Is Inequality Good? New concept says "Very much so"

[Torrocca]

Never sought to invalidate her claims through this, but if you say so...
(besides that not being a valid topic for this thread)

"I didn't want to invalidate her claims, I just wanted to paint her as a hypocrite. You know, for fun I guess"

Regardless, pointing out that this is essentially neo-feudal trash isn't exactly a worthless complaint. The premise is that essentially all of the wealth should be given to the wealthy so we can go back to something akin to 17th century France and boy does that not end well for 18th century France.

Even if I legitimately was born bourgeoisie, I'd be perfectly fucking fine with being a hypocrite in advocating for fixing the problems inherently faced by the impoverished of society.

[Great Minarchistan]

Regardless, pointing out that this is essentially neo-feudal trash isn't exactly a worthless complaint. The premise is that essentially all of the wealth should be given to the wealthy so we can go back to something akin to 17th century France and boy does that not end well for 18th century France.

One can argue that such system gave lead to the Industrial Revolution. Manufacturing has an exorbitantly high barrier of entry for societies where the average income is just about enough to get by without starving -- therefore allowing for the wealthy to pile up capital will eventually kickstart industrial development, which leads to generalized economic improvements for people.

[The Great-German Empire]

Even if I legitimately was born bourgeoisie, I'd be perfectly fucking fine with being a hypocrite in advocating for fixing the problems inherently faced by the impoverished of society.

While I am against your entire ideology, I think your attitude is exactly right. You don't have to be perfect in order to be authorized to fix society's problems.

[Great Minarchistan]

Considering I have no respect for Bourgeois dogma? Nah. I'll just keep rightfully referring to this entire idea that you're peddling as the NeoFeudalist trash that it assuredly is.

So do you admit that you're essentially posting on this thread for the purpose of trolling, since all you're doing is addressing me and my idea with ideological labels and insults?

[Torrocca]

Even if I legitimately was born bourgeoisie, I'd be perfectly fucking fine with being a hypocrite in advocating for fixing the problems inherently faced by the impoverished of society.

While I am against your entire ideology, I think your attitude is exactly right. You don't have to be perfect in order to be authorized to fix society's problems.

Thanks :3

I have a question, by the way, that's probably more reserved for TGs so if you want to send me an answer through there that's fine, but: beyond the monarchist part, why exactly are you opposed to my ideology?

[Spindle]

Oh hello, someone put the Atlas Shrugged fanfiction in the nonfiction section again. Time to burn the library down...

But seriously tho, the starting framework does seem a little off - after all, if you draw your opinion from a single source you are going to run into a few issues. For example, here's a 2015 paper from the IMF saying that we should do the exact opposite. And don't get me wrong, I understand the base logic at play but I feel it's chasing after an impossible goal - it relies on the existence of a network of John Galts at the very top of the economic dogpile and in reality you don't get Randian supermen there. You find people who managed to extract as much value as possible from everyone around them, or else people who have families so rich they can't help but succeed under capitalism. That's why the productivity-wage graph is fucked. Trickle-down theory looks nice on paper, but it honestly ends up just increasing the concentration of wealth at the top to the expense of everyone else.

[Torrocca]

Considering I have no respect for Bourgeois dogma? Nah. I'll just keep rightfully referring to this entire idea that you're peddling as the NeoFeudalist trash that it assuredly is.

So do you admit that you're essentially posting on this thread for the purpose of trolling, since all you're doing is addressing me and my idea with ideological labels and insults?

I'm addressing your idea for what it is. It's that simple. You can whine about it and call me bourgeoisie in a petty attempt to delegitimatize my argument like you've done elsewhere, if you want. It doesn't make the ideology you're peddling any less of the NeoFeudalism that it is.

[Valrifell]

Regardless, pointing out that this is essentially neo-feudal trash isn't exactly a worthless complaint. The premise is that essentially all of the wealth should be given to the wealthy so we can go back to something akin to 17th century France and boy does that not end well for 18th century France.

One can argue that such system gave lead to the Industrial Revolution. Manufacturing has an exorbitantly high barrier of entry for societies where the average income is just about enough to get by without starving -- therefore allowing for the wealthy to pile up capital will eventually kickstart industrial development, which leads to generalized economic improvements for people.

Actually the Industrial Revolution was kickstarted by minor nobility and the merchant class, not extravagant aristocrats. Towards the latter stages of the Scientific Revolution, you started to get inventors funded by the state apparatus, but that was less to do with doing it for fun and more to do gaining an upper hand in terms of prestige, industry, or arms.

[Ifreann]

"Inequality is good because the wealth will trickle down"

This is a new idea?

Did someone go back in time and erase Reagonomics?

Reagan didn't go far enough, as capital gains were constrainted thanks to the increase in the effective corporate tax rate during his presidential tenure.

