[jamieb]

If by the pie fallacy you mean that people are forgetting that the 2011 pie now represents a much greater total number of dollars than the 1920 pie, then I must point out that the simple economic fact that if we just multiplied everyone's bank balance by 1000, nobody would be better off, even though they now had 1000 times as many dollars.

And while it is true that a 1920's person could not buy an iPad, this is of scant comfort to a homeless family in 2011.

[scottjad]

Your characterization of the pie fallacy is wrong.

pg: "I can remember believing, as a child, that if a few rich people had all the money, it left less for everyone else. Many people seem to continue to believe something like this well into adulthood. This fallacy is usually there in the background when you hear someone talking about how x percent of the population have y percent of the wealth. If you plan to start a startup, then whether you realize it or not, you're planning to disprove the Pie Fallacy."

[jamieb]

Ah, ok. So "Its possible to create wealth without taking wealth from others".

Unfortunately, although it is possible to do so without taking it from others, taking it from others is still a viable way to do it. Further, its also possible to destroy wealth. And its possible for the destruction of wealth to be asymmetrical.

So is the current financial state an example of wealth creation, wealth transfer, or wealth destruction?

I'm looking at the national debt, the median house price, and the DJIA and I'm not seeing "wealth creation". What leads you choose "pie fallacy" as your answer?

[maigret]

Thumbs up for your comment. I'd like to add on that.

Let's take a very prosperous society. Even if all people get wealthier (let's say 2x), which would mean improvement in life quality and all, and 10% of them get massively richer (let's say 20x), then we as a society still have a problem. Because it will be extremely hard for someone who is in the bottom part to get to the upper one. Because of numerous reason I could elaborate on: they will not be able to afford the same schooling, or be in the same expensive circles which creates the networking opportunities. Numerous studies show growing inequality reduces social mobility (American Dream, where are you?). Sure, a couple persons will prove that wrong, but statistics are here.

So at some point, inequality is in itself a problem, even if everyone has enough to eat and more. Because everybody should have chances at succeeding - that is, changing things, but also taking responsibilities. PG means often that being a hacker is enough and you can change a lot with that only, but I think this is not enough. CEOs, judges, bankers, politicians should come from a diverse background. And you don't get there without some equality.

And don't get me started on inheritance ;)