Is income inequality unjust, and if so, where is the injustice?

[TommiR]

An injustice occurs when the person(s) reaping the most benefit fail to adequately compensate the ones doing the majority of the work. And yes, I realize that "adequately compensate" is open to some debate. I've already said quite a bit over in another thread about much the same issue (especially as regards the gulf between the "mean" and "median" wages), and I still stand by the dozens of sentences I spewed there.

I think there is such a transfer of wealth from the elite to the working classes. I believe it's called 'wages', and it happens every month or so.

I assure you that the heat death of the universe will not spare the biologically immortal.

I'm sure it will comfort the less fortunate to know that those more fortunater will get their come-uppance eventually... even if it should take some billions of years.

Is it impossible to help the slow run faster, though? I would argue charity (weather through investment of funds, or generosity of time/energy) does not necessarily slow down the volunteer, and can bring the lagging up to pace, or at least improve their position.

Some schools of thought think that charity is a form of a security net for the upper classes. When it comes to social upheaval and civil uprisings, an ounce of prevention is worth a pound of cure.

 

[Krisken]

I think there is such a transfer of wealth from the elite to the working classes. I believe it's called 'wages', and it happens every month or so.

That's the rub though, isn't it? It's not nearly as much as they are getting from the working class through their hard work. If it was, there wouldn't be increases in the percentage of wealth earned by the wealthy and the poor.

 

[TommiR]

That's the rub though, isn't it? It's not nearly as much as they are getting from the working class through their hard work. If it was, there wouldn't be increases in the percentage of wealth earned by the wealthy and the poor.

What mechanism would you suggest to determine the proper amount of wages, if not the market? They're getting as much as their bargaining position entitles them to, according to the law of supply and demand. If they were in a position to demand for more, they'd get it.

 

[Chad Sexington]

I'm sure it will comfort the less fortunate to know that those more fortunater will get their come-uppance eventually... even if it should take some billions of years.

I wasn't endeavouring to provide solace to the hypothetically less fortunate, or imply that the more fortunate 'deserve' any particular fate; you seemed to misunderstand Gas_Bandit's statement that heat death would equalise us all, by suggesting some kind of immortality mechanism would evade that while others still died. I was just saying that immortal or not, heat death of the universe would indeed equalise us all, regardless of any factor.

Some schools of thought think that charity is a form of a security net for the upper classes. When it comes to social upheaval and civil uprisings, an ounce of prevention is worth a pound of cure.

Well I am inclined to disagree with those schools, I suppose.

 

[Krisken]

What mechanism would you suggest to determine the proper amount of wages, if not the market? They're getting as much as their bargaining position entitles them to, according to the law of supply and demand. If they were in a position to demand for more, they'd get it.

The market isn't a perfect mechanism. It's the reason capitalism on its own isn't a good system and requires checks and balances from other systems to keep it honest.

I don't pretend to have the best system, Tommi, but even I can see the wage disparity over the years and realize the have's are taking more and giving less. If it keeps up, the market won't make the correction, the riots will.

 

[PatrThom]

I think there is such a transfer of wealth from the elite to the working classes. I believe it's called 'wages', and it happens every month or so.

They're getting as much as their bargaining position entitles them to, according to the law of supply and demand. If they were in a position to demand for more, they'd get it.

The forces of market capitalism exert a downward pressure on wages. As more wealth is controlled by the upper classes, the more of a scarcity of wealth (a vacuum) exists in the lower classes, and therefore the greater demand from those lower classes. This means that, as wealth is conveyed upwards, that scarcity lowers the lower classes' breakpoint, and makes those lower classes more willing (desperate, really) to work for lower and lower wages, just because they want to have any sort of wages at all. They are therefore in no position to really demand anything, and, as time goes on, what demands they could make become less and less, until you literally* get workers who are willing to work at (or below!) subsistence level...and beyond (i.e., slavery).

--Patrick
*yes, literally literally.

 

[GasBandit]

Wealth is not a finite quanta. Economics is not a zero sum game.

 

[PatrThom]

Wealth is not a finite quanta. Economics is not a zero sum game.

100% correct, but not really relevant so far as it concerns "injustice."
Even with infinite supply, a segment of the population will still "die" (economically) if their share of the (infinite) stream is so thin that it is insufficient to meet their needs.

