Mod Note (Andy): Best of Eddie, this was originally posted on 1/21/14. To see all of our top content from the past, click here.
I think intellectually we all know that the game is rigged, and it's something we put out of our minds because we've been raised to believe that we could possibly be the exception to the rule. I mean, that's the basis of the American Dream: statistically, you don't have a Snowball's chance in hell of appreciably rising above the social class and economic situation you were born into, but because we all believe it's possible (however unlikely), we keep showing up day after day, making our employers more wealthy in the hopes that some of that scratch might "trickle down" and increase our own net worth. I'm not bemoaning that reality, mind you. I've been a willing participant since my first job at age 12, and I daresay I've done fairly well for myself.
But every so often the reality of the situation smacks you in the face, and if you haven't felt this particular bitchslap yet, get ready - because it's about to make headlines everywhere. According to Oxfam, wealth inequality on our planet has reached such an advanced stage that the combined wealth of the 85 richest people is now equal to that of the bottom 3.5 BILLION. Let that sink in for a moment. 85 people versus 3.5 billion.
Oxfam chief executive Winnie Byanyima said: "It is staggering that in the 21st century, half of the world's population - that's three and a half billion people - own no more than a tiny elite whose numbers could all fit comfortably on a double-decker bus.
"We cannot hope to win the fight against poverty without tackling inequality. Widening inequality is creating a vicious circle where wealth and power are increasingly concentrated in the hands of a few, leaving the rest of us to fight over crumbs from the top table."
I really don't even know what to say about this. I suppose I could note the irony in Oxfam presenting these findings at Davos, which is essentially a self-congratulatory orgy of global wealth inequality. What they possibly hope to accomplish in imploring the global elites to police themselves is beyond me.
Is anyone else just staggered by this statistic?
I know I'm having trouble wrapping my mind around it. To know that they're actively rigging the game to make things even worse is what's particularly offensive to me, and leads me to think that the system is in desperate need of destruction. But I can't for the life of me determine if the origin of those feelings is some innate sense of justice and equality within me, or just base envy.
How do you explain to your kids that all men are created equal when that is so clearly not the case? Maybe that's at the root of my struggle to comprehend this. How do I explain it to my kids? How do you make a child understand that this is how the (allegedly) most evolved species on the planet treats one another?
The headline is attention grabbing and no doubt will give the lay majority another reason to protest and complain about the status quo, the 1%, wall street greed, etc, etc. For the most part this seems to be an externalisation of personal problems. What most people don't understand is that wealth is a claim on future resources, it's what you make of it that counts. My thinking is as follows. Give a poor person a million dollars and he will probably buy a nice house, boat, flashy car, stuff that means nothing to the welfare of broader society but brings his personal level of well being up to a decent standard. Give a billionaire a million dollars and he will probably invest in a producing asset, such as a power plant, a new mine, a startup technology, or a growing business in the hope of earning a return on investment. In general, society as a whole would benefit in the form of cheaper goods, a new product, better distribution, competition, etc, leading to efficient allocation of humanity's resources. Granted, this assumes the billionaire has already reached the point where marginal personal expenditure has reached its limit and a return on investment has greater "marginal utility" as the microeconomist would say. But in a macro sense, I think there is a happy medium of wealth inequality, whereby the smart money at the top is charged with the allocation of scarce capital, but the bottom tier still has enough to enjoy high standards of living. Obviously on a global scale we are very far away from this point, and it seems as though we are moving further away from this ideal. Are the top 85 wealthiest to blame? Maybe, but the leaders in Africa and the poorer parts of Asia need to get their act together. They must foster an environment where investors can safely earn a return on investment without risk of bribery, corruption or expropriation. The countries that have managed to stabilise their socio-political landscape have seen external capital from the rich being used toward the greater benefit. Not saying this is the only solution, but is definitely better than welfare, handouts or redistributions which do nothing to address the underlying issues.
Having worked at a multi-family office where the average client (families only) had assets of $50mm, and seen how they invest their wealth, your thinking is oversimplified nonsense based only in theory. Additionally, the myth of the wealthy producer-hero is just that. While my sample of extreme wealth is built off of the couple hundred clients we had, the vast majority of these people are not first generation wealth. They didn't earn anything. Do you really feel like going out of your way to defend trust fund babies?
It is the principal of things. Yeah, no one gives a fuck about trust fund babies, but once we start arbitrarily milking them because of some bullshit "it isn't fair" argument who is next. And before someone drops the slippery slope fallacy argument, this is exactly how government works.
Yes, trust fund babies suck. We can all agree. But the majority of millionaires started or created small business. Billionaire are largely the same. So for every Paris Hilton that we would all like to see broke and working at McDonalds you have her relatives who created the Hilton brand and empire.
http://en.wikipedia.org/wiki/Conrad_Hilton
In 1979, Hilton died of natural causes at the age of 91. He is interred at Calvary Hill Cemetery, a Catholic cemetery in Dallas, Texas. He left $500,000 to each of his two surviving siblings and $10,000 to each of his nieces, nephews and to his daughter Francesca. The bulk of his estate was left to the Conrad N. Hilton Foundation,8 which he established in 1944. His son, Barron Hilton, who spent much of his career helping build the Hilton Hotels Corporation, contested the will, despite being left the company as acting President, Chief Executive Officer, and Chairman of the Board of Directors.
So Conrad Hilton left the majority of his estate to the Hilton foundation and his son took over the family business.
On December 25, 2007, Barron Hilton announced that he would leave about 97% of his fortune (estimated at $2.36 billion),9 to a charitable unitrust which would eventually be merged with the Conrad N. Hilton Foundation.10 By leaving his estate to the Foundation, Barron not only donated the fortune he had amassed on his own, but also returned to the Conrad N. Hilton Foundation the Hilton family fortune amassed by his father, which otherwise would have been gone to the Conrad N. Hilton Foundation 30 years previously had Barron not contested his father's will.
And Barron Hilton said he would give away 97% of his fortune also.
This is what the foundation does:
The Foundation now focuses on six strategic areas: ending chronic homelessness, preventing teen substance abuse, helping youth make the transition out of foster care, providing access to safe water, support for the work of Catholic Sisters, and working with children affected by HIV and AIDS. The Foundation also funds five smaller program areas: confronting sight loss; overcoming multiple sclerosis; responding to disasters; nurturing Catholic schools; and educating students for hospitality industry.
I suppose the alternative is to increase taxes for the ever magnanimous and beneficent government to "help" all the poor in this country.
A trust fund baby will have a far larger impact on the economy over their lifetime than will a poor person. You just have to learn to deal with the fact that life isn't fair, people aren't equal, and things aren't going to change until the labor market shifts in a way that no longer requires the overwhelming majority of people to do labor to create tangible results. When that happens, the world will be an ridiculously boring place to be.
What's weird is that I've had basically the same position as you and like 90% of my clients are first generation wealth.
Hit the nail on the head specially in terms of giving poor people money resulting in waste and that the leaders in poor countries need to take responsibility, but I would like to add that even the general populace in poor countries is to blame for example people like me who contribute nothing of true value, because paying taxes, obeying the law and charity, just do not cut it
I saw this yesterday and contemplated posting it. I'm interested to hear everyone's take.
