IIRC, one of the things that changed back then was a movement away from workers having retirement plans with the companies they worked for (pensions) and toward managing their retirement individually (IRAs). This could have conceivably led to a new, steady source of investment in the stock market through mutual funds and whatnot (and perhaps even more aggressive investments presumably), which, if the changes shown on that graph could be thought to be generously helped by investment income, may explain some of this.
Disclaimer: I don't know enough about this stuff to make a definitive argument.
The Copyright Act of 1976, perhaps? If we look at the list of wealthiest Americans, most of them are there because they provide something to the world that nobody else is able to directly copy. Without competition, there is no mechanism to spread the money around.
This would certainly disproportionately impact authors, entertainers, and anyone else who makes royalties from media, but I don't know that they represent a large enough swath of the economy to account for the broad trends we see here.
To my original point, though, making money off of a copyrighted work represents income from an asset, the value of which compounds over time, due to inflation.
> I don't know that they represent a large enough swath of the economy to account for the broad trends we see here.
I'm not sure it is that broad to begin with. The 99.999 percentile of adults with these near-infinite income gains represents only ~2,000 people. While wealth and income aren't the same thing, I expect there is a lot of overlap with this list[1] that outlines 400 of the potential names.
If you look at how they made their fortunes, many are directly attributable to copyright. Bill Gates certainly wouldn't have topped the list if anyone was free to copy/resell Windows.
> To my original point, though, making money off of a copyrighted work represents income from an asset, the value of which compounds over time, due to inflation.
Increased value of an asset does not necessarily translate to increased income. A primary residence, for instance, is a good example. The value of your home may be increasing, but nobody is paying you to live there. Many people are quite happy to pay top dollar for an asset that generates no revenue on the hope that capital gains alone make the purchase provide returns.
But you do rightfully point out that those who have entire control over a certain asset have complete control over the streams of money directed at that asset. That is not exclusively limited to copyright, but changes to copyright opened up a whole new set of wide-ranging assets to hold that were previously not there. Anyone holding hard assets was presumably already milking it for everything it was worth, thus, while incredibly profitable, not increasingly profitable.
I know people without valid credential sometimes have very insightful ideas.
And sometimes it's hard to have a discussion with someone when they don't understand the fundamentals of a field.
However it would be nice if you went into detail as opposed to just linking to that book. It's not part of the standard economic body of knowledge so I don't think it would be appropriate to expect your would be arguers to read it, especially when the author's wikipedia page is
G. Edward Griffin (born November 7, 1931) is an American far-right conspiracy theorist, author, lecturer, and filmmaker. He is the author of The Creature from Jekyll Island (1994), which promotes theories about the motives behind the creation of the Federal Reserve System.[1][2] Griffin's writings include a number of views regarding various political, defense and health care interests. In his book World Without Cancer, he argues that cancer is a nutritional deficiency that can be cured by consuming amygdalin, a view regarded as quackery by the medical community.[1][3][4] He is an HIV/AIDS denialist, supports the 9/11 Truth movement, and supports a specific John F. Kennedy assassination conspiracy theory.[1] Also, he believes the actual geographical location of the biblical Noah's Ark is located at the Durupınar site in Turkey.[5]
And James Watson has some pretty wacky ideas about biology, but he still discovered the structure of DNA. I'm not sure how not to take most of this, other than as ad hominem.
Other people have cited links elsewhere in the thread [0], and I don't feel especially compelled to be redundant. Not sure what to suggest other than googling some Austrian economists and their views on inflation.
Aren't there multiple schools of thought about economics? How do I know which one is the Right One to believe? Do they differ fundamentally on some levels?
I feel like googling for some school's teachings runs the risk of drinking one side's kool-aid, without even realizing what the counter-viewpoint is. Is there a good way to get a neutral overview of the different economic schools of thought, other than taking courses at a local university?
One of the differences is Austrians don't rely on empiricism. They start off with first principles about how humans behave and basically prove all of their proofs about human behavior and economics from their.
Mainstream economics has a much larger reliance on empiricism(especially recently after the Great Recession invalidated a lot of Chicago school models).
They differ fundamentally but like any field you should start with the mainstream. Start with the consensus of how the recognized leaders of a field agree on how the world works. Then start branching off into sub-fields(some of which will be labeled quackery like the Austrians). This doesn't mean they're wrong. Many times a sub-field is labeled as quacks before the mainstream finally accepts them. But more often than not the mainstream is right.
Some recognized leaders would be Greg Mankiw(representing conservative mainstream economic thought) and Paul Krugman/Brad Delong(representing liberal mainstream economic thought).
Also I think the best way to start an education in a particular field is with a textbook. They are great overviews of a field.
Thank you for great starting points. I think my biggest hurdle was that I didn't feel like I had a good handle on how to discern the mainstream from the quacks. I appreciate your concise overview :)
> I think the best way to start an education in a particular field is with a textbook.
None of them are right, but some of them are useful.
Many of their followers forget the fact that they are thinking in simplified models. If reality seems to contradict the model, it is because the reality is somehow deficient from the ideal of the model and if we could only just shape reality to be closer to the model...or so most economic arguments seem to go especially when it comes to public policy.
Wikipedia is actually pretty good at being a neutral source in this area.
You referenced G. Edward Griffin's book, which implicitly points to him as an authority on the subject so I think that its completely acceptable to question his authority. (I'm more familiar with ad hominem as an attack on the person giving the argument, i.e. you, not someone they reference as an authority)
I'm also not aware of James Watson's wacky ideas about biology. I know he has some controversial and maybe racist ideas about intelligence, but I don't think any of his ideas about biology are described as quackery.
And its about Bayesian inference, sometimes the mainstream is wrong. Not as often as it's right, but sometimes it's wrong. Sometimes people without credentials make large contributions to a field, not nearly as often as the credentialed make contributions but sometimes. Rarely a conspiracy theorist is right. But I think people who maybe don't know that much about economics should at least be aware of his position in the field before investing considerable amount of time reading his book.
Maybe vaccines cause autism, but it's a weird place to start a biology education.
You're seeing something shaped like an exponential growth curve and missing the fact that it's not a growth curve at all. Think about what's on the x-axis here. The graph is really a histogram with average income growth binned into one percentile intervals.
On the second, thanks for the reference, haven't read that. Would be interested to hear how you think that change would lead to these effects.
> You're seeing something shaped like an exponential growth curve and missing the fact that it's not a growth curve at all.
Okay, slice the upper quartile and graph it over time. Now it's a proper growth curve, but it communicates the exact same idea.
> On the second, thanks for the reference, haven't read that. Would be interested to hear how you think that change would lead to these effects.
Quick thought experiment that expands on my explanation in the original comment: Suppose you have (a) a wage-earner who spends 90% of their income on goods & saves/invests the other 10%, and (b) an investor who earns an income from assets, spends 10% on goods and reinvests the other 90%.
Now (for the sake of simplicity) suppose inflation is 10% per year. What happens after year 1? What about year 2?
Disclaimer: I don't know enough about this stuff to make a definitive argument.