[skookumchuck]

> inequality probably hurts society overall

This suggests that if I find a gold nugget while hiking, somehow that hurts society?

Inequality benefits society overall. It provides a motivator for people to improve their lot, thereby indirectly improving the lot of many others. (For example, in the 90's the newspaper reported that Microsoft had created 10,000 millionaires in the Seattle area, exclusive of home ownership.)

Edit: I think it's ineffably sad that whenever I post that people can better themselves, that life isn't totally random, one has choices, I get a strong negative reaction.

[BariumBlue]

Inequality, but also mobility. A society with one rich person, or even an oligopoly, isn't going to motivate many people since there are only so many spots. The height of wealth doesn't have much impact either - a person isn't going to work 1000x harder because someone has 1000x more money.

There's also inefficiency - rich people tend spend personal money in inefficient ways that other people can't, such as on private jets, luxury yachts, etc., vs. poorer people, who spend a much larger fraction of their income investing into themselves with medical care and investing in efficient things such as public transport or biking, efficiently sized homes and apartments, or energy efficient appliances, for example.

EDIT: the reason why you get a negative reaction is that you imply that it's good almost everyone to be poor - everyone is motivated to work hard, so that's the ideal society, right? People reacting negatively are thinking what's the point of wealth if practically nobody in society has access to it?

[skookumchuck]

In a free market, everyone has choices. And those choices have consequences for better or worse. It's not about "access to wealth". It's about creating wealth. For example, it's never been less expensive to create a major business. You can start an internet company with a $100 pawn shop laptop. Getting a business license is mostly just filing the paperwork. Accessing the internet is free (from the public library). Accessing a worldwide market is free. Training materials in any subject you care to learn is free. You can take MIT courses for free. Advertising is free. What's stopping you?

If you do really need startup capital, there's kickstarter.com, gofundme.com. (I've successfully used kickstarter.)

You can invest in the stock market for $0 in commissions, even buying just one share.

If you're an able-bodied adult in America, you can choose to get started creating wealth, or you can choose to complain about how unfair everything is and revel in your misery. YOU get to choose. And that's wonderful.

[BariumBlue]

A lot of people aren't aware of their options. That starting a business is super simple is something that I had no idea about, and even the prospect of dealing with bureaucracy and paperwork can make the whole endeavour feel daunting and off putting. There's also financial safety / lack of a safety net - ideally you could fall back to family, but no one really wants to fall back to friends, or worse, no one. This means a lot of people choose shitty jobs over rewarding but risky jobs or endeavor.

And for the stock market, working an average job means you should really be investing into a Roth 401k, though I know some people who invest into realty.

It's kinda like telling a depressed person "just smile and don't let the small things bother you!" Progress can be hard for people for various reasons.

That said, I agree with what some one else said else where, that I mostly actually care about is to make sure every one can afford what they NEED to without going to extremes - I know a person in the military who had to eat of dumpsters to survive as a kid, and someone who was living on the doorstep of their recruiter until they got in. There are places in the US that have third world living conditions: https://www.google.com/amp/s/www.newsweek.com/alabama-un-pov...

As a side, I had brought this up with someone before, and they told me that maybe it's a good thing for children to be hungry and eat from dumpsters because then they'll be motivated and work hard as adults.

Ah, thanks the comment back, I enjoy discussing things with purple who have a different opinion.

[skookumchuck]

> A lot of people aren't aware of their options.

Then I'm happy to inform you, and you can pass it along.

> That starting a business is super simple is something that I had no idea about

It can be even simpler. Go door to door and offer to mow lawns, or clean, or tutoring. When I was a kid I'd mail order candy that wasn't available locally and sell it at school. My brother would tune up peoples' cars in their driveways.

[burroisolator]

> This suggests that if I find a gold nugget while hiking, somehow that hurts society?

Yes, if they sell the gold nugget and purchase wasteful goods and services, assuming they would not have purchased those goods and services otherwise.

If you use the money to purchase a tractor so that you can grow more food, then yes, you probably are increasing global productivity. At best, it is unclear whether private jets make you a more productive human and thus increase global productivity given their enormous costs - even if you include the motivational boost that it provides to non-private jet owners who look at the private jet and work harder as a result.