As eye-catching as that figure may be, it should be noted that there is no level of comparability within the statement itself. If you think about it, even the poorest American is far better off than any number of Indian, Chinese, or African citizens. A banker in New York would appear just as rich to them as one of these super rich would appear to a fast food worker in America. There is a sense of relativity that seems to be missing in the picture.
If and when I have kids, I'm not going to lie to them and tell them everyone is equal. I will tell them that everyone should be treated "equitably", which is a someone different concept. I can't tell if it's a generational thing, or due to the current economic climate, but there seems to be a lot more envy over certain groups of people having far more than other groups. Personally, I feel this does not work well in building cohesion within a society, and in fact does more to stir up unrest. I think we should focus on making sure everyone has an equitable start to their lives, and worry less about what others have already gained or achieved.
Inequity in society is probably going to be the biggest issue the human species is going to deal with this century, and as of right now I can't see what the resolution is going to be.
No, I'm not staggered by this stat at all. This isn't some new concept that evolved along with modern capitalism. There has always been a tiny elite, small enough to fit in one room, that has basically ruled the world. The only difference is that now we call them CEO/Chairman of the Board instead of emperor/king.
I'm gonna pull a movie quote here, but "there may be more of us here now, but the percentages stay exactly the same." Or something like that.
Do you honestly think the world is more unequal now than when one man (Genghis Khan) ruled half of the known world?
Doesn't "85 People Control Half the World's Wealth" say something quite different than "Combined wealth of the 85 richest people is equal to that of poorest 3.5 billion."? Perhaps the general sentiment remains the same, but I would say the latter is much less surprising.
Inequality really isn't an issue. Let's not forget the natural state of man is poverty, not wealth. The reason for decreased mobility is more a function of intelligence begetting intelligence than anything else. Smart people are seldom poor, poor people are seldom smart, granted there are always exceptions, but look at what is highly correlated with poverty, low educational attainment and that serves as a rough proxy for intelligence, if you drop out before ninth grade odds are good that you're not the sharpest tool in the shed. Poverty is decreasing and by that I mean absolute poverty, the kind where people go hungry and sleep in the streets. Relative poverty will always exist and I don't see it as an issue. A millionaire among billionaires will be relatively poor, however is he really poor and do we feel bad that he has an M5 as opposed to a gallardo?
I could not disagree with you more. My opinion is that you are conflating 'intelligence' and 'education'. The fact is that you, and I don't know anything about you, do something for a living which millions of people have the mental capacity to do just as well. The reason you have the opportunity isn't your superior intelligence, but rather your education.
The extent and quality of a person's education can largely be attributed to their socioeconomic background. Poor people aren't dumber as you say. They have way less opportunities. Let's face it no one gives a shit about shootings in the hood. Shoot up the Short Hills Mall and we have an all day news bonanza. Admittance to the best universities isn't a meritocracy. Some get in based on merit, others because of their background and wealth.
To state that 'relative poverty' isn't an issue is beyond comprehension for me. The issue isn't about having less than your neighbor. It's about a few people wielding enough power (through their wealth) that they can keep millions of people (who aren't able to consolidate their wealth) down under the thumb of the powerful. I'm talking the Koch brothers funding politicians to break unions, and influence legislation so that they aren't compelled to provide health benefits.
Think of it this way. I'm uber rich. I own conglomerates and fund politicians' campaigns. One of the companies I own is actively raising prices it charges hospitals to provide ekg readings for cardiac patients. I'm making money. The companies i own won't grant health benefits to our workers, but rather we have broken their unions and agreed to pay them a few hundred a month to put towards their benefits. I'm making money. The pols in my pocket will block Obamacare to keep my costs from rising. I'm making money. Meanwhile John Q. Public is working at my company and he can barely afford to keep the lights on in his house because he got sick, and his shitty health plan is bleeding him dry. Now his kid can't go to the expensive college in state because it's private and isn't cost effective for him to come out in 2018 with $200k in debt given his prospects. So he will go to county to help out the family. But fuck him right? He should have been smarter like me, the guy who owns the conglomerate.
http://www.bloomberg.com/news/2014-01-21/bill-gates-sees-no-poor-countries-left-by-2035-in-annual-letter.html
Speak of the devil...
If only I could express my opinion like this.
This is probably one of the most rhetorically polished responses to this issue I have ever read/seen. Great job on framing the subjective reality of class mobility in western economies (particularly U.S.).
I can tell that you, sir, definitely took debate and 'pwned NOOBS back in your glory days.
It occurred to me after reading @Edmundo Braverman 's Monday mentions that I had somehow altogether missed @NYU 's first response to this thread. It introduces a few points that I believe are essential components of a dialogue on political economy that haven't yet been adequately addressed. Because of their importance, I'll devote a few paragraphs to considering the implications.
But first, a sentence in Eddie's post today struck me as a peculiar property of discussion of inequality:
One of the most frustrating elements I encounter when conversing about inequality is the perception that by denying the proposed policy "solutions for inequality", one is somehow suggesting that the impoverished "merit" their poverty or that inequality is "non-existent". Nothing could be further from the truth. This is a discussion of economic policy; it's an exercise of selecting between discrete alternatives. Each of those alternatives has a set of pros / cons and produces a very different array of outcomes.
As with any discussion of policy, the debate most often surrounds the question: "what is the most prudent set of goals?" It turns out that reaching an agreement of what is "good for human civilization" is perplexingly difficult. When various cultural, social, economic, political and geographic components of human existence are considered, it becomes difficult to empirically measure progress. In a world of rich and poor, educated and uneducated, free and unfree, relatively and absolutely impoverished, how do we determine a cogent set of policy goals? And how can we examine the success of historical policy-making? It is predominantly those questions that I will consider in my response below.
I bring this section of your response to the top because it most directly involves the primary question of policy-making goals.
To contend that relative poverty is an issue to be ignored outright is a dangerous contention. As we've seen in the last few years, the intracultural stratification of wealth and income can be the stuff of political protests and unease. Malcolm Gladwell observes in his latest book David and Goliath that people often fall victim to a "tunnel vision of achievement comparisons". Gladwell points out that the impoverished in Chile have on social surveys reported being less happy than the impoverished in Honduras, despite earning a median income with 4.5x of the purchasing power. In David and Goliath, Gladwell employs this phenomenon to suggest that a student might attain better outcomes attending a state school (like the University of Maryland) than an Ivy (like Brown), since students at Ivies often fall victim to the illusion of extreme competition: they measure their intelligence against an incredibly unrepresentative selection of the population and arrive at the erroneous belief that they are "not cut out for" their desired major. It is for this reason, Gladwell suggests, that students are far less likely to continue a STEM major from matriculation to graduation at an Ivy League school than at a state school, controlling for standardized measures of academic achievement. Outright ignoring the specter of relative achievement comparisons, indeed, is a questionable endeavor.
But Gladwell's contention here is illustrative in another respect: it is quite possible that our recent preoccupation with inequality within the U.S. has blinded us to the progress we have achieved. In his 2012 book The Better Angels of Our Nature, Steven Pinker reminds us that one of the most curious aspects of political activism is that it creates an incentive to whitewash progress to encourage continued attention on the problem. Pinker writes:
So what of these propositions? Have we fallen victim to Pinker's historical amnesia because of our escalating sensitivity to relative poverty within the U.S.? Have we succumbed to Gladwell's tunnel vision, failing to recognize our system's success relative to alternatives?