So he did exist in this timeline.

[Valrifell]

Reagan didn't go far enough, as capital gains were constrainted thanks to the increase in the effective corporate tax rate during his presidential tenure.

So he did exist in this timeline.

And for some reason, in this timeline, his deregulation wasn't linked to increase dissatisfaction among working class and didn't directly play into the dot com bubble and the 2008 economic meltdown.

Or "market corrections" to be politically correct to the right-libertarians in the thread.

[Great Minarchistan]

But seriously tho, the starting framework does seem a little off - after all, if you draw your opinion from a single source you are going to run into a few issues. For example, here's a 2015 paper from the IMF saying that we should do the exact opposite.

That was addressed in the start of the OP. Most of the gains from reduced inequality would be basically for the sake of increasing GDP via consumerism. I think both of us can agree that's bad.

And don't get me wrong, I understand the base logic at play but I feel it's chasing after an impossible goal - it relies on the existence of a network of John Galts at the very top of the economic dogpile and in reality you don't get Randian supermen there. You find people who managed to extract as much value as possible from everyone around them, or else people who have families so rich they can't help but succeed under capitalism.

Being rich doesn't give you automatic bonuses on returns over capital. For instance, a vast majority of the lottery winners (70% iirc?) go bankrupt after a few years, likely due to mismanagement of finances. If you get to have an excellent management skill of money -- which is precisely the endpoint of the proposal -- then your rate of return over capital will be extremely high.

That's why the productivity-wage graph is fucked. Trickle-down theory looks nice on paper, but it honestly ends up just increasing the concentration of wealth at the expense of everyone else.

The EPI calculations are pretty much skewed on price adjustments, compensation factored and what not. I'd better use BEA's calculated labor share which factors in other types of compensation and eliminates the aberrant use of price indexes in EPI's paper. When using it you can notice a mild decline from 1947 to 2002 (which might be to blame on interpolation of proprietors' income) and a major decline ever since, which is coincident with the historical increase in the slack of the job market.

Wrt market concentrations, large-cap firms have been competing with micro-cap firms to see who occupies the last place in corporate performance -- which is an indicative that concentration of capital isn't progressing at all.

[Earthbound Immortal Squad]

For decades (possibly centuries), the dispute regarding the gap between the rich and the poor has been as fiercely divided as the socioeconomic conditions of both groups. From those who highlight the disparity between the vilified top 1% and the bottom 99% to those who consider the current inequality levels as reasonable, there's often the common consideration that constantly high/increasing inequality levels is inherently bad, citing studies that prove it lowers economic dynamism -- even though most of the decrease is credited to a lower incidence of ravage consumerism, which is a good thing from an environmentalist and neoclassical POV.

However, Tyler Cowen lays a rather interesting case for the subsidization of the wealthy in his book. Simply put, when analyzing return over capital and trickledown rates it is definitely possible for the poor to be better off by handling their money to the top earners. The logic is that, assuming that the long-run trickle down rate of the income generated on the economy is 30% (a good year in the markets renders around 20%, so 30% as a mean isn't really stretching it), the bottom earners would need the wealthy to have capital returns just a bit over three times higher than themselves to achieve a breakeven on upward income redistribution. Such figures -- at least in the developed world -- are definitely attainable as explicited in the spoiler below:

(Image)

This chart, alternatively known as the elephant chart, details on the global income growth from 1988 to 2008 by percentile of income. The developed lower middle class (all the way to upper middle) is situated around the P85-95 level, where the mean income growth was approximatedly 15%. The top 1%, on the other hand, reaped an income growth of 65% over the same time period, more than four times higher than the bottom earners. Under such scenario, redistributing money to the top percent would be a good idea for the typical citizen in the First World. Knowing that the bulk of the income of the wealthiest derives from capital gains and businesses (approx. 75pc in longrun estimates) the notion is reinforced since the vast majority of income gains from the rich is implied to come from investments, not real wage growth. Such proposal can be also applied to the extremely poor countries (located at P1-5 level) with a clique of few extraordinary rich men.

Truthfully, from a historical scope, such concept might go to the extent of justifying why developing countries with redistributive policies to the poor eventually decayed into a trap of low growth (e.g. USSR, Brazil) while poor countries which maintained a caste of rich people being constantly subsidized by the State eventually ascended to attain personal incomes equivalent to First World levels (e.g. South Korea with the Chaebols and Japan with the Zaibatsu).

Albeit the OP does seem a bit bloggy due to the extent of the explanation involved, I really think it's necessary to bring this up to the NS community given the raging debates on inequality that have been long happening. That said, I'd like to hear the arguments from the users regarding the subsidization of the rich, since it's an innovative solution to boost the condition of extremely poor countries.