[tomohawk]

When someone has money and spends it, other people benefit. Buying that jet employs how many people? Keeping that jet running employs how many people?

Why judge what people buy with their own money? Isn't hard enough to judge what you buy with your own money?

[burroisolator]

> When someone has money and spends it, other people benefit. Buying that jet employs how many people? Keeping that jet running employs how many people?

It is true that one person's spending is another person's income but that doesn't capture the waste. While wealth isn't a zero sum game, the time of the population as a whole and the low entropy (resources) of this planet is. If you employ someone to pilot your private jet, that person isn't able to do more productive things such as pilot a plane with more people on it. In capitalism, your wallet is like a vote: you get to influence how other people spend their time and how resources are allocated.

> Why judge what people buy with their own money? Isn't hard enough to judge what you buy with your own money?

I'll give the benefit of the doubt for most things. I'm sure people will judge some of my consumption as wasteful. I do think there is a threshold in which we can tell the consumer, "I think you can do better": imagine if you hired a person to burn trees all day - and I'm not talking about slash and burn agriculture or generating power using the resulting steam/heat - just literally burning trees. I'm open to be convinced that private jets are within the threshold but as of now I don't agree.

[skookumchuck]

> if they sell the gold nugget and purchase wasteful goods and services

That wasn't the premise. The premise was that Carol hurts Betty simply by having something Betty doesn't have.

[the_gastropod]

When those "things" are increasingly lobbying power, "freedom" to destroy the environment more (travel by private jet, large homes (multiple?) with always-on climate-control, large cars, etc.), Carol does hurt Betty by having these things Betty doesn't.

Nobody is particularly upset by people owning lots of money in a bank account (few speak poorly of Bill Gates or Warren Buffet). It's when people put that capital to use that they get blowback. Koch brothers, Lori Loughlin, Felicity Huffman, and our benevolent President and much of his cabinet are wonderful examples of the absurdities the wealthy do get away with.

[burroisolator]

I apologize for inferring more than you said, but I do think that the average case of Betty finding a gold nugget or more commonly winning a lottery ticket leads to wasteful consumption. And so it spurred me to give the answer I gave.

[skookumchuck]

> wasteful consumption

People stupidly wasting their money means they run out of it. So what if they dissipate it on hookers and blow. Nothing for you to be concerned about.

[burroisolator]

Please see https://news.ycombinator.com/item?id=19529624

[mcv]

Extreme inequality does not benefit society. It's a sign that people aren't able to improve their lot, at least not without access to money. In a society where the poor can realistically improve their lot, you don't get people stuck in poverty.

Of course finding a gold nugget doesn't hurt society, but if you own the ground on which other people find gold nuggets, and that means they have to give half of their gold nuggets to you, then they benefit less from their luck, while you benefit from other people's luck. That's how you get extreme inequality.

Of course there's always going to be some inequality. Perfect equality is not something that's realistically possible or desirable, but taken to extremes, it does become harmful.

[50656E6973]

>if I find a gold nugget while hiking, somehow that hurts society?

If one person controls all the money in the world, would you consider that to be harmful to society?

If so, to what degree would that money/wealth need to be shared for that harm to subside to acceptable levels?

[burroisolator]

> If one person controls all the money in the world, would you consider that to be harmful to society?

Probably not since the money would be worthless: why would anyone want to use this money?

[50656E6973]

It's a hypothetical question, assuming they have no other option

[jandrese]

The paradox of capitalism. Due to the positive feedback loop of capital it naturally gravitates towards a system where a single individual controls all of the capital, at which point the system has completely collapsed.

In practice it would have collapsed before that point, but for basically the same reason. None of the capital is where it needs to be to be useful. This is why you need stuff like progressive taxes, public works projects, and social programs on top of capitalism, to pull money out of the top and re-inject it at the bottom lest the system get too top heavy.

[_0nac]

Citation needed. If anything, capitalism seems antifragile: individual wealth never seems to last beyond the 3rd generation.

[monocasa]

Do you have a source for that, that isn't the pithy unsourced statements from a wealth management company in an ad campaign?