Let's start with Pinker's historical amnesia. For this portion of the post, I'll make use of one graph demonstrating the progress of capitalist countries in the last century-and-a-half, but there are several other measures that I explore below:
The trajectory of this graph is just astounding. For thousands of years of human history, living on Earth necessarily entailed accepting the realities of Malthusian economics. Mobility - in the sense that modern citizens imagine a dramatic improvement in living standards - was a pipe dream. Subsistence farming (which today we rightfully label as "poverty") was the reality for 95%+ of the population, even in the most developed countries in the world. Starvation was common, death from common illnesses, warfare was ubiquitous, violence was unpredictable and ever-present, judicial systems were both barbaric and unreliable, hygiene was absent and lifetime earnings, standard of living, lifespan, health and occupation were almost perfectly predictable at birth. It was an incredibly egalitarian world, if only because a true divergence of outcomes was possible only through the use of coercive force.
As Branko Milanovic, chief economist of the World Bank, points out, the common plight of the masses was precisely what inspired Karl Marx's Manifesto, which quite reasonably spoke of the proletarians in different parts of the world: peasants in India, workers in England, France or Germany, etc., who shared the same political interests. Divergence was non-existent; no matter the country, the working class was roughly equally poor, barely exceeding subsistence. This grassroots movement was the support for Trotsky's "permanent revolution" of worldwide class conflicts.
This brings us to Gladwell's relativistic tunnel vision.
A strange thing happened during the Industrial Revolution: some countries (namely, the bastions of free markets and international trade) escaped the Malthusian trap. On the graph above, this event is labeled the "Great Divergence". Today, one can predict with incredible precision the income of a person based solely on the country where a person lives or was born. And this makes intuitive sense, since income is a product not just of talent, but also of the marginal product of labor. A butler in the United States today performs much of the same duties as a butler in the late 19th century, yet his inflation-adjusted income is many multiples of his predecessor. Since an incremental butler entails one less manual laborer in factories, the underlying capital that enhances labor productivity in the developed world also increases income for laborers.
The stark reality of intercountry differences in income can be demonstrated with the graph below:
Seen above, the poorest 5% of Americans are situated at the 68th percentile of the global income distribution and, crucially, earn more than the wealthiest 5% of India. Today, Marx's proletariat solidarity makes little sense on a global scale; the plight of a resident of the OECD is nothing like that of a third world citizen in Sub-Saharan Africa.
However, the spread of globalization is rapidly changing that fact. Take a moment to consider the graph below, plotting the global income distribution from 1820 to 2000:
As we discussed above, the graph depicts the move from an egalitarian agrarian society of the early 19th century to the great divergence of the 20th century. As the curve evolves, it becomes bimodal as the world is separated into two distinct parts: the developed world and the third world.
What's jarring, however, is the sudden transition back to unimodality. Indeed, opening trade borders in Central and South Asia have lifted billions out of poverty and into the global economy. Globalization has literally enfranchised billions in the shared prosperity of capitalism.
Starker still is the location of the new mode: it sits atop the right tail of income distributions leading up the turn of the century. That is, the average citizen of the world today enjoys a standard of living comparable to the wealthiest citizens just 100 years ago. All of this while population as exploded.
To be sure, we've seen not only an emergence of a global middle class, but also a leap of worldwide prosperity that would have been unimaginable before that advance. The world is a better place to live than it ever has been before, and as the OECD has become more wealthy, we have, through technology, expanded the circle of prosperity into previously destitute reaches of the world.
That this advance was prompted and permitted by the rise of free markets and free exchange is beyond doubt, and ignoring the progress it entailed constricts our ability to determine prudent policy. The world today is certainly, by some relativistic measures, a more unequal place than it was at the turn of the 18th century; yet it would be ludicrous to contend that it is not also a vastly more humane, prosperous and desirable society than ever before.
It is that realization that allows us to make a final determination of policy goals. Indeed, inequality - both relative and absolute - has not led the world into a backwards aristocracy, but instead has liberated billions of people. In a very real sense, the world is a freer place today due to increased prosperity. Thus, as a matter of policy, we should focus on systems that increase aggregate wealth most efficiently, since the benefits of that progress are revealed throughout our cosmopolitan society.
You're identifying one of the most intractable human conditions: the tendency of people to attribute their successes to their own ingenuity and their failures to "the system". What's alarming about this proclivity is that it may permit us to erroneously identify systemic problems where no such problems exist.
To be sure, even the freest society (in fact, especially the freest society) cannot attain a perfectly meritocratic structure. For example, Steven Pinker highlights one of the most difficult realities to internalize: that heredity may account for a large proportion of the divergent outcomes of individuals. Pinker amalgamates data from a number of studies conducted on the predictive power of genetics, shared environments (such as parents) and unique environments (such as peer groups or roles within those peer groups). He writes:
None of this is to suggest that biology excuses inequality, that we should ignore achievement gaps or that socioeconomic environments are unimportant considerations. However, it does vindicate the observation that even in societies with perfectly equal opportunity, divergent outcomes will remain.
Unfortunately for the popularity of the laissez faire system, free markets have the uncomfortable side effect of exposing divides in achievement. And, as is the human instinct, people tend to ascribe the blame for inequality on the system and discount their own contribution to their circumstances. The economist Ludwig von Mises paints a rather bleak, but easily recognizable picture for a citizen of the Western world in his essay The Anti-Capitalist Mentality:
By now, we are familiar with this explanation: it's the same phenomenon that Gladwell identified in Chile and Ivy League schools - the propensity of human to compare themselves against a group of his or her peers. Modernity is full of time to contemplate our achievements, yet instead of recognizing the progress we have made over the history of human civilization, we choose to reminisce in the envy of those who have achieved more than we. It's a vestige of our evolutionary roots: the desire to always be better and never become complacent. And it wreaks havoc in capitalist societies.
This is the last bit I will address, since the last portion re: the Koch brothers has been explored in my previous posts.
Again, when you make statements like "the extent and quality of a person's education can largely be attributed to their socioeconomic background", you are referencing point-in-time statistics. But longitudinally, of course, the quality and quantity of a poor person's education has increased dramatically. In a society that has become more unequal due to the wealth potential in the post-Industrial world, one might expect the "wealthy aristocracy" to have trampled on the educational dreams of their underclasses. Yet the opposite is true:
And your point regarding "shootings in the hood", again, refers to point-in-time observations rather than a consideration of progress. For instance, it ignores that the number of homicides per 100,000 has declined fiftyfold in the span of a few centuries in precisely the "unequal" societies you might detest based on this rhetorical arch:
It ignores that the convicted killer would no longer be subject to vile corporal punishment and significantly less likely to be subject to capital punishment:
It ignores that if the victim were a woman, she would be astronomically less likely to be victim to rape:
It ignores that it would be significantly less likely to be a hate crime, given the ascension of the beliefs in minority rights:
Human civilization has advanced beyond recognition in the last few centuries, and a major component of that rise was the public policy that permitted the rise of capitalist societies. There can be no doubt that we should continue to make reasonable attempts to improve the conditions of our world and reduce poverty; but the mechanism that has been most successful in doing so affirms the principles of free markets and free trade. And while there is more progress to be made, we have come a long, long way forward.