--Patrick

 

[GasBandit]

100% correct, but not really relevant so far as it concerns "injustice."

--Patrick

It would have had to be finite for what you said to be the case. Remember, we're still in the worst economic slump in almost 100 years. Prior to 2008, unemployment was low and wages were higher, and the US was experiencing the greatest economic mobility in recorded history. Five plus years of "batten down the hatches" has made for a very different landscape these days, full of employment desperation and despair as you describe it. However, this is not due to the failings of actual capitalism but rather the quasifascist ubergovernment "crony capitalism" and drenched in class-war rhetoric we've been enduring that never had a hope of actually providing for economic recovery. The charlatans who put us in the ditch are still strapped in the driver's seat, haven't learned anything, and neither have the rest of us apparently because we keep electing them.

Let me know when we're doing the pitchforks and torches things, I've had mine ready for years.

 

[PatrThom]

It would have had to be finite for what you said to be the case.

I did amend my comment while you were replying to address that. In Minecraft terms, even if everyone has access to an infinite cobblestone generator, if I rig the game so I'm the only one who gets to use anything better than a wooden pickaxe, then I'm going to have an unfair advantage (this example is imperfect, because there is nothing in Minecraft representing expenditures, i.e., nothing that says you have to pay 1000 cobblestone an hour in order to stay alive or something...though that would be an interesting mod).

--Patrick

 

[Bubble181]

What mechanism would you suggest to determine the proper amount of wages, if not the market? They're getting as much as their bargaining position entitles them to, according to the law of supply and demand. If they were in a position to demand for more, they'd get it.

You do realise that you're actively arguing in favor of a worker's uprising and revolution for the laborers to "take back" their share of the wealth, right? In a completely free market, that's their right too. The market will force prices down until they're untenable and the workers will have to use "their bargaining position" - i.e. "there's plenty of us and we can stop your plants and you can't shoot us all".
Of course, completely unrestricted capitalism can't work and isn't civilized. It's anarchy. Also, any "coronyism" Gas wants to complain about fettering the market and keeping it down, is a direct result of that same market. Complete freedom means freedom to protect your own gains, and thus, lobbying. The free market without any protections from the state will inevitably lead to tyranny of the richest/most powerful.

 

[Necronic]

My only problem with the wealth gap is that extreme wealth is a self sustaining thing, and often through dishonest means

 

[AshburnerX]

My only problem with the wealth gap is that extreme wealth is a self sustaining thing, and often through dishonest means

... which is especially frustrating when extreme wealth often enables someone to completely avoid the consequences of their actions, whether it be through bribery, escape, threats of violence, or plain old extortion.

 

[Necronic]

Its a tricky thing though, because its not always like that. Lots of wealthy people are wealthy because they work insanely hard. Like, hard enough that the ideo of screwing around playing video games is completely alien. And I get that, and I'm ok with that. Those people help make the world run. What kills me though is the lobbying for quasi legal tax loopholes and the use of other esoteric tricks.

 

[@Li3n]

Wealth is not a finite quanta. Economics is not a zero sum game.

Resources will always be limited, while needs will always be unlimited, so it really is, at any given time, a zero sum game, even if there's growth overall.

The way it works actually means that there will never be anything but a small minority that is rich, and the majority that isn't (and do remember that the middle class is a historical aberration). Even if you gave everyone more money, it would just devalue money etc.

I mean you basically admit you know that a few posts back when you said the only way to even things out is to make everyone miserable.

What mechanism would you suggest to determine the proper amount of wages, if not the market? They're getting as much as their bargaining position entitles them to, according to the law of supply and demand. If they were in a position to demand for more, they'd get it.

Which is why wages went way up after the Black Death, the market adjusted to the sudden drop in supply of labour, while demand for it was high.


I always wondered, do you guys really think of the market as fair (which it isn't even when both parties are totally aware of everything, both having the same amount of power in the exchange is a rare thing, if it happens at all), or is just that it's easier to use it as an excuse because it's not something anyone can be blamed for (like nature)?[DOUBLEPOST=1390491133,1390491009][/DOUBLEPOST]

"there's plenty of us and we can stop your plants and you can't shoot us all".

Ah, but dont have to shoot you all, just a few to make an example. Also, because there's plenty of you i can just replace you with new people... it's your own fault for not using birth control...[DOUBLEPOST=1390491243][/DOUBLEPOST]

That's the rub