[btown]

So I agree that there is a non-empty set of possible technological innovations that will not be funded because "forced income redistribution" puts those companies above a risk-reward threshold. PG seems to advocate that policy's job should be to minimize the size of this set. My response, though, is that innovations require both funding AND ideas.

Let's say I wanted to maximize the set of technology ideas that could turn into profitable businesses, without worrying about the economics of whether businesses founded on those ideas would be funded to the point where they could enter widespread use. I would attempt to give people from every walk of life, every possible perspective, the opportunity to educate themselves about the mechanisms behind how their world works, and to learn to think innovatively in groups - in many ways, this is what college, business school, and business mentorships are designed to do. In other words, to maximize the set of technology ideas, I maximize the diversity of idea generators.

In this sense, a world in which income inequality is unregulated is a world where the diversity of idea generators is sub-optimal. A world of slum-like conditions is not conducive to raising a generation of engineers, I would think.

The problem, of course, is that it's much more difficult to quantify how diversity translates into plausible ideas, than it is to quantify how taxation moves the threshold of how risky a startup can be. Perhaps a study of the economic background of founders, weighted by their companies' contributions to GDP, would be beneficial.

In the speech, PG says "What's the right relationship? God only knows. It's enough for me to point out that this relationship exists." That's nice, but one should also point out that there's more to the "relationship" than just the funding side of things.

[happyscrappy]

PG addressed this earlier in the quote but I left it out because it was already pretty long.

"If you want to reduce economic inequality instead of just improving the overall standard of living, it's not enough just to raise up the poor. What if one of your newly minted engineers gets ambitious and goes on to become another Bill Gates? Economic inequality will be as bad as ever."

So what is the more important goal to raise the overall standard of living or reduce economic inequality?

[btown]

I should have been more clear about this. I read the full article, and if I though that "But the overall standard of living will be raised unilaterally for all individuals" was a sufficient answer to my issues with PG's piece, I wouldn't have written a reply!

I think there's tremendous value in preventing our society from dividing into two spheres so far away from each other that merit-based mobility is practically nonexistent - a world of "haves" and "have-nots." Because if you do split society that way, then even if the "have-nots" are arguably at a higher standard of living than today's working class, they're still not in a place where they can contribute innovative ideas to the cutting edge of technology - which requires the "luxurious" education that the "haves" have. And I'm arguing on the basis that it's short-sighted to dismiss the innovative ideas that could arise from the "have-nots."