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Economist Says Most of Billionaire Wealth Is Unearned (evonomics.com)
36 points by elberto34 3381 days ago
7 comments

This has been espoused a long time ago by German economist/trader Silvio Gesell: https://en.wikipedia.org/wiki/Silvio_Gesell

His main work is about reducing the possibility to extract "rents" from society by closing loopholes in our current economic system:

1. Money is "better" than everything else so those holding money can extract surplus value by lending it out. This was later also found out by Keynes and others. Keynes' solution: inflation. Gesell's solution: imposing carrying costs on cash.

2. Land is required by everybody yet impossible to increase. Solution: the goverment is owner of all land yet leases it out long-term by auction. All income is distributed among all mothers, since the price of land is direct consequence of the number of children/people in a country. Now you would distribute it among all citizens and call it "basic income".

His ideas are still completely valid and deserve a wider audience.

> All income is distributed among all mothers, since the price of land is direct consequence of the number of children/people in a country.

Isn't an inherent flaw in this that it encourages people to have as many children as possible?

I'm under the impression that at a point when your population is established you want something like a 1.2 birth rate, or just a little more than enough to cover your unexpected deaths.

Well, that's a tricky argument since at what point is a population "established"?

I concur, however, since I'd prefer it to be distributed among all residents, whether born in that country or not. But that's another discussion entirely.

> Isn't an inherent flaw in this that it encourages people to have as many children as possible?

Not when this income is lower than cost of raising child.

I'm not a billionaire, but I hope to someday have most of my new wealth "unearned". Otherwise it will be very hard to retire.

If I do ever get to the point where I have enough unearned income to cover all my living expenses I plan to put it to good work.

i really wish people would just read some pikkety, which explains conclusions like the above.

the movement of wealth has a speed and a vector. all wealth moves along the path of least resistance, which means wherever it can move at high speed.

the more wealth at one node (an individual) is concentrated, the faster wealth moves toward that node, and thus it follows that the faster wealth moves toward one node the slower it must subsequently move in all future directions because there are substantially fewer people who have even greater wealth than the node. this means that all capital flows ultimately point to the richest of the rich, although there are a lot of other rich people who are enriched along the way.

rents are just a steady drumbeat of wealth moving from those with the least wealth of all nodes (proliterians) toward the middle or higher rung of nodes.

"unearned" is the wrong word. "structurally guaranteed" is a better term.

This author has conflated a lot of concepts behind a very ideologically driven thesis. At best, they have confused "rents" with "producer surplus".
If advertising aids your revenue then you're operating as a monopolist or oligopolistic. In either situation you're outputting less than optimal, extracting rent, and society loses out through waste. Billionaires have accumulated a lot of inefficient rent.
How is it possible to do the math on the loss to society? Assuming a level playing field, how does society lose out from a monopolistic business that provides something no one else offers for which customers are of their own free will, prepared to hand over their cash? And why should those buyers be the only people to benefit because they happened to hear about the product or service in the absence of advertising? Monopolies are always temporary affairs with unpredictable life spans.
Most of Billionaire Wealth is Unearned. In Other News, Water Is Wet.
It seems like "rents" has become the latest political buzzword. I see it used incorrectly to label something as "bad", but it makes the person using the word sound educated and sophisticated.

It's losing it's impact.

I feel like he defined the term quite a bit before he used it. It does describe very specific way of earning income.
If it's a very specific way of earning income, isn't the income, thus, earned?
That depends on what the definition of "earned" is: "obtained" or "gained deservedly". I think this is an example of the former definition.
The word has been used when discussing the politics of economics for over a century.
Yes, and it typically includes things like the excess salary earning by trade guilds and unions. Interesting how he didn't mention that, did he?