[skookumchuck]

The article itself shows that each Disney generation has less money. The Kennedys are another example. Are the Rockefellers the richest people in America? The Vanderbilts? The Carnegies? The Morgans? The Astors? The Gettys? Nope to all.

The richest today are first generation - Gates, Bezos, Buffet, Musk, Case, etc.

[InitialLastName]

In other words, the only way to stabilize capitalism is for those with the money-piles to spread it around just enough that those without don't try to take any extra.

[skookumchuck]

> If one person controls all the money in the world

Finding a gold nugget takes nothing away from anyone else. Wealth is not a fixed pie at all - wealth can be created, which is what free markets do.

[asark]

It's not about the gold, it's a reductio argument aimed at gaining your agreement that there's some line beyond which inequality is harmful, so the disagreement can move on to the topic of where the line is whether than is inequality even possibly bad.

[jnbiche]

> Inequality benefits society overall.

The data suggests this is not the case. Particularly, when you look at the correlation between the gini coefficient and just about any measure of societal well-being available (life expectancy, child mortality, maternal mortality, suicide rates, many, many morbidities, WVS for happiness and life satisfaction, etc etc), it's quite clear that high level of inequality is inversely correlated with societal well-being[0].

Your argument about Microsoft is an argument about the benefits of capitalism, which I agree is very beneficial to society when channeled properly. However, capitalism is a means to an end, not an end in and of itself.

0. Yes, correlation isn't causation, but even if you assume that high inequality isn't the cause of poor societal outcomes, it's at the very least an indicator that something is going wrong and has a fairly high predicative value.

[skookumchuck]

> The data suggests this is not the case.

Au contraire. The US went from a nation of scores of millions with nothing but a suitcase to the wealthiest nation in the world with the tallest, best fed, and healthiest people. All from inequality.

(Of course, since WW2, the US has increasingly turned away from the free market towards socialism, and things have done correspondingly less well.)

[idreyn]

Nothing but a suitcase, centuries of slavery-generated wealth, and a swathe of the world's most resource-rich land ripped from its inhabitants by genocide and forced migration.

[skookumchuck]

Never mind that in the 1800s the northern economy prospered while the southern slave economy stagnated - a proximate cause of the Civil War was the south trying to economically protect itself from the booming north. The War then (literally) burned the slave generated wealth to the ground.

The end of slavery ushered in another great boom in prosperity in the US.

And, of course, attributing US wealth to stealing land from the natives doesn't explain why South America, which did the same thing, failed to prosper and remains a collection of countries people run away from on foot trying to get into the US.

[jgon]

Why do you think it is sad? Negative comment scores on Hacker News provide a motivator for you to improve your comments, thereby indirectly improving the quality of discourse for many others.

Votes on HN aren't totally random, you have choices on what sort of comments you make, and you can better your comments and yourself. Enjoy!

[skookumchuck]

It's sad because people view themselves as victims of chance with little to no power over their lives, and don't want to hear otherwise.

When I look at my friends, none of them fall into that category. For example, I have a friend who is currently reduced to living in a trailer. He's a serial entrepreneur, alternating between mansions and trailers. I've never seen him discouraged, he just picks up and takes another go at it. He's also (unsurprisingly to me) a heluva lot of fun to be around, always excited about this new venture he's doing.

People who believe their lives are run by (bad) luck never want to hear about the choices they've made, and the choices that are open to them to improve things for themselves. They're boring, sad people.

[DelightOne]

Surrender to the pressure, be a fish!

[jowiar]

The problem with this mentality is feedback loops. If money flows to those who own things more easily/readily than those who do things, society will be heavily stratified despite any individual efforts to improve one’s lot.

[jl2718]

I’m not sure that this is a natural state. Maintenance of capital is expensive. It must be defended, repaired, furnished access, etc. These costs are naturally distributive.

Consider that in our society, somebody must be paying the maintenance costs of ownership. Who?

[skookumchuck]

It isn't a natural state. Rigid stratification needs to be maintained forcibly through laws. Free markets are a natural state, and not coincidentally free markets produce lot of mobility.