I'm reminded of that joke from 2011:
A CEO, a tea party member, and a union worker are all sitting at a table when a plate with a dozen cookies arrives. Before anyone else can make a move, the CEO reaches out to rake in eleven of the cookies. When the other two look at him in surprise, the CEO locks eyes with the tea party member. “You better watch him,” the executive says with a nod toward the union worker. “He wants a piece of your cookie.”
This made me laugh out loud.
Serious question - do you think QE plays a role in this?
That's a tough question, because the answer comes down to intent, which is unknowable.
Did the Fed purposely engineer the largest financial crisis since the Great Depression in order to pull off the largest transfer of wealth in human history? If you believe that premise, you very quickly find yourself in some certifiably wacky company. Or was the largest transfer of wealth in human history an unintended consequence of the response to said financial crisis? That's probably more likely (at least that's what I believe), but the end result in either scenario was the same: the largest transfer of wealth (to the already wealthy) in human history.
Unless I completely misinterpreted your question and you were just asking if quantitative easing was simply a tool that was used in that transfer, which I think is undeniable at this point.
You have to take into account that I alone have more net worth than a few hundred million of the poorest people on earth. The statistics are rigged to gain the most wide spread anger possible. They are comparing apples to grenades. Sure they might be roughly the same shape but they sure as hell aren't even remotely the same. The wealth inequality factor will never change and has little to no effect on everyday life. Its the straight income inequality that poses the biggest problems. The poorest 3.5 billion people on the earth don't think in terms of wealth, they think in terms of income. When you are wondering where the income to put food on the table will come from then you don't really care about how many zeros are in your bank account because there are only three. 0.00 The problems with proposed solutions are infinite. With out reward no one will take any risks. With out risks taken there will be no rewards for those who ride on the coat tails of the risk takers to reap. So until there is a better system devised that rewards everyone in a just, remember just not fair, manner then we should be happy with what we have now.
When you really think about it. The average middle class American has more net worth than at least 20+ million of the poorest people in the world.
read op, didn't read thread
Thread title is wrong. According to the quotation, 85 people have more wealth than half of the world's population (the bottom half). They don't "control half of the world's wealth" as the thread title says.
Agree, thread title is misleading.
Not surprised at all that top 85 = bottom 3.5 billion. If anything thought that it would have been worse. As for the trend, I do think inequality will get worse, but it's not like this is some new phenomenon. Pretty sure the people / countries in the bottom 3.5 billion have been there for the past 500 years -- it's not like they just found themselves there yesterday.
Also, at least in the U.S. overall, I have to say that in spite of all these doom and gloom reports it seems like things are getting better when you actually look around. I mean, look at any major city -- SF, NYC, Houston, Los Angeles, Denver, Austin -- life in these cities is MUCH better than it was 20 or 30 years ago. Maybe my perspective is skewed, but I have a hard time believing that things are as awful as people say they are.
This is simply Uncle Pareto in action once again—it's a natural statistical law, not some grand conspiracy.
As for this: "We keep showing up day after day, making our employers more wealthy in the hopes that some of that scratch might "trickle down" and increase our own net worth"—it is simply untrue. We show up to work in order to earn a living. It is simply a sense of duty in discharging the commitment we have made that causes us to head to the office, not some ill-defined desire to make our employers wealthier.
And if Oxfam wants to share that sense of duty, it should stop agonizing over how much wealth the high achievers control, and focus on the opposite issue: how little wealth the less fortunate enjoy. After all, that is supposed to be its mission. The two phenomena are completely unrelated: It's not a zero-sum game.
All I know is that there's a lot of babies, toddlers, preteens, old fucks, stay at home moms/dads, and content people in the world, and that it was actually pretty easy to make more than my parents at age 22 when you're white, American, educated, male with ambition.
You weren't dealt that hand? Better luck in the next life I guess.
A guy I know posted this on Facebook. Needless to say he has been unfollowed.
This stat ignores the fact that people like Bill Gates (richest dude in the world) doesn't actually have the cash in the bank. It is paper wealth. He also created a company that employes over 100,000 people and has had an immeasurable benefit to millions others. He is also giving away most of his wealth, as are most of these 85 richest people.
Stats like this only seek to push for increased taxes so the government can gobble up more of peoples wealth and freedom and use those proceeds to manipulate and benefit themselves.
http://en.wikipedia.org/wiki/The_Giving_Pledge
81 Billionaires committed to giving away at least half their wealth.
Life doesn't have to be fair. I don't feel sorry for the poor people. They are either stupid or unlucky, or both.
Thank you.
you let your kids in on the reality step by step after around the age of say 9 by making them read abridged and simplified versions of classics like Nicholas Nickleby, The Prince and the Pauper, Uncle Tom's Cabin, Count of Monte Cristo, Martin Eden, etc ... and no shakespeare his stories are just too ridiculous to relate to... example: shylock who wants a pound of human flesh!! instead of money!! seriously? what the hell is that!!? freakin cannibal
then you move onto documentaries like The Ascent of Money, Inside Job, The four horsemen, Black gold, Blue Gold, etc
and prior to the age of 9 make it a habit for them to read all kinds of facts specially about empires and famous rulers including battles treat it like a game of Trivia
Using a single example of philanthropy is not addressing braverman's original point.
My personal view is that taxing income is not the answer as most of the people who earn $250-500k are extremely hard-working professionals. Taxing wealth on the other hand, based on my experiences seeing the finances of the super rich, seems the better route. If no one is going to cry about trust fund babies, then what's wrong with severely restricting trusts & upping the inheritance tax?
Besides that it is double taxation? So you tax income, you take income based off of investments and then you want to tax assets? All for what? To fill the government tax coffers which will be spent on military spending or inefficient government programs that essentially are used to buy votes?
And I did just post one example. Posted above is The Giving Pledge where 81 billionaires agreed to give away half their wealth. Over 100 more in the world signed up. So not just one example.
You can than the richest people in the world for Carnegie Mellon, U Chicago, etc
http://www.pbs.org/wgbh/amex/carnegie/sfeature/p_legacy.html
http://www.philanthropyroundtable.org/topic/excellence_in_philanthropy/the_rockefeller_legacy
There are countless stories of this, not just one example.
So you want to say post-apartheid SA is a libertarian paradise? Ok, sure.
Gini coefficient is skewed when a country has a lot of immigration. So basically the USA. We have a lot of very poor, uneducated immigration from Mexico which exaggerates our income inequality.
And increased tax revenue isn't going to highlight anything. The US budget and spending has been growing for a long time now, yet we still waste money and roll out inefficient programs aimed at currying favor among voting groups.
We need more comprehensive family planning in the future. The solution isn't more taxes and government services as more people become unnecessary. The solution is less people. This will benefit the planet also as we are a destructive and parasitic species.
And more government = less freedom. Sorry, but history has shown that this is never a recipe for a better life.
