.
Consider rents. You call that extraction. It is not, as when you rent you exchange money for use of the property. If you've ever been a landlord, you'll find out about how much it costs to make a unit available to rent. There are also high risks associated with it - Mayor Mandami is threatening to confiscate apartment buildings that have a beehive in them. Bad tenants can bankrupt you.
I once tried being a landlord. The tenant cost me more money than he paid. I exited that business. An office tower in Seattle recently was sold for about half what the owner paid for it. Oops. The idea that renting out places is free money and risk free is to not know anything about the business.
Selling people food is not "extracting". It's a fair trade - you farm the food, take it to market, sell it, and the customer eats it. You are not "extracting" from the customer.
When I rent an apartment, I'm obviously receiving something of value in return. The question is where the landlord's increasing profit comes from. If they make more profit from building new housing, maintaining it, improving it, and taking on risk, that's creating value. But if the profit comes primarily from owning a scarce asset that has appreciated because of zoning restrictions, land scarcity, market conditions, or monopoly ownership then no new wealth is created.
A massive number of businesses have failed in my city due to high rents. There are actually a good amount of commercial vacancies and in healthy market you would expect landlords to lower their prices to attract tenants -- but they don't. The actual value of the property is increasing at a rate that they actually don't have to rent out the space. The economics make it better for it sit empty. This is effectively destroying wealth for small business owners.
Selling food isn't extraction. Growing more food, improving yields, creating better products, and serving more customers is wealth creation.
My point is that an increasing amount of economic growth doesn't come from producing more value. It comes from finding ways to extract more revenue from existing value. Smaller packages for the same price, subscription fees, service charges, planned obsolescence, monopolistic pricing, rent increases, financial engineering, and other mechanisms that increase profits without a corresponding increase in output.
In other words, "growth" is being driven by capturing a larger share of the pie rather than making the pie bigger. Just look around, this is what everyone is complaining about!
I feel a lot of the arguments being made here (one way or the other) are rooted in different ideas of what is needed to make a good society. There is some objective data (e.g. The Spirit Level) which I, personally, find persuasive. But often I think folks just have different ideas of what the ideal state is.
For some people, the best society is where everyone is approximately equal (within some range).
For others, they’re happy in a very unequal world, perhaps even one where there are no bounds on that inequality.
I think the arguments of the former amount to: wealth creation in and of itself is not the problem, the problem is with its concentration in someone’s hands and the resulting inequality it causes. In the latter’s case the arguments are more “why should anyone object if I try to climb the ladder as far as I can?”
It sounds like the inequality "problem" is one of envy. And creating a better life for yourself by creating value - that's how life works. Inequality is an incentive to create more.
Explain how a free market can function with huge asymmetry in bargaining/purchasing power and access to information, and legislation intended to deter new entrants to markets? Equal access to purchase politicians?
The inequality doesn't come from the creation of wealth so much as the destruction of it. Inflation and rising prices of staple goods (there is some covariance, but the latter seems to be outpacing the former) impact poor people disproportionately hard because staple goods are more or less fixed costs. The marginal utility of an extra dollar is much higher for someone on the poverty line vs. someone who is a multi-millionaire.
> Inflation is caused by the government, not wealth creation. The US had zero net inflation from 1800-1914, despite incredible amounts of wealth creation. The inflation since 1914 is caused by government deficits.
> Government deficits are not caused by rich people. They're caused by the people you voted for.
I do not dispute this, but the deficit is exacerbated by a lack of tax revenue. Scrutiny will naturally move towards the people who are most able to fill the coffers.
> No, they're not. Their availability and price is determined by the Law of Supply and Demand.
I misspoke. What I meant to say is that the demand is fixed (i.e. inelastic). As you said, you can only eat so much - a poor person's subsistence will make up a much larger portion of their monthly budget than a that of a rich person.
Too much latency in information flow. Too high a variance.
Worse is that one can double bet on the same underlying asset on different exchanges (like taking out multiple insurance policies on the same car with payout on one policy not necessarily invalidating other policies). This grossly distorts prices.
