[chakkop]

I'm curious - does anyone else think that the equality that matters is equality in material outcomes? I think that would be such a boring world. The real equality that matters is equality in dignity as human beings, equality before the law, equality in our respect to each other. I think the developed world has made monumental strides on these fronts, which are spreading around the world too. (Even though, of course, there is still work to be done).

Incidentally, I think even though (as Piketty claims) inequality may be increasing, the average person (certainly in developed nations, but also in developing ones) has also been unimaginably enriched over the past 200 years. By any ethically relevant standard (access to food, shelter, heating, technology, entertainment), we live unbelievably fortunate lives. This when our ancestors a mere 3-4 generations ago were unspeakably poor.

[regularfry]

The danger is where inequality in rates of improvement in material outcomes leads to inequality in moral outcomes. To borrow some rather loaded language, the more the 1% can buy themselves legal advantage, the more unjust the world becomes. If the rate of legal advantage is affected by the absolute difference between the 1% and the 99% (which I'd argue is demonstrably true - beyond a certain point you've got regulatory capture, but even before then, paid legal representation is the lever that matters here), then it's trivially true that a more materially unequal world is more morally imbalanced in the absence of a somewhat socialist government.

Yes, the poorest and the average now are doing better than they were. That doesn't make defensible the disparity in gains between the richest and the rest.

[chakkop]

I think the historical record is against this. Specifically: before the liberal revolution--the liberal idea that all humans are equal, which was truly revolutionary--it would have been unimaginable for a member of the peasantry to even claim equality with some lord, let alone build a legal case and have it heard. Again, it's far from perfect today, but better on many fronts. I imagine that differences will continue (they're unavoidable) but the mechanisms to cope with injustice will get better.

[regularfry]

By what mechanism? I'd say that the historical record is specifically in support of this. Civilisations start out relatively equal, inequality increases over time as wealth concentrates in elites, then they collapse either to revolution or war, reset, and start again. What evidence do we have to support the idea that we should draw a line up and to the right?

[chakkop]

Maybe more correctly: the vast majority of humanity was equal in its wretchedness, poverty, ill-health, and violence; the vast majority of people led miserable, hungry, precarious, uninteresting lives.

Again, I'm not saying we've done all we can do. I'm not saying that many of the rich don't behave reprehensibly. I'm not saying we can't do better. But the question is: How? How can we do better most effectively? I don't think the answer is 'tax global wealth and redistribute' a la Piketty--because that's not what enriched us so over the past 200 years.

So yes, it has gone up and to the right, especially in most recent history--though, because of human folly, there is no guarantee that it will continue to do so.

[Ygg2]

I'd say it's the opposite.

Humans are inherently equalist, unless they learn to not be equal.

[posterboy]

> the liberal idea that all humans are equal

This is a misconception and not what the alluded revolutionary idea is quoted by in the declaration of human rights. All humans are created equal, and I'm sure that modifier was put in not by accident, even though I couldn't explain the difference.

Point in case, one conclusion seems to be that humans are precisely not equal to each other, everybody's worth is equally indeterminate. Edit: I am biased to say this because human worth is specifically mentioned in this context in the German Grundgesetz (foundation of the law) where it's called Wuerde (dignity) and encompasses more than the capitalist idea of material value.

[Simon321]

It used to be worse, so let's not try to improve it anymore?

[ajuc]

> it would have been unimaginable for a member of the peasantry to even claim equality with some lord

Peasant wars, uprisings etc show that it wasn't unimaginable, just mostly not realistic.

[legulere]

Extreme material inequality can't be explained by some people performing better, so it's pretty obvious that it is unjust. How can unjust distribution of the material wealth be moral?

How can you morally justify that some people have to work more than 40 hours per week to be able to barely scrape by, while others can just enjoy their lives luxuriously without working at all.

Oh and in fact, poor people in western societies today have it worse than 20, 30 years ago.

[jamesblonde]

How extreme can material inequality get before it's a problem? Well the Walton family have the same amount of money (wealth) as the bottom 160 million Americans. How much more extreme does it have to get before it doesn't become the issue?

http://www.politifact.com/wisconsin/statements/2013/dec/08/o...

[posterboy]

Today, money is immaterial. Your argument, as poignant as it may be, doesn't follow.

[jamesblonde]

Money is immaterial?!? As Homer Simpson once said (to his brain): "money can be exchanged for goods and services" - like healthcare, education, important stuff....

[posterboy]

> immaterial

> 1. Having no matter or substance.

https://en.wiktionary.org/wiki/immaterial

[jamesblonde]

Pedantic and pathetic. I clarified what I meant by money, wealth.

[notahacker]

Piketty isn't really talking about "inequality in material incomes" so much as a theory that a small proportion of dynasties tends to accuulate such a large proportion of national resources that the economy ceases to operate like a competitive market and becomes a means for those holding the majority of the wealth to extract rent from those holding the diminishing remainder. That can be a problem even if you find some inequality unproblematic or even regard some level of inequality as morally necessary to reward endeavour and ingenuity and encourage economic growth, and is a problem for progress in the future even if the baseline standard of living in developed countries is very acceptable by historical standards.