Agree with you there, unfortunately for a developed country a shrinking population is bad for the economy so it's quite a conundrum.
Also, I should have noted that I'm aware of GINI's shortcomings in terms of measuring wealth disparity but it is still a decent approximation.
I agree that is has some relevance, I am just so used to people throwing the stat out without knowing the things that can impact it.
I think automation and eventually robotics will offset a lower birth rate (at least in the USA).
There has to be a middle ground. Lets just look at France for example. I think we can all agree France has reached a near maximum level of taxation before people just say fuck it. Yet there are still poor ass people there, they have issues will immigration, people are protesting, rioting, etc. So I don't see taxation (especially on a global scale) as being able to solve this.
I don't know the answer, but I do know that larger government and arbitrary taxation of certain people won't solve the problem.
Yeah, I mean the US has a replacement rate birth rate (I would imagine a negative rate adjusted for high birth rate immigration), so I think as a country develops people have less kids. Just imagine what our birth rate would be if birth control and education was more widely disbursed.
I tend to believe that automation isn't going to really make the bottom 90% or something drastic like that useless. Maybe just the bottom 20%. If you had better birth control penetration it would naturally sort itself out. Maybe remove child tax benefits to further disincentive low income individuals from having children.
I am less worried about the US than other places in the world. I mean our population is relatively small and we have educational opportunities established. Places like China, India, Africa, etc are really late to the party. They have large numbers of marginally educated people with poor educational infrastructure in place at a time when automation is in full force. You are already seeing wages rise in China and automation replacing worker, not a good thing when the vast majority of the population lives on a couple dollars a day.
IMO, the social unrest will largely come from outside the US and Europe. We will look like Elysium to the outside world and will need military resources to keep people from other nations from coming to our soil. I mean we are worrying about robots putting Americans out of work. Why are we doing this when those robots will simply put developing nation workers out of work. We outsource production and then import the goods now. In the future we will have factories built in the US with mass automation/robotics producing goods for US citizens without shipping costs or dealing with riots/wage increases in other countries.
I actually think this is a bit understated. After seeing a lot of corporations in action first hand, I would say that you could safely fire at least 20 - 30% of the workforce (including the "educated" workforce) without missing a beat. It's scary to think about, but a lot of people (including high paid "senior" people) don't really do anything at work.
I would tend to agree. Having children without the requisite resources to sustain them is more or less the source of every problem on the planet.
Yeah, I guess more than 20% could get called. I'd assume that whatever industries come up with advanced robotics will need humans to do other things. Either way I think a lazy executive that is laid off could probably come up with some other sort of activity to make money. They would at least be better off than a dude at the very bottom.
Do these 85 "take" or "create" wealth? What does that wealth do? And who has done more to alleviate poverty, these 85 or Oxfam?
Growing inequality does bother me, but those are important questions.
FWIW, global wealth distribution statistics are a somewhat nebulous phenomenon. Just a few weeks ago, Credit Suisse conducted its own survey of worldwide net worth and found that the top 32 million people held 41% of wealth - pretty discrepant from this study.
Because of the lack of reliable data aggregation, headlines like this deliberately obfuscate basic statistics in favor of sensationalism.
In the USA - with all of its grand wealth accumulation - ~20% of the population has zero wealth. And that should come as no surprise: a large portion of US citizens enter the workforce with no savings or real assets and spend nearly every dollar they earn, which makes wealth accumulation a slow, but steady process. Before bonus season, I'd wager that a large portion of 1st-year IB analysts fall into the least wealthy quintile of the US, despite maintaining a very high standard of living.
With a global median per capita income of ~$2,900, I wouldn't be surprised to find that 30%+ of the world's population have zero or negative wealth. That is, someone with a few dollars of savings likely "holds more wealth" than ~30% of the global population (or pick your own sensational headline). The Oxfam study reports that the aggregate wealth of the top 85 is ~$1.65 trillion, or roughly $470 per person using the estimate of 3.5 billion for 50% of the world's population. Taking IMF data: in 2012, if we were to employ GDP per capita figures from Zimbabwe (the second poorest country on their list), 3.5 billion people would generate more annually than the total wealth of the top 85. Given that, other than the bottom 10 nations (~150 million in total population), GDP per capita is above $1,000, it's easy to determine that these wealth statistics are unduly alarmist.
All of this assumes, of course, that we should be "concerned" about the "distribution" of wealth. The very diction alone illustrates the statement's rhetorical bias (the idea that some abstract entity coercively "distributes" wealth). In fact, as the global economy becomes more and more liberalized, the "distribution" of wealth is indicative only of the voluntary exchanges of earnings for goods and services; in order to accumulate a wealth surplus of $1.65 trillion, those 85 men and women would have to generate many multiples of that in economic value paid voluntarily by global consumers.
The only reason why we should ever be concerned with the distribution of wealth is if it is, in fact, being distributed. To the extent any of those 85 men and women accumulated personal wealth via coercive power (dictatorial regimes, despots, warlords, etc.), we may have some reason for pause. But this headline offers the ludicrous suggestion that we ought to be horrified by what largely free people choose to do with their own earnings! Who are we to say that a person ought not purchase a Microsoft computer or Oracle platforms or shirts from Zara, etc.?
Furthermore, wealth is not a zero-sum game. Bill Gates did not become wealthy by hogging some fixed stack of global wealth; on the contrary, it's quite clear that the fruits of his labor most certainly added many trillions of economic wealth back into the pile (even after accounting for his [and all MSFT shareholders'] share of that income!).
There is virtually no measure by which the global poor are not incomprehensibly better-off than they were 10, 20, 30, 50, 100, 200, 500, 1,000, etc. years ago. The most abjectly impoverished countries in the world live at higher standards of living than did many of the richest countries at the turn of the century - and all this while the population of the world has ballooned beyond recognition. Far from the Malthusian doomsdays projected in the mid-19th century, human ingenuity and development has continually produced better outcomes for citizens in all reaches of the globe.
By the farcical suggestions of this headline, we should all be in dire economic circumstances ruled by the wealthy aristocracy compared to 30+ years ago. Yet precisely the opposite is true! Human rights are better protected than ever, violence is lower than it ever has been, economic freedom continues to proliferate, political corruption is at all-time lows, corporal and capital punishment have disappeared from swaths of countries, genocide, democide, politicide, infanticide, gynocide, uxoricide, homicide, etc. have fallen hundredfold, life expectancy has swelled several decades, food and clean water are available in almost all regions of the world, diseases that once would have wiped out significant percentages of the world population have been mitigated, the global middle class possesses technologies and luxuries beyond the imagination of even Andrew Carnegie - the world truly is better than ever. And, as a matter of policy, that is the only outcome with which we should be concerned.
^ I was waiting for your response. Now we just need DC and this thread will go on for pages.
Oh so true. For someone who is putatively a free marketeer, @Edmundo Braverman sure can stir up the vitriolic response of his own peer group. In this case, though, I stand in defense of optimism.