When your part in wealth creation is having your wealth acquired by somebody else.
Wealth creation only works when the the money available to buy wealth creating instruments is significantly less than the value of those instruments.
How would markets behave if investment accounts had more cash in them than there were investment vehicles? I suspect it would be like what we see today in private equity with illiquid funds and subpar returns. The response of a market in this condition would be to look for sources of liquid funds, get them to buy the illiquid funds so that the original investors could get out leaving the new investors holding the bag of crap.
Oh wait, isn't private equity doing just that trying to make PE acceptable investment vehicle for 401ks?
> When your part in wealth creation is having your wealth acquired by somebody else.
That's called "theft". In a free market, transactions are mutually agreed upon. Equal wealth for equal wealth.
> Wealth creation only works when the the money available to buy wealth creating instruments is significantly less than the value of those instruments.
Your statement presumes that "value" is some construct independent of the market. The only "value" in commerce is what someone is willing to pay for it. There is no other useful definition of value.
As for how wealth is created, I buy a canvas and some paint for $50, and paint a masterpiece that Ritchie Rich buys from me for $10,000. I created that wealth. Taylor Swift figured out how to turn her song skillz into a billion dollars. She created that wealth. Musk figured out how to turn hunks of metal into rockets that are quite profitable. He created that wealth. And so on.
> How would markets behave if investment accounts had more cash in them than there were investment vehicles?
Now that is a complex topic. But I'll make a simple take on it. When there is more cash than things to buy, then the value of the cash diminishes. We call that "inflation". Wealth creation does not cause inflation.
As for private equity, nobody is making you invest in it.
> That's called "theft". In a free market, transactions are mutually agreed upon. Equal wealth for equal wealth.
It's also called a Transaction with asymmetric information, or being in a position in an economic system where you cannot accumulate assets because the system is stacked against you.
I also think you're confusing wealth with value. Wealth is what you have; value is what you have is worth. You may have 50 billion in stock, but its value is what you can get away with Borrowing, spending, and dying.
> Your statement presumes that "value" is some construct independent of the market. The only "value" in commerce is what someone is willing to pay for it. There is no other useful definition of value.
But it is independent of the market. A company's stock is worth all of its assets divided by the number of shares. Anything else, such as anticipation of future earnings or expected losses, is a projection into the future. They don't exist until that moment arrives when the numbers have changed.
I learned a long time ago that the money's not real until the customer's check clears. We should be applying the same logic to valuing stocks and other financial instruments.
> As for how wealth is created, I buy a canvas and some paint for $50, and paint a masterpiece that Ritchie Rich buys from me for $10,000. I created that wealth. Taylor Swift figured out how to turn her song skillz into a billion dollars. She created that wealth. Musk figured out how to turn hunks of metal into rockets that are quite profitable. He created that wealth. And so on.
Elon Musk learned how to scam investors by selling them fantasies, projections, and wishes to raise money. But here's another way to create wealth. You ask for a loan. I give you the money and charge you interest. I did nothing, I made nothing, I just put an entry in a ledger, and all of a sudden, poof, wealth has appeared.
> Now that is a complex topic. But I'll make a simple take on it. When there is more cash than things to buy, then the value of the cash diminishes. We call that "inflation". Wealth creation does not cause inflation.
When too much money is chasing too few assets, and there is anxiety about the future, asset prices rise independent of fundamentals. Traders make increasingly poor decisions and take riskier bets to increase their portfolios' value. I've heard finance people describe this as the PE ratio as too high.
> As for private equity, nobody is making you invest in it.
If you have a pension, pension funds are one of the bigger investors in private equity, and you have no choice but to ride along with the fund's choices. The private equity industry is drooling at the thought of making a similar forced choice regarding employee 401 (k) plans.
Asymmetric information is called "risk", and risk affects what one is willing to pay for it (i.e. its value). Have you ever noticed that "riskier" investments have higher rates of return?