[r_smart]

The Pareto Principle is a bitch. There's no way to remove inequality without trampling on the rights of the few lucky people.

|If money flows to those who own things more easily/readily than those who do things

The vast majority of people with a lot of money are doing things. They are not idle, and it is not through idleness they wound up in their position. At least in the US.

This is doubly true for their money. It's not in a big swimming pool for them to paddle around in Scrooge McDuck style. Well, at least, most of it isn't.

[zdw]

Is luck a good criteria for some people having more and other less?

At the very high end (top 10, 1, 0.1 percent of incomes), is progressive taxation on income a tax on lucky breaks more than any other factors?

(other factors = intelligence, hard work, lack of bad luck like disasters, unexpected medical bills, etc.)

[r_smart]

|other factors = intelligence, hard work, lack of bad luck like disasters, unexpected medical bills, etc

How many of those can you attribute to luck? Winning the genetic lottery is one of the best things you can hope for. You have no control over it, and it greatly influences your outcomes. Born stupid and ugly? Tough luck, maybe in another life.

[skookumchuck]

If you want to be the best cyclist in the world, training for it isn't enough, you need that extra 1% advantage genetics.

But for most everything else in life, you can be plenty good at what you want to do if you're willing to train for it. You don't have to be the best programmer in the world to make quite a good living by programming. It's hardly necessary to be the best businessman ever to run a good business. Etc.

Oh, and on the internet, you can be ugly as a mud brick and it won't have one iota of influence over your success or failure.

Maybe take inventory and look at what you can do, rather than obsessing about not looking like Keanu Reeves. Even so, Peter Dinklage, Danny DeVito, Kathy Bates, Bette Davis, are not the beautiful people. I've met a few movie actors in person, and without the makeup, lighting, and director, they look like ordinary schmucks.

[r_smart]

I think you missed the point my post. I'm not one of the people on this board that like to decry success as just being a principle of luck, like it's some kind of lottery.

We're specifically talking about the wealthiest people in the world. The people who got that 1% advantage. I apparently made a mistake in describing those people as lucky (just meaning that there are only a handful of people that will sit at the top, so being one of those people is lucky; it's against the odds).

My whole argument is you can't just take their shit because you want it, and them having a lot of shit isn't a sign that they've done something wrong that allows you to trample on their rights. I think people concerned about inequality have lost the plot. Instead of helping people pull themselves up, they focus on taking from those at the top. Granted, we'll all be more equal financially, but it's hardly a utopian outcome, and no one's lot will be improved, only worsened.

[jowiar]

It’s not about rich folks Scrooge McDucking it — it’s that if a rich person does a unit of work and a non-rich person does a unit of work, the rich person accumulates more wealth than the non-rich person as a result of the work. “Rich person work” is “decide how to allocate my capital”, which isn’t an option to many, but for those who have it as an option, it’s vastly more rewarding than actively making things.

[Buttons840]

The vast majority of people doing things do not have a lot of money.

[r_smart]

Right. The Pareto principle is the observation that large amounts of resources tend to consolidate in a few 'hands'. It's observed in natural systems as well as human created ones.

[Buttons840]

So, back to your original point. You seemed to be saying that in order to reduce inequality (a good thing), you must trample of the rights of people, specifically the wealthy (a bad thing). But then you admit that it's largely luck which determines whether or not a person is wealthy.

I don't think it would be a big problem to redistribute a small portion of their wealth. Or, similar to what you said in a nearby comment, if society as a whole decides to redistribute a portion of your wealth then "tough luck" (although remember that you are still better off than most when considering how "tough" your luck is). So the original problem with reducing inequality seems to have been solved. It is not a great trespass on the rights of the wealthy to redistribute some of their wealth.

[loco5niner]

Easy fix.

Earn money by doing things(wages), then buy things that make you money (retirement account, etc).

[throwaway2048]

Except the people that have lots of money already will always outearn you on average.

[skookumchuck]

Most people in Germany lost everything in WW2, I mean everything. They were reduced to beggars.

But it wasn't long after the war ended that the people who had money before the war had money again, and the people who didn't before, didn't again. I.e. some people know how to make money. They make their own luck.