I think you might have a causation/correlation problem here. Innovation has done wonders for the masses, and especially the poor. And people like Gates are remarkable human beings. But I would argue that other factors, such as computers, the internet, and innovation in general, have had more to do with the advance in living conditions of the world's poorest than the inequality of wealth has. To be clear, the world is better off because intelligent, capable men like Bill Gates have decided to gift their fortunes to worthwhile causes. However there are other troubling consequences of the rising disparity in wealth. I gave one example above before. We can't simply look at a graph of income inequality and the living conditions of sub-saharan Africa and see them both on an upward slope and wipe our hands clean. Nothing more to see here folks.
As long as the disparity widens we will be at the greater mercy of these billionaires to do what's best for society overall instead of just using their wealth as leverage to gain even more political power and wealth by skimming a little from the fringe benefits of each employee in the US. Some want to give back and others simply want to ascend up the Forbes list and see their personal ideologies play out in American politics cough Libertarians cough
If the scales tip towards the Kochs and away from the Gates/Buffets of the world then we are in real trouble. Will middle class families starve and live like beggars on the streets of war-torn Syria? No. But that doesn't justify it simply because it's less tragic or less of an injustice.
You're drawing illusory distinctions here: wealth isn't just summoned by greedy billionaire sorcerers, it is accumulated by voluntary exchange of earnings for goods. Such exchanges only occur when both parties feel that they are economically better-off due to the transaction; and thus it is exchange that begets prosperity. I trust that you are familiar with the idea of comparative advantage, and it is precisely this concept that has driven every major advancement in the standard of living in human civilization - from the sexual division of labor in hunter-gatherer societies to the hyper-specialization in the global economy of modern times.
Bill Gates' innovation and great wealth aren't merely coincidental; there is, indeed, a causal arrow extending from innovation pointing towards great wealth. Gates could be the greediest, most selfish prick on the planet Earth; he could "hoard" every last cent of his wealth, not donate a penny to charity, and squeeze every last dollar of profit out of MSFT - the impact of such decisions would be infinitesimal compared to the enormity of his success in expediting the personal computer. Bill Gates' personal wealth is truly pennies vis a vis the incredible consequences and economic impact that the Windows computer has had on this world.
That is why he became wealthy, and it would be insane to think that the world would be worse-off if there were 85 more individuals as fabulously wealthy as he, regardless of how charitable they are! For every billion dollars of surplus wealth accumulated, many more billions of economic value have been delivered to global citizens through the virtuous positive feedback cycle of free exchange.
Also FWIW, the "most tragic injustices" you suggest (you mention beggars on the streets of war-torn countries) are directly curtailed by involvement in the international economy. International trade is among the most tightly-linked exogenous variables to reduced violence, strife, warfare and poverty. To the extent one man can convey billions of dollars of economic value to the global populace, we should be quite welcoming.
Finally, wealthy individuals "seeing their ideologies play out in American politics" is the exact opposite of the Libertarian ideal. To be sure, that would be directionally authoritarian.
Exactly. If I could give you 100 SBs I would.
I'm just surprised that OxFam would think that 85 billioinaires could ever feel comfortable sharing a double-decker bus.
@"NYU" Please tell me you don't consider the Kochs libertarians.
Good question. They have co-opted the party and consider themselves to be Libertarians. That I do know.
Assume that however we arrived at the current distribution is irrelevant. You can choose to redesign the entire system tomorrow and ignore any and all conversion costs. How would you do it? Would the new system eventually revert back to our current one? What’s the goal of the system anyway?
I’ve gone over different versions of my ideal system for fun, but in the end I figure that no matter how the system is set up it needs to allow people to move up and down the wealth ladder. The more entrenched a group becomes in a certain section the less they add to the system as a whole. You don’t have to be able to make it to the top, but you have to be able to have a real chance of having some effect on your own fate. I like to think of the financial and economic systems of the world as machines. And if there is a part of that machine that stops moving 1) it’s no longer doing any work for you, and 2) it’s a bitch to get started again.
I don’t have a lot of data to go on, but just for fun I looked through Bloomberg’s Billionaire index. Of the 200 person list, they designate just under 70% as “self –made” with their wealth totaling 2.2 trillion of the 200 person total of 3.1 trillion. I think this is at least encouraging, and if we keep seeing turnover in lists like this I don’t think the world is headed for Hell in a hand basket just quite yet.
How many poor people have nothing to do all day, yet don't take advantage of this? Not trying to say that being poor is a good thing, but lets be real. Assuming someone gets shelter, food and healthcare from the government, how many of these people do you think will really live life? Read a book, have a hobby, explore their surroundings, volunteer to make the world better?
I just think the vast majority of people have no desire to actually do anything with their lives. Just content to eat shit food, sit in front of the TV and waste their lives. We have the entire world at our finger tips with knowledge freely available, yet we still have the same % of utterly ignorant people.
Good christ bro keep sipping that Kool Aid. Let me guess you fucking love Ayn Rand?
As someone who grew up around a lot of poor people this is absolutely the case. Most poor people in the West (Canada at least) skip class to smoke weed everyday.
Obviously things are different for poor people in Africa who have to look for food all day, but being poor in the West isn't a bad life.
Given that true justice doesn't exist from a secular vantage point, I'm going to have to go with base envy on this one.
Many of these articles will have you believe that the 85 is some consortium of corrupt world beaters collectively "rigging the system" in their favor. Just take a look at the list on forbes.com. There's a lot of self made motherf*ckers in the top 85. Sure, many of them grew up well to do and/or went to elite schools, but hardly this image of a dynastic cycle of wealth.
I don't think the original topic of discussion was the 85 billionaires as people, but the proportion of their wealth relative to the rest of us.
Maybe Steinbeck should update his saying to "America is a nation of temporarily embarrassed billionaires" based on some of these posts.
I still don't get the argument about these $85B controlling wealth. There is no finite amount of wealth. Bill Gates has most of his wealth locked up in Microsoft shares.
Warren Buffet - in Berkshire Hathaway shares
Etc etc
http://www.forbes.com/billionaires/list/
You look at that list and you see a lot of people who started a business and were lucky it got so huge.
I wake up every day thinking about my own life and career. No time is speak pondering how much money my neighbor has. Only reason people care is because they want to find some way to take what someone else has.
This. I don't think it's necessarily right or wrong how much money random other people have...to me it's simply irrelevant.
I agree this is the mindset that you should have day-to-day. But on the occasions when you want to contemplate political/sociological/economic issues you have to deviate. Otherwise it's just a step above the ignorant prole only-watching-reality-tv-behavior that I'm sure everyone here looks down upon.
If you want to contemplate the issue fine, but realize that most of the people with astronomical wealth have it tied up in illiquid assets. If Bill Gates wanted to realize his wealth he would surely get a lot less than what the paper number is.
Many of the people on the Forbes list are also tech guys, Billionaires because they invented something that works in a system that didn't exist 10-20-30 years ago. As technology changes the opportunity to become wealthy changes/increases.
Lets debate the advancement of the human race and not an arbitrary fairness with regards to wealth. IMO, the biggest issue with utter poverty (aka not American "poverty") in the world is corruption in government and lack of established law/rights.