> But it is independent of the market.
Value is entirely based on the market. And yes, it can and does change moment by moment.
> A company's stock is worth all of its assets divided by the number of shares.
No no no. A company's stock is worth what its expected future profits are.
> We should be applying the same logic to valuing stocks and other financial instruments.
That's never going to work.
> You ask for a loan...
You don't get a loan unless you put up collateral. So no wealth is created by the loan. Gawd, now I have to explain how banking works (!!!)
> you have no choice but to ride along with the fund's choices
People are fools to buy into defined benefit pensions.
Inflation. If i print $1 trillion dollars, i buy up all the resources you need to live and dangle them in front of you and control every aspect of your life.
Transference in this case can be otherwise known as economic rent.
merriam-webster definition:
"the return for the use of a factor in excess of the minimum required to bring forth its service" [0]
Think of those companies that have % take on the output of others by providing a market. Yes, they provide a service, as you say "The rich will sell you things they created".
But the arrangement allows them to extract more than it costs. That extra over and above doesn't provide extra value. It is "rent".
To be clear, at no point have I accused billionaires of illegal acts. Mind you at that scale they can influence what is legal or not, regulated or not, tariffed or not. Example, see Apple's award to Trump for tariff exemptions.
Their acts impact the economy and how money flows.
The accusation being a large chunk of their wealth is via rent than wealth creation that benefits everyone.
Now, to a business person, this is simply good business! Maximising profit on output! But from a society wide economic point of view, there can be too much of a good thing.
Sentiment-wise, the poor and middleclass want to be able to get rich too. But now it seems as though the multibillionaires will make that impossible as they seek to suck up every last dollar.
Do they really? The poor have castles and servants and hardly work? No, the real poor work 60 hours a week and live out of their cars. My children, who are not poor, with good jobs still can't afford their own home -- where is their castle, sir?
It's both an illogical question and comes from a place of ignorance about a topic which one would expect folks nowadays to have some basic competence in.
First, the illogical part: the statement was about "inequality" to which you asked about wealth generation. These are two separate issues, and inequality is not, logically, necessarily tied to wealth generation. So "How does creating wealth hurt others?" is, at best, a non sequitur.
The ignorance part: there is a lot of empirical research over many decades showing the negative impact of wealth inequality on societies. With Google and AI there's really no good reason to ask such ignorant questions when in a moment you could educate yourself, and then ask an informed and thoughtful question instead.
Not at all dense. It’s axiomatic that as societal wealth increases so does the potential for wealth inequality, and in a capitalist system it is a given that inequality will also actually increase.
Perfectly reasonable to debate if there is too much wealth inequality but just hand waving at its mere existence doesn’t add anything to the discussion. The person you’re replying to was calling this out. Ironically, you’re trying to shut down the discussion in the name of perpetuating it.
Maybe you’d like to explain how you think about wealth inequality, since you say you’re interested in a more freely flowing discussion. I’m all ears.
Fascism needs existential threats. Nobody in their sane mind will accept their hateful ideology if they were not desperate, and in panic.
> A millenarian economy is necessarily a paranoid one.
The economy does not need to be paranoid, it becomes paranoid with inequality increases the stakes on everything, when you can be obscenely rich or depressingly poor and there is no in between. That makes reasonable people paranoid. High equality with opportunities for everyone makes people reasonable and wanting to work for the common good.
> “Merely regulating it is insufficient,” wrote Pope Leo XIV in a 40,000-word essay on AI last month. “It must be disarmed.”
Of all the messages, the Pope was far from "apocalyptic". He was trying to defend the working class and avoid discrimination and xenophobia embedded in the models. No, end of times bullshit.
> If things are so dire, why are American stocks so expensive?
Because it is disconnected from the average working class experience. "Everything is good because stocks are up" is a non sequitur (except for the people that only care about their portfolio).
I'm kind of confused. It's not clear to me how or why the line keeps going up. People are spending less because of economic insecurity, everything is more expensive because of tariffs and war, interest rates have been high for four years.