This does seem like a good concept but that is in a Utopian world and I am absolutely certain the world isn't that so this policy will never work at least not how it is intended too.

[Great Minarchistan]

For decades (possibly centuries), the dispute regarding the gap between the rich and the poor has been as fiercely divided as the socioeconomic conditions of both groups. From those who highlight the disparity between the vilified top 1% and the bottom 99% to those who consider the current inequality levels as reasonable, there's often the common consideration that constantly high/increasing inequality levels is inherently bad, citing studies that prove it lowers economic dynamism -- even though most of the decrease is credited to a lower incidence of ravage consumerism, which is a good thing from an environmentalist and neoclassical POV.

However, Tyler Cowen lays a rather interesting case for the subsidization of the wealthy in his book. Simply put, when analyzing return over capital and trickledown rates it is definitely possible for the poor to be better off by handling their money to the top earners. The logic is that, assuming that the long-run trickle down rate of the income generated on the economy is 30% (a good year in the markets renders around 20%, so 30% as a mean isn't really stretching it), the bottom earners would need the wealthy to have capital returns just a bit over three times higher than themselves to achieve a breakeven on upward income redistribution. Such figures -- at least in the developed world -- are definitely attainable as explicited in the spoiler below:

(Image)

This chart, alternatively known as the elephant chart, details on the global income growth from 1988 to 2008 by percentile of income. The developed lower middle class (all the way to upper middle) is situated around the P85-95 level, where the mean income growth was approximatedly 15%. The top 1%, on the other hand, reaped an income growth of 65% over the same time period, more than four times higher than the bottom earners. Under such scenario, redistributing money to the top percent would be a good idea for the typical citizen in the First World. Knowing that the bulk of the income of the wealthiest derives from capital gains and businesses (approx. 75pc in longrun estimates) the notion is reinforced since the vast majority of income gains from the rich is implied to come from investments, not real wage growth. Such proposal can be also applied to the extremely poor countries (located at P1-5 level) with a clique of few extraordinary rich men.

Truthfully, from a historical scope, such concept might go to the extent of justifying why developing countries with redistributive policies to the poor eventually decayed into a trap of low growth (e.g. USSR, Brazil) while poor countries which maintained a caste of rich people being constantly subsidized by the State eventually ascended to attain personal incomes equivalent to First World levels (e.g. South Korea with the Chaebols and Japan with the Zaibatsu).

Albeit the OP does seem a bit bloggy due to the extent of the explanation involved, I really think it's necessary to bring this up to the NS community given the raging debates on inequality that have been long happening. That said, I'd like to hear the arguments from the users regarding the subsidization of the rich, since it's an innovative solution to boost the condition of extremely poor countries.

This does seem like a good concept but that is in a Utopian world and I am absolutely certain the world isn't that so this policy will never work at least not how it is intended too.

While it'll probably not work in middle income levels, it'd mathematically work in very poor countries and first world nations as explicited in the spoiler.

[Great Minarchistan]

So do you admit that you're essentially posting on this thread for the purpose of trolling, since all you're doing is addressing me and my idea with ideological labels and insults?

I'm addressing your idea for what it is. It's that simple. You can whine about it and call me bourgeoisie in a petty attempt to delegitimatize my argument like you've done elsewhere, if you want. It doesn't make the ideology you're peddling any less of the NeoFeudalism that it is.

Mind transforming your low-effort puddle into an argument worth answering? Thanks in advance.

[Great Minarchistan]

Actually the Industrial Revolution was kickstarted by minor nobility and the merchant class, not extravagant aristocrats.

Minor nobility and the merchant class had significant capital ownership to that time. Aristocrats (such as kings) likely didn't lead the movement because of their unwillingness to invest.

Towards the latter stages of the Scientific Revolution, you started to get inventors funded by the state apparatus, but that was less to do with doing it for fun and more to do gaining an upper hand in terms of prestige, industry, or arms.

And the government is arguably one of (if not the) largest capital holders in the modern society.

[Earthbound Immortal Squad]

This does seem like a good concept but that is in a Utopian world and I am absolutely certain the world isn't that so this policy will never work at least not how it is intended too.

While it'll probably not work in middle income levels, it'd mathematically work in very poor countries and first world nations as explicited in the spoiler.

I don't deny the mathematical implications it's human nature, the reason why most of these systems won't work in practice.

[Great Minarchistan]

So he did exist in this timeline.

And for some reason, in this timeline, his deregulation wasn't linked to increase dissatisfaction among working class and didn't directly play into the dot com bubble and the 2008 economic meltdown.

Or "market corrections" to be politically correct to the right-libertarians in the thread.