Everyone has the shared goal of a meritocratic distribution of resources, yes? So maybe 85 people are worth the labor of approx. half the world's population but I highly doubt it. To start, I think a lot of commentators should think deeper about what it means to be smart or valuable. Imo it's less about talented vs untalented, and more about how crazily individualistic we've become. We're all brothers and sisters on a floating rock in space and we are obsessed with trying to measure the unquantifiable (human life) and puritanical notions about who to punish and reward, when the boundary between me and everything and everyone else is actually quite blurred.
I'm not blaming the wealthy or antagonizing them, our system is decentralized so I think any us vs them world view is short sighted. But for all those who advocate capitalism for mirroring nature, private ownership, at least to this kind of degree, is quite unnatural no? All things come to an end, everything in life is temporary, ephemeral, that's the true nature of things. Instead we can't stop striving for longevity, capital accumulation, leaving a mark of our personal accomplishments..
Capitalism has given us a great gift, more people sit higher on maslow's hierachy than any other time in the universe. But I think we stopped progressing where introspection, not efficient production is needed. Do we have to play the game forever? Is that all life is worth?
I grew up in a poor immigrant household, and as a kid I was kind of shitty. I got in trouble all the time, I was kind of chubby, didn't get good grades.. No one really paid much attention to me and no teacher really had very high expectations of me. It would of been easy to write me off, say "well we got a dud here, he won't grow up to be much, off to the working class you go!"
But I ended up going to a good college in the east coast, I have a nice consulting gig in New York, and am paying back my debt to society. In general I turned out fine. None of that would of been possible if society as a whole didn't think to give me a chance via scholarships and financial aid, free public education, public libraries, etc.. I think America gets a bad rep from the media, but really, it's a very compassionate country
My point is, it's impossible to judge people, it takes time for people to develop or show their worth, sometimes it takes decades or generations. How many down and out fathers end up having an estranged son he had with an old flame make it to the nba or nfl? Wasn't Steve Jobs adopted? How many of our greatest artists at one point was a nobody? A dirty poor person on the bus, working at a restaurant, and so forth? And how many faceless, nameless people contribute to our society in other invisible, yet invaluable ways that might not result in material gains or fame? So shouldn't we at least be careful in not writing people off, for all socioeconomic statuses? Stop thinking the poor are lazy and stupid, stop saying that bankers are greedy and immoral? That the rich are just exploitative and lucky? I'm so tired of that kind of thing. It's always people on the left saying the rich suck, and people on the right saying the poor suck.
I don't get why it's such a bad thing to think about ways to take care of each other. I studied abroad in Berlin during college and a lot of people were surprised at how many east Berliners were still stuck in the cold war. But so is America, we really should move past that. Everything is relative, there is no such thing as a right or wrong answer for all times and circumstance. Sometimes change is needed, and clearly the way things are now, the extreme inequality (moreover an unmeriotcratic one), the way we are destroying the environment, pigeonholing each other into jobs and functions, harvesting millions of animals for are own pleasure, generally just having no respect for anything but personal enjoyment.. I mean why defend all that. It's ok not to have a solution but just admit that things are kind of fucked up, we can do better
//www.youtube.com/embed/AuqemytQ5QA
What a fucking asshole.
Its one of those sensationalist headlines. What percentage of people live in poverty compared to the percentage of people who live in poverty in 1900, 1800, 1700, 1600. The percentage has been consistently falling for hundreds of years.
With the rich vs. poor discussion aside, we should also ask whether people are better off now than they were, say, a century ago... two centuries ago. Sure, there's income disparity but overall, I suspect that humanity's overall well-being has steadily increased for many years.
So here are the actual statistics:
https://www.youtube.com/watch?v=vDhcqua3_W8
The poorest 3.5 billion people on the planet live in either precapitalistic, primarily agrarian societies, or in post communist pseudo capitalist systems. Both socioeconomic structures lack functional financial markets (or financial markets at all) entrepreneurship, and property rights/rule of law, i.e., the conditions required for the accumulation and distribution of wealth/income. The statistic that you cite, therefore, is extremely deceptive; you are comparing apples to oranges. The distribution of global income is extremely skewed due to differences in geographical socioeconomic structures. For example, the bottom 10% of the U.S. income distribution falls in the upper 30% of the global income distribution. The cutoff for the wealthiest 50% of the global income distribution is $2,138/year. The average American falls near the top 10% of the global income distribution.
So when you say that you want to "destroy the system," it isn't entirely clear which system that you're referring too. Your naive Marxian rhetoric leads me to believe that you want to destroy western economic/political systems, i.e., the most successful ones with the most normal distributions. But based on the evidence, one would reasonably conclude that if we're going to destroy a system, it should be the one that governs the conditions in areas such as South Asia, Sub-Saharan Africa, The Middle East and much of South America.
To me, this basically sums up the issue. Capitalism (market capitalism and even market socialism) isn't the issue. The issue is that the poorest people in the world live without capitalism, free markets, modern banking, private property rights, and the rule of law. When you add on the fact that their populations are snowballing out of control then you've got the perfect poison cocktail for extreme poverty.
The left, for whatever reason, sees this wealth disparity as an issue of capitalism that can only be dealt with by corrupting the rule of law, destroying financial institutions, centrally managing the economy, and stripping individuals and companies of property rights. A leftist's worldview is about par for the course for a common 8-year-old.
"When I was a child, I talked like a child, thought like a child, I reasoned like a child. When I became a man, I put the ways of childhood behind me." 1 Corinthians 13:11, the Apostle Paul.
Some goods posts by TNA and NorthSider.
Great thread... a lot of strong points from both perspectives.
I'm divided on this topic as naturally I expect some Pareto law in regards to wealth but I also sympathize with the unfortunate. It reminds me of the "Fat cats and starving dogs" scene from Margin Call:
What I find even more fascinating about threads like this is not the underlying stats but to the degree in which so many members on this site have such viceral reactions to the poor. The lack of empathy and self awareness is truly astonishing for such a well educated group.
Actions speak louder than words. I would bet dollars to donuts that your 1040's itemized tax deductions section has a big blank under "Charitable contributions".
After IB and PE I did the Peace Corps for 2.5 years. I'd say I've ponied up more than my fair share and have a much better understanding of the developing world, culturally and economically than most because of that experience. Not being elitist just calling a spade a spade. I've earned my stripes so to speak and unlike most that read economic literature or postulate about free markets I've walked the walk and can speak from real life tangible experiences. If only life was a truly easy as many posters make it out to be. Don't get me wrong I'm all for making money but people just need a little perspective on how things actually work before making such self absorbed claims that only a well educated highly compensated person can make with a myopic view of the world.
I don't think there is lack of empathy. As someone who personally experienced going up very poor I totally empathize and sympathize. What I don't agree with is snake oil salesmen (aka politicians) using the plight of the poor to increase taxes and enriches themselves and their position.
The road out of poverty is through hard work and education. Something I witnessed first hand from my parents and endured myself. The USA provides plenty of opportunities to advance, but it is up to the individual to do it. It is easy to give up, something I've seen before, but the only way to advance is to do it yourself.
We live in an educated and advanced society. Those who do not have the heart and desire to become skilled and/or educated will never enjoy wealth and success no matter how much he we tax other people. Government can and should help it's citizens exist, but it cannot help them truly live.
I have an incredible empathy for the truly impoverished people on this planet. In fact, it's quite ironic that so much mind-share in global politics is allocated to discussing the income divide within the most affluent societies in the world. Even for the poorest Western citizen, the lifestyle of the 'bottom billion' is incomprehensible.
Discussions like this highlight the internal inconsistency of left-driven dialogues re: income / wealth inequality. The policy goal of these headlines is "tax and redistribute"; it's, ostensibly, absolution for the idea of dilating coercive hegemony to subvert the free decisions of free people in a free economy. Capitalism must be contained, lest its inner demons pollute Western civilization.
Yet, free markets, free trade and participation if the global economy are precisely the tools that separates the 'bottom billion' from the first world. A cursory glance at the data reveals how hopelessly backwards is the rhetoric implicit in these articles.
The uncomfortable truth is that no one - especially not the comfortably affluent Western readers and authors of such articles - abhors the right tail of the wealth distribution: we should be most satisfied if everyone could be redirected into its spoils. Instead, we share in a common concern for the plight of the high kurtosis on the low end of the distribution. Fortunately, a perfunctory empirical examination suffices to reveal the elixir. Free markets, free trade, free people and participative government pave the path to prosperity. How lamentable, indeed, that it would be concern for the poor that would drive us away from the remedy.
Yeah, you suck, I suck, we all suck. Maybe we should just kill ourselves or something.
We need to delineate between American poor (which is more of a function of educational attainment) vs. developing nation poverty. You want to fix starvation in Africa and India? You need to bring in advanced farming techniques and a better government.
This headline is catching and incites a ton of us vs. them arguments, but you don't need to redistribute wealth or tax assets in order to help the vast amounts of people in these developing nations. Simply advance farming techniques and basic education.
I read a great article where these scientists went to a couple of villages in India with very high amounts of sickness from water borne disease (cholera, stuff like that). The village people were filtering the water through thin fabric and just drinking it. Bad idea. The researchers found that by filtering the water through 4-5 layers of fabric reduced illness by substantial amounts. They told the people this, showed them this, etc. Came back in 6 months and no one was doing it.
Tax money alone isn't going to solve this problem. Especially in countries with high levels of waste and corruption.
At this point I don't think anything can help India, the problems are too widespread and too severe. I don't know why it gets such fawning press in the west.
The Idealist, which I mentioned above, is chock full of similarly mystifying problems where demonstrably superior and simple techniques are abandoned despite their obvious merit. It's merely emblematic of the problem implicit in imposing solutions without organic support.
Am I the only one that thinks the single greatest thing that can benefit the developing nations is easy and free access to birth control?
Exactly right. Instead of all the food and medical aid, I am thinking we just dump birth control all across those regions in giant quanities. It's worth a try since the food and medical aid doesn't seem to be doing anything impactful.
Education is the best contraceptive.
I don't know why we are attacking ke18s. I mean he spent 2.5 years in the peace corps, an admirable thing. My friend is in Africa doing it now and it is anything but easy.
Donating money is important but it can also be a cop out.
I agree, particularly with the last sentence.
Thanks for the shout out. I by no means think that by doing PC makes me better than anyone. Its just something one does for whatever reason. To your point about your buddy in Africa, I can without a doubt say my 2.5 years of PC was way more challenging and difficult than my 5 years of IB/PE. Not even in the same league. Granted they aren't comparable and this isn't meant to down play the difficulties of a finance job but nonetheless PC is hard as shit and is by no means a vacation.
I guess at some point I will have to read through this thread, as there are some great points being made by some....
But I cannot believe some of the short-sighted ignorance that I'm seeing in some of the replies here. From people that should know better too.
First - the idea that inequality is a problem is one of the most dangerous ideas that has ever taken a hold of the mind of man. It's one of the most limiting, imprisoning, and destructive ideas you can give a person. How else would the world work except via inequality? How do you think thinks are accomplished except that inequality is there to provide the incentive to ensure that it is completed? If everyone was the same, if we all got paid the same, lived in the same houses (copies of each other), drove the same car, ate the same food, wore the same clothes, did the same things day in and day out for the same results and same rewards...pardon me but aside from being most certainly a place where I'd rather die an excruciating death than live...what would be the reward for anyone to even do what they do to collect what would most certainly be a meager paycheck? In such a world, the all-reaching government (and it most certainly would have to be, given that it is "protecting" people by ensuring equality) would certainly guarantee wages regardless of what you actually did. Because of course, it would be unfair otherwise. I know this is an extreme example...but when you speak of equality...that's what it is. The definition of the word is that everything would be the same, even if it wasn't mean to be so. Anyway.
This idea of a "zero-sum game" is somehow actually believed not only by people I assume are ignorant and therefore, I guess, have somewhat of an excuse to believe it - it's somehow actually accepted as a common fact by many in the finance industry, and this is highly disturbing. Mostly because it is patently false and is a lie generated by people to explain why they think wealth is evil, but also, because it is actually affecting the decisions that are made on a national scale in many countries, including our own. Marxism, communism, socialism...these were all derived from the idea that everyone should be the same, and that wealth is a zero sum game. And there's no in-between here. It either is or isn't, and all you have to do is go through an economics 101 course to see that this is so.
So, why is there so much inequality then, if everything is not a zero sum game? How can I possibly say that we don't have a problem? Well, we do have a problem. But it's not that we aren't taking measures to create equality...just typing that makes me shiver...but it's the fact that we ARE doing this. We have spent $15 trillion dollars on "the war on poverty" since it's inception...and we haven't one thing to show for it. Now, if you understand economics, you'll see exactly how this can be. Because that money didn't just appear from nowhere. It was taken from those who had, and was redistributed to those who "had not"...at least that was the idea. Honestly if that's exactly what happened, we wouldn't have to worry about a thing. After all, if 100 million people have lived in the US since 1950 (when this "war" was started), that would be enough to mail a check to $150,000 to each and every single human in that time. Clearly that hasn't happened. In fact, nothing has happened, nothing has changed. It always amazes me that people actually look to government to fix what it has caused. This is perhaps one of the best examples showing why it is mostly useless in this way.
The very reason we have inequality is due to the fact that we have enabled generations of people to rely on the government, rely on welfare, rely on handouts to get by. Why should you produce and build wealth for yourself (and eventually others) if you can just get by doing very little? The idea that wealth comes from privilege is absolutely false. Out of the Forbes 400, 273 created all their wealth from scratch. The rest may have inherited it, but the people they inherited it from certainly created it from scratch....how is this a bad thing? It isn't. Please tell me...should we just take 75% of what these people are worth, and give it to government in hopes that .01% eventually gets spent on welfare to help maybe a few thousand people make it another year barely surviving? I think not. This is insanity, obviously.
The only thing that will fix this current problem is to get rid of the massive, corrupt over-bearing mess that we now have as a government, and stop redistributing. Whether or not this actually happens is highly speculative. All you can hope to do is make it before the government decides it wants even more and decides to take it from you.
TL;DR - Inequality is not a problem, it is the driver of all activity in human history, not to mention behind every natural law there is. The massive inequality we do have is caused by "anti-inequality" redistribution policies. If we don't get rid of these, it will only get worse, until one person has everything. Economics is not a zero-sum-game. Never was. This is demonstrably false.
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