There are of course limitations to how accurate his theory is, not least because much of public policy has been designed to avoid it happening.

[chakkop]

Nearly every assumption in this argument of Piketty's is flawed. Is it only the rich that have capital? What about human capital? What about creative destruction--the entry of new market players? Don't the rich (and their children) often squander their capital? More to the point: look at the evidence of the many rich people around us. Did they build this wealth by banking on r > g, or by putting idea upon idea and creating something new?

[notahacker]

The book attempts to address these in rather more detail than can be managed here, but human capital isn't likely to get you to the ranks of fabulously wealthy without the backing of VCs and their already fabulously wealthy LPs, and wealthy dynasties are generally much better at structuring their portfolios to avoid being wiped out by "creative destruction" than smaller business owners. Piketty argues that our concept of "the rich" is heavily shaped by lists which are biased towards those who create companies because their wealth is much easier to estimate than the diversified portfolios of family dynasties, and that distinguishing between the two isn't easy either (Warren Buffet, for example, is entirely self-made but has done so entirely through disproportionately successful bets on r > g rather than creating something new, and many of the entrepreneurs that have succeeded by creating and marketing something new take the eminently sensible decision to diversify those riches and become rentiers to let their fortunes continue to grow later in life). Whether he's right or wrong about the composition of the rich in general, it's pretty obvious the HN concept of the rich is skewed towards the Zuckerbergs we can aspire to emulate rather than the Koch brothers we can't.

[chakkop]

I agree with you: it is a long book, with more problems than can be enumerated and discussed here, but key amongst them is the idea that inequality--the Gini coefficient--matters above all else, and particularly matters more than the absolute improvements in living standards that we (most of us) have experienced in recent centuries. I don't think one's goal should be to enter the ranks of the 'fabulously wealthy'. Anyway, by definition, there will always be a bottom 10% or 20%.

[wslh]

> Is it only the rich that have capital? What about human capital?

There is a huge difference between the liquidity of each one.

> ... or by putting idea upon idea and creating something new?

A very tiny fraction of new creations make someone rich. Most fail or are insignificant in terms of capital.

[nhaehnle]

I'm pretty sure that only a minority of rich people are really in the ideas and creation business. If you live in Silicon Valley it might appear different, but globally speaking, the rich tend to fall into the categories of (a) inherited wealth, (b) upper management, (c) non-hard-science knowledge worker types (finance and lawyers).

Yes, r > g is only an aspect for (a), but the Piketty argument also has to be understood as a warning bell. After all, wealth and the resulting political influence make it easier to ensure that mostly (a)-types ever get into (b)- and (c)-positions in the first place. (And the tendency for this has always existed and exists today, just look at the university system in most countries for evidence.)

[k-mcgrady]

If you look at things over 200 years we are doing much better but I think it's more important to look at it generation by generation. For example, growing up I will have had a comfortable life - going into adulthood supposedly my generation will be the first (no idea when that data goes back to) to do worse than it's parents. So throughout my life I will become less comfortable. It seems like we've now reached a point where the poor ACTUALLY become poorer and the rich become richer,

[dredmorbius]

"Money, as Mr Hobbes says, is power."

Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations

https://en.m.wikisource.org/wiki/The_Wealth_of_Nations/Book_...

A significant nature, and cause, of wealth is power. Smith wrote at length on both elements.

One might surmise this is a strong reason it matters.

[dghf]

> The real equality that matters is equality in dignity as human beings, equality before the law, equality in our respect to each other.

But in practice these things are to some extent dependent on equality (or at least less disparity) in material outcomes.

"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." -- Anatole France.

[dragonwriter]

> I'm curious - does anyone else think that the equality that matters is equality in material outcomes?

Maybe not directly, but...

> The real equality that matters is equality in dignity as human beings, equality before the law, equality in our respect to each other.

Material outcomes demonstrably affect all of those things, and cannot avoid doing so, generally, because "material outcomes" are power, and power is fungible, and those are all important areas to which power is applied.

[toddchambery]

Tyler Cowen addressed this in an interview, saying that the inequality that "really matters" is the difference in your living standard versus your sister's husband[1].

[1]: http://www.hudson.org/events/1356-are-plutocrats-drowning-ou...

[js8]

> I'm curious - does anyone else think that the equality that matters is equality in material outcomes?

You should not forget that inequality is not only about material outcomes. It is also about power to decide economic matters, such as how capital is invested. Shouldn't these matters be decided more equally by all members in society?

[AndrewKemendo]

What people seem to care about is not net improvement, but relative improvement. It really comes down to if you feel like things aren't better because you are comparing them to other people. It's not right or wrong, it's just an impossibly moving target.

[chakkop]

Agreed with you and k-mcgrady. I think maybe we will need to use more and more 'hacks' that make us aware that it's already reasonably good.

FWIW, Benjamin Friedman ('The Moral Consequences of Economic Growth') has great research that shows that when people stop feeling like they're advancing and participating in economic growth, moral and ethical ideals like open-mindedness, acceptance, tolerance, and democracy deteriorate, which is concerning.

[oneloop]

When I talked about these things, I make the distinction between "equality" and "equality of opportunities".