The dotcom bubble and the 2008 meltdown are to blame on Greenspan (and on the Federal Reserve overall) by aggressively cheapening credit -- and as a result by encouraging private indebtment -- since the end of the Great Inflation. One could argue that Reagan is partly at fault indeed for appointing Greenspan, but I don't think you get to know that a former Austrian is actually a low interest rate peddler within one year. HW, Clinton and Bush are much more at fault by reappointing him multiple times.

[Great Minarchistan]

While it'll probably not work in middle income levels, it'd mathematically work in very poor countries and first world nations as explicited in the spoiler.

I don't deny the mathematical implications it's human nature, the reason why most of these systems won't work in practice.

The only way for it not to worth would be a savings glut among the wealthy, and that doesn't seem to be the case in the long run.

[Cetacea]

It is the middle classes who drive growth and who need to be subsidized in order that they both increase their consumption (thus helping money to circulate) and so that the middle classes can also increase savings and potential invest themselves in productive assets. These middle classes are never going to be part of the top 1% but they are the ones who keep the economy moving and create all the SMEs. So while the Zaibatsu you cite may indicate for the rich, it was at backed by a State command economy directing investment into export lead consumer products and employment of the middle classes.

Anyway Trickle down from the rich to the peasants is a myth, equality must be seized and real investment requires government intervention

[Great Minarchistan]

It is the middle classes who drive growth and who need to be subsidized in order that they both increase their consumption (thus helping money to circulate)

While consumption is indeed a redistribution tool, it does not generate growth. Truthfully consumption is merely a byproduct of preemptive generation of wealth via investment.

and so that the middle classes can also increase savings and potential invest themselves in productive assets. These middle classes are never going to be part of the top 1% but they are the ones who keep the economy moving and create all the SMEs. So while the Zaibatsu you cite may indicate for the rich, it was at backed by a State command economy directing investment into export lead consumer products and employment of the middle classes.

I mean, most of what you said here is essentially part of the theoretical byproduct of subsidizing the rich. Poor and middle class give money to the top percent, which generate high return rates with said money and prop down part of it through consumption and job creation via aforementioned investments. It's essentially live a huge savings account but heterodox and with the potential of offering higher returns than what you'd attain by doing it yourself.

[Philjia]

One can argue that such system gave lead to the Industrial Revolution. Manufacturing has an exorbitantly high barrier of entry for societies where the average income is just about enough to get by without starving -- therefore allowing for the wealthy to pile up capital will eventually kickstart industrial development, which leads to generalized economic improvements for people.

Actually the Industrial Revolution was kickstarted by minor nobility and the merchant class, not extravagant aristocrats. Towards the latter stages of the Scientific Revolution, you started to get inventors funded by the state apparatus, but that was less to do with doing it for fun and more to do gaining an upper hand in terms of prestige, industry, or arms.

The Tory supporting landed aristocrats had little incentive to take risks on new ventures when their estates already generated large amounts of income, as opposed to the Whig supporting professionals and businesspeople.

[Khataiy]

Social Darwinism at its finest

[Salandriagado]

The guy peddling this shit has been supporting Bolsonaro in Brazil, as a Brazilian himself, if you want a better idea of what you're arguing against.

Your constant appeal to ideological labels rather than considering the essence of the argument is amusing, to say the least.

That's becuase your... "argument" has no essence to consider. It consists entirely of saying "giving the rich more money will help the poor, because reasons!", and entirely ignoring all evidence to the contrary.

[Philjia]

Your constant appeal to ideological labels rather than considering the essence of the argument is amusing, to say the least.

That's becuase your... "argument" has no essence to consider. It consists entirely of saying "giving the rich more money will help the poor, because reasons!", and entirely ignoring all evidence to the contrary.

"The rich actually just tend to horde capital and consolidate into fewer entities and that's really bad for workers and consumers" isn't even a hypothetical, it's happening right now. If anything the main thing capitalists should be arguing for is that governments should break up large businesses to create more competition.

[The World Capitalist Confederation]

So you're basically ranting about the concept presented because it doesn't virtual-signal love and care towards the poorest of the society, ignoring the potential advantages to the poor that can be brought up from it? It's a bit hypocritical to attack right-wing populists given your position.

SURE. WE HAVE A RIGHT WING POPULIST IN CONTROL OF AMERICA AND NOW WE ARE THE WORLDS BIGGEST CRIMINAL NATION. AMERICA MAY AS WELL BE CLASSIFIED AS A TERRORIST ORGANIZATION SPENDING 800B A YEAR ON ITS FOOLISHLY OVER BLOATED MILITARY.

ZERO TRUST FOR RIGHT WINGERS. ZERO SUPPORT FOR RIGHT WING IDEOLOGIES. I’M DONE WITH THIS THREAD.

And you only realise this now? I can't tell whether you're just a late bloomer or you're a deranged Clintonite/"Bernie Bro" or any of that.