The general cultural mood feels unsustainable. Like the peak-woke period around 2022 before the pendulum swung really hard in the opposite direction.
I don't know if there's a word for it, but I feel like the US has this tendency of trying to shove cultural change down people's throats in a really top-down manner that tends to backfire.
At least one really positive outcome from this whole """AI""" movement thing is that class consciousness has been increased quite a bit from it. If you're a capitalist, it's better to be one quietly and fuck people over in secret instead of painting a huge political target on your back. They've done the opposite of this. And one key difference here is that the early 2020s DEI movement had way more people behind it. This is just a small group of rich people.
Either the market is going to crash and they'll end up getting humiliated, or there will be a wave of populist backlash. In either case, we (people working in tech, SWEs, HWEs, etc) will probably get fucked over even worse than how it's been over the last couple years.
>It's not clear to me how or why the line keeps going up
Because people believe it will go up, it's a prediction market for attention. The stock market seems to have decoupled from underlying "real value" of a company and is closer to cryptocoins now. Of course the flipside is that you also have the same volatility of cryptocoins.
On some level it is probably due to flows. As long as money keeps flowing in and things don't get revaluated things look great. More money in line goes up. Money can come from both investing and corporate revenue.
Once things are valuated again to lower point it might all cascade and crash.
Yes. When people say "The economy" is improving, they are only talking about the stock market, which primarily effects rich investors and old people's retirement.
With investments AI and robotics automation, I've long been convinced that capitalism is going to eat off its own head, even before the current AI boom.
The general public won't accept a system where only a small few have the means to get by and without much work being available to humans anymore, we'll need an alternative economic system, or face serious civil unrest.
With capitalism, for work to be done, you need the possibility of homelessness and/or other types of poverty to motivate humans to work. But that isn't required for robots.
I thought the Economist used to have much higher quality articles. Where is the historical analysis?
Is it more apocalyptic now than during the cold war when kids hid under their desks? Did America really win the space race because of a presidential speech or was it the apocalyptic threat that if we lose, we will all live under communist rule? Would American manufacturing have ever caught up to Germany if it weren't for the existential threat of the world wars?
Perhaps American capitalism has always thrived on fear of the apocalypse.
America won the space race? The only milestone where the US got there first was having boots on the moon. Every other milestone (first artificial satellite, first organism in space, first man in space, first woman, first spacewalk, first craft on the moon) was achieved by the soviets first. Taking the one arbitrary milestone where the US did come in first and declare it the finish line feels weird as heck.
Well, because obviously the finish line of the space race was the Moon.
Had the Soviets declared the line on the "first woman in space", now we probably would use Soviet GPS, we would use Soviet maps of planet surfaces, we would have Soviet Mars rovers, Soviet Voyager... You get the idea.
> Well, because obviously the finish line of the space race was the Moon.
So, this choice is not super obvious to me. If it was called the moon race or whatever, I'd get it. But in this case it just feels like making up rules after the fact to make sure you "win".
EDIT: I just realized you might be saying this sarcastically. I'm really bad at picking up on that sort of stuff, and apologize if that's the case.
My point is that the "space race" didn't really have a finish line, and despite early Soviet successes, the Americans ultimately took the lead. Because they sustained that momentum continuing to explore deep space, putting people on the Moon, and achieving all kinds of successes while the Soviets stalled and scrapped their programs, it's commonly understood (in the West, anyway, as Moon landing denialism is surprisingly rampant elsewhere) that the Americans won the race.
No need to apologize. In any case, I should apologize for hiding my point behind sarcasm.
It is sore loser behaviour. Combined with typical fascist totalitarian terrorist state mind washing of the population it does stick. Repeat lies enough time and people actually start believing them instead of the naked truth.
> Where is the historical analysis? Is it more apocalyptic now than during the cold war when kids hid under their desks?
the Cold War apocalypse was solely military in nature which had few implications economically, whether you get nuked or not doesn't change an investors strategy, you just assume the world doesn't end and carry on. The cold war calculus was if anything maybe the most rationally (albeit scary) period of human history, but exceptionally stable.
