This comment doesn't make any sense without defining "extreme" vs "normal" income equality.
The argument is over economic inequality which I believe most take to mean wealth inequality, not income inequality.
Do you think that technology alone can't produce extreme income inequality? Why?
Of course not. You need people using the technology as well. Extreme inequality results from the simple fact (as exhaustively supported by Piketty) that r > g. Capital, by definition, is technology.
For any other casual viewers unfamiliar with but interested in economics, the 'r' refers to return on capital and 'g' refers to the growth rate of the economy. This section of the wikipedia article on his book seems to give a quick and decent high level overview that puts this (and a few other comments) into perspective: https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
The whole book is great. It may be ~700 pages, but it's more of a story than a heavy economy book. If anyone is interested enough to comment on this issue, this book is definitely something you'd be interested to read.
Market forces and legislation. Simple caps would defeat all attempts to do that. Realistically, the design of a system dictates how it will behave in many scenarios. Our system's properties lead to accumulation and concentration of extreme wealth. Even Citigroup's leaked docs describe it as a "plutonomy:" a system designed to shift most wealth to already rich. I like how they mentioned that voters were the greatest threat with the defense being to promote the illusion that everyone can get ahead.
Combine stuff like that with executives making 300x the average (not worst) employee to see system is clearly rigged against the many for a very few. Not even top 1%: a fraction of a percent.
Extreme income inequality is that which causes economic instability and has a deleterious effect on most people.
Determining an acceptable level of income inequality is a moving target requiring lots of analysis of data and whatever but there exists such a point at which you could say that income inequality is untenable, just the same as there exists a point at which inflation is untenable.
The "acceptable" level of inflation is around 3%, but even inflation in the low double digits isn't necessarily unworkable. It's somewhat arbitrary and a comoplex policy decision, but it's fair to say that such a level of income inequality exists at which it becomes untenable (even if we don't know what it is).
Income (in)equality doesn't depend on the kind of work the company does. One of the basic trends you can find in Picketty's "Capital ..." is that instead of investing 1/3 of company income into workers ("reasonable" split), the owner/worker salary gap grows more than ever - and that's the extreme inequality. What the company does is irrelevant in a more general overview.
What are you saying PG is confusing then? He is talking about economic inequality caused by technology.
Are you saying that technology can't cause extreme economic inequality? Comparing a Wal-mart worker vs. Bill Gates, Steve Jobs, or Paul Graham sounds like extreme economic inequality by your definition.
I think you are missing exactly the point of the post, while accusing him of being confused.
No I am not missing exactly what he is saying. He is claiming that people are critiquing startups for creating unfair economic inequality, they are not. Most people have nothing against the inequality created by most startups.
However they do have something against someone like Uber or Wallmart or the Koch brothers.
"PG insist on confusing extreme economic inequality with normal economic inequality"
Last post:
"Most people have nothing against the inequality created by most startups"
His point was that startups can produce extreme income inequality (without the system being rigged). The whole point of his essay was to not lump all the causes of income inequality together.
I haven't changed anything I am just adding more context to what I mean.
PG believes that people are against the inequality startups create. They are not because most startups don't become family dynasties. Thats the point. Only PG is talking about startups. Thats not what people talk about when they critique economic inequality and that's what he doesn't seem to understand.
Comments
This comment doesn't make any sense without defining "extreme" vs "normal" income equality. That is far from obvious.
Do you think that technology alone can't produce extreme income inequality? Why?
This comment doesn't make any sense without defining "extreme" vs "normal" income equality.
The argument is over economic inequality which I believe most take to mean wealth inequality, not income inequality.
Do you think that technology alone can't produce extreme income inequality? Why?
Of course not. You need people using the technology as well. Extreme inequality results from the simple fact (as exhaustively supported by Piketty) that r > g. Capital, by definition, is technology.
For any other casual viewers unfamiliar with but interested in economics, the 'r' refers to return on capital and 'g' refers to the growth rate of the economy. This section of the wikipedia article on his book seems to give a quick and decent high level overview that puts this (and a few other comments) into perspective: https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
The whole book is great. It may be ~700 pages, but it's more of a story than a heavy economy book. If anyone is interested enough to comment on this issue, this book is definitely something you'd be interested to read.
Market forces and legislation. Simple caps would defeat all attempts to do that. Realistically, the design of a system dictates how it will behave in many scenarios. Our system's properties lead to accumulation and concentration of extreme wealth. Even Citigroup's leaked docs describe it as a "plutonomy:" a system designed to shift most wealth to already rich. I like how they mentioned that voters were the greatest threat with the defense being to promote the illusion that everyone can get ahead.
Combine stuff like that with executives making 300x the average (not worst) employee to see system is clearly rigged against the many for a very few. Not even top 1%: a fraction of a percent.
Extreme income inequality is that which causes economic instability and has a deleterious effect on most people.
Determining an acceptable level of income inequality is a moving target requiring lots of analysis of data and whatever but there exists such a point at which you could say that income inequality is untenable, just the same as there exists a point at which inflation is untenable.
The "acceptable" level of inflation is around 3%, but even inflation in the low double digits isn't necessarily unworkable. It's somewhat arbitrary and a comoplex policy decision, but it's fair to say that such a level of income inequality exists at which it becomes untenable (even if we don't know what it is).
Income (in)equality doesn't depend on the kind of work the company does. One of the basic trends you can find in Picketty's "Capital ..." is that instead of investing 1/3 of company income into workers ("reasonable" split), the owner/worker salary gap grows more than ever - and that's the extreme inequality. What the company does is irrelevant in a more general overview.
I cleared up the language, hope it makes it more obvious what I mean.
Um, it doesn't at all? Did you change "income equality" to "economic inquality" ?
What is extreme economic inequality vs normal economic inequality? Honest question -- I literally have no idea.
Economic Inequality example. People in Harlem vs. People in Brooklyn.
Extreme Economic inequality example. People working in Walmart for less than a working living v.s. the Walmart family or the Koch family.
What are you saying PG is confusing then? He is talking about economic inequality caused by technology.
Are you saying that technology can't cause extreme economic inequality? Comparing a Wal-mart worker vs. Bill Gates, Steve Jobs, or Paul Graham sounds like extreme economic inequality by your definition.
I think you are missing exactly the point of the post, while accusing him of being confused.
No I am not missing exactly what he is saying. He is claiming that people are critiquing startups for creating unfair economic inequality, they are not. Most people have nothing against the inequality created by most startups.
However they do have something against someone like Uber or Wallmart or the Koch brothers.
You changed your criticism. First post:
"PG insist on confusing extreme economic inequality with normal economic inequality"
Last post:
"Most people have nothing against the inequality created by most startups"
His point was that startups can produce extreme income inequality (without the system being rigged). The whole point of his essay was to not lump all the causes of income inequality together.
I haven't changed anything I am just adding more context to what I mean.
PG believes that people are against the inequality startups create. They are not because most startups don't become family dynasties. Thats the point. Only PG is talking about startups. Thats not what people talk about when they critique economic inequality and that's what he doesn't seem to understand.