[tathougies]

Well, I mean the government insists on only allowing rich people to invest and prevent poor people from doing the same, so the claim that his mentality is what's concentrating wealth while the government's own policies get away scot free is rather silly.

[sokoloff]

If you're talking about the "accredited investor" rules, I believe that those are both intended and have the actual effect of protecting poor and middle income people from scammers (by making the exploitation of them with some fantastical get-rich-quick scheme into a specific federal crime).

Does it also prevent them from investing in Facebook in 2004? Yes it does.

[tathougies]

> If you're talking about the "accredited investor" rules, I believe that those are both intended and have the actual effect of protecting poor and middle income people from scammers (by making the exploitation of them with some fantastical get-rich-quick scheme into a specific federal crime).

Yeah, so the thing is that the wealth of a lot of the people with inherited wealth was made via investments by ancestors for whom a similar investment today would be illegal.

It is certainly true that many people lost a lot of money through bad investments before the accredited investor rules. It's also true a lot of people made a shit ton of money. The issue now is that today, they have the effect of ensuring that only the rich can invest in the most lucrative investments.

[skookumchuck]

Anyone can invest. At robinhood.com, you can even buy just one share of stock for no commission. I know a person who scrimps enough to be able to buy one share of stock per month.

[tathougies]

That's not what I'm referring to at all. I mean if your friend has a company and wants to take his company public, he can only sell the stock before the IPO to 'accredited investors', thus concentrating the bulk of the profit potential to those who are already rich. It's not just pre-IPO sales but many other investments. For example, if you live in a poor neighborhood and your friend owns a successful restaurant in your neighborhood, he cannot seek investment from you. Instead, he has to seek investment from a rich person, because the government does not think you are smart enough to invest in your friend's business. this again literally takes money from the poor and hands it to the rich.

The restrictions are completely onerous. Someone I know was soliciting investments of $25k for a business he owned in the community. I had the money in cash, and I was perfectly happy to lose it all (but hopefully I'd make some money). I believed in the business and wanted in. However, since I did not make $200k / yr, and I didn't already have $1m in wealth, I was not allowed. Why? At the time I was taking monthly vacations to Hawaii, New Orleans, skiing, etc. I was eating out every day. I was basically living a life of luxury. But, because of the amount of money in my pocket book, I was barred from taking one potential leap from the working class to the wealthy class. On the other hand, an already wealthy man would be more than allowed to invest.

Of course, I could invest in the public stock market, but the fact is that the public stock market forces people to only invest in certain companies. Many people feel skeptical towards companies over which they cannot directly observe.

Obviously, I understand the stock market exists, but if you think stocks are the most lucrative investments, you have a lot to learn about the financial systems.

[skookumchuck]

> if you think stocks are the most lucrative investments

I didn't say that. But they are the easiest to get into and it's a level playing field (all the info you need about companies is online). Few will deny that early investments in MSFT, AMZN, etc., were incredibly lucrative, and anyone could have invested in them.

As for the minimum investment thing, that came about because of endless lawsuits people bring over failed investments claiming they had no idea what they were doing and need a nanny (i.e. the government) to hold their hand. I don't advocate such restrictions, so don't hang me on it.

> you have a lot to learn about the financial systems

I've done tolerably well investing in stocks, and so as you can see I talk about what I know.

[tathougies]

They may be lucrative but since the same people were denied access to the more lucrative investments it should come as no surprise that the growth of their capital is less than the growth of capital of the rich.

This is not rocket science. Piketty says that when r > g, that is, when return on investment is greater than rate of economic growth, the rich get richer. It is not much of an extrapolation to conclude that if R > r, that is, when the rate of growth of capital of the rich people investments is greater than the rate of growth of capital of regular joe investments, that the rich also get richer

I am well aware of the reason the rules are in place. But in the same way the government cannot ban poor people from starting their own businesses, neither do they have the right to restrict investment by rhe poor. The governmebt simply has to put up with the lawsuits or declare by statute that certain behaviors cannot make someone civilly liable.

Im sure youve done well in stocks. I have too. However, given my time working in management consulting, i can assure you that you could be doing a lot better if you were allowed to invest like the rich do.