There is a difference between billionaires being afraid of the communists, which was of course self-serving, hysteric and at times bigoted, but the communists were at least real and had killed some few ten million people. That's a very different form of apocalyptic thinking than billionaires giving lectures on the actual Anti-Christ in the Vatican.
Economic manias happen in periods of social transformation and hot war, not cold ones. And on that front we do look a lot more like we are in the 1920s, or some bizarre 19th century evangelical revivalism period rather than the 1960s.
>whether you get nuked or not doesn't change an investors strategy
I'm not sure about that, I think it would make me favor investments in science and technology, or if college age I would likely choose engineering over say art. The "Sputnik Shock" did have a cultural effect not to mention more direct methods like the National Defense Education Act.
Capital doesn't care about whether your work is "inherently valuable". That you think poor countries are somehow fundamentally different in this regard, exposed to the downsides of the market in a way that we here are not, is a defect of imagination.
There are two reasons I've seen that people are homeless.
The first reason, prevalent in third world countries, is because people are ostracized from society by people who don't consider them fully people. See tribal conflicts in Africa or India.
The second reason, more common in the US, is because we conflate 'homelessness' for 'mentally ill' due to the dearth of mental health facilities. These people, due to how they behave, are not people most people want to interact with. By and large, most normal behaving homeless in the United States end up not homeless about a year later, and the data show this. There is almost zero family houselessness in America. Almost no families begging on the street. Pretty much the only families you see begging in America are gypsies who are lying about their lot in life. In much of the world, there are destitute families literally begging on the street for survival.
> That you think poor countries are somehow fundamentally different in this regard,
They are inherently different. Countries like my parent's birth country of India have more than enough resources to be rich but are held back by a social system in which some people are considered less than dirt and others are elevated to be besides gods. India is - or used to be at least - a socialist country, and is still just barely capitalist. The idea that capitalism causes poverty is... insane. I would encourage people to travel to other countries and see what homelessness looks like there. If you get out of the western bubble, you'll realize that the homelessness of America is of an entirely different quality and kind.
The majority of Americans own stock and most of that is investments in the S and P 500. This is probably the closest any nation has gotten to mass public ownership of the means of production. Certainly more so than explicitly communist nations in which supposed shareholders (i.e. the citizens) have no right at all to influence company decisions.
In America shareholder lawsuits and such are common even from minority holders.
Calling the Economist anything resembling "leftist" is emblematic of the psychosis in the system. The Economist is what the Wall Street Journal was before Murdoch bought it: Focused on encouraging long term thinking, gains, and wisdom, while reporting on the short term trends. The Economist is the absolute embodiment of the old man and the kid joke from the Sopranos:
The investor: "Hey dad, let's run down this hill and fuck that cow!"
The Economist: "Be patient, son. Let's walk down this hill and fuck 'em all."
How though...there is no reasonable way anyone could look at the oil futures price and think it isn't being manipulated, which suggests maybe a lot of the market is equally fake.
Also SpaceX is getting ready to cheat SPY so the owners can basically use everyone's retirement funds as their exit liquidity.
All the AI companies seem like they are a massive bubble that they are also going to try to dump on the market in what I'm sure will be a similar scheme.
Then in politics we seem to be driving the US empire into the ground, while Trump steals billions. In just the last year Trump stole more than 10x Pelosi's entire net worth from her entire 40 year career in politics. The corruption coming from the white house is so extreme, it is probably more than all us politicians have stolen in all of us history combined. And what is absolutely insane is that a huge portion of the population seems to be in favor of it continuing this way.
We are speedrunning the end of the US empire, when it could've been a slow US decline that could've lasted the next 40 years which would've given us a chance to turn things around.
1789 was the year of the French Revolution [1]. The rest are years with financial crises.
[1] https://en.wikipedia.org/wiki/French_Revolution
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