"And unlike high incarceration rates and tax loopholes, startups are on the whole good." - pg.
I'm not sure I buy that claim outright. I'm not sure I like asking whether THING is good based on claims about the goodness of CAUSE OF THING. If hugs caused cancer, would that make cancer good? Not certain, but I do believe it would make hugs less common.
The problem with an argument like this is that it does nothing but preach to the proverbial choir. Either I buy into pg's worldview about where notional value is derived, or I don't. If a startup founder gets rich creating some new piece of technology, do they deserve the sudden windfall cash that they received? Did the VCs who provided the capital deserve that windfall? Do the workers who actually created a lot of the value in question through their labor get compensated proportionally to the value they built?
It's not an easy question to answer in the long run. Regardless of the goodness of income itself generated from VC processes, it continues to be worthwhile to question the economic engines that run off of global income inequality. When it makes economic sense to grow cotton on one continent, ship it to another for manufacture, and ship it to yet another for sale as a T-shirt, there's something fundamentally inequitable about how we pay people for their labor.
That isn't to say I've abandoned capitalism for outright marxism. But it is hard to really think about "attacking poverty" in any meaningful way that doesn't address the marked difference in wealth and potential to earn wealth between rich and poor, especially in a globalized, post-(and still)-colonial world.
So, sure generating any income in any way will cause income inequality by pg's formulation, whether it's billions from a lucky unicorn IPO or tens from a day's labor at a US minimum wage job, or far, far less making shirts in Bangladesh. The disparity is still something to remark on, especially because that disparity is really one of the major markers of power over one's own future opportunities.
> do they deserve the sudden windfall cash that they received? Did the VCs who provided the capital deserve that windfall? Do the workers who actually created a lot of the value in question through their labor get compensated proportionally to the value they built?
And does the owner of capital (investor, banker) deserve the profit (s)he gains? As jivardo_nucci said once on this very forum:
The simulation studies of Bouchard & Mezard show that, regardless of initial conditions, wealth distribution ends up a Pareto distribution with a small percentage taking almost all of the goods. The take-away of Bouchard & Mezard's studies: the very rich aren't rich because they earned it (i.e., because they are skillful or knowledgeable), they are rich mostly because they are lucky.
All my life I've assumed that, when people had a going concern or were rich, that they _earned_ their wealth. But Bouchard & Mezard says they're, for the most part, simply very lucky.
If luck, rather than skill, is the source of one's wealth, then has one "earned" that wealth? How can one lay exclusive claim to something given by chance? I would contend that no such claim can be made.
In particular, I would contend that income gained through luck is fair game for government acquisition through taxation, and if it is possible to distinguish that portion of wealth due to skill from that due to luck (and such appears possible), then the "lucky" portion is open game for acquisition to be spent or redistributed as decided by the powers-that-be.
Comments
"And unlike high incarceration rates and tax loopholes, startups are on the whole good." - pg.
I'm not sure I buy that claim outright. I'm not sure I like asking whether THING is good based on claims about the goodness of CAUSE OF THING. If hugs caused cancer, would that make cancer good? Not certain, but I do believe it would make hugs less common.
The problem with an argument like this is that it does nothing but preach to the proverbial choir. Either I buy into pg's worldview about where notional value is derived, or I don't. If a startup founder gets rich creating some new piece of technology, do they deserve the sudden windfall cash that they received? Did the VCs who provided the capital deserve that windfall? Do the workers who actually created a lot of the value in question through their labor get compensated proportionally to the value they built?
It's not an easy question to answer in the long run. Regardless of the goodness of income itself generated from VC processes, it continues to be worthwhile to question the economic engines that run off of global income inequality. When it makes economic sense to grow cotton on one continent, ship it to another for manufacture, and ship it to yet another for sale as a T-shirt, there's something fundamentally inequitable about how we pay people for their labor.
That isn't to say I've abandoned capitalism for outright marxism. But it is hard to really think about "attacking poverty" in any meaningful way that doesn't address the marked difference in wealth and potential to earn wealth between rich and poor, especially in a globalized, post-(and still)-colonial world.
So, sure generating any income in any way will cause income inequality by pg's formulation, whether it's billions from a lucky unicorn IPO or tens from a day's labor at a US minimum wage job, or far, far less making shirts in Bangladesh. The disparity is still something to remark on, especially because that disparity is really one of the major markers of power over one's own future opportunities.
> do they deserve the sudden windfall cash that they received? Did the VCs who provided the capital deserve that windfall? Do the workers who actually created a lot of the value in question through their labor get compensated proportionally to the value they built?
And does the owner of capital (investor, banker) deserve the profit (s)he gains? As jivardo_nucci said once on this very forum:
The simulation studies of Bouchard & Mezard show that, regardless of initial conditions, wealth distribution ends up a Pareto distribution with a small percentage taking almost all of the goods. The take-away of Bouchard & Mezard's studies: the very rich aren't rich because they earned it (i.e., because they are skillful or knowledgeable), they are rich mostly because they are lucky.
All my life I've assumed that, when people had a going concern or were rich, that they _earned_ their wealth. But Bouchard & Mezard says they're, for the most part, simply very lucky.
If luck, rather than skill, is the source of one's wealth, then has one "earned" that wealth? How can one lay exclusive claim to something given by chance? I would contend that no such claim can be made.
In particular, I would contend that income gained through luck is fair game for government acquisition through taxation, and if it is possible to distinguish that portion of wealth due to skill from that due to luck (and such appears possible), then the "lucky" portion is open game for acquisition to be spent or redistributed as decided by the powers-that-be.
Wealth Condensation: Why the Rich Get Richer (and the poor poorer): http://iwillknow.jesaurai.net/?p=387
The Mathematics of Inequality: https://www.austms.org.au/Jobs/Library4.html
FWIW Bouchard & Mezard are not the only researchers whose models say this:
Chance helps the rich get richer, simulation study finds: http://www.world-science.net/othernews/110722_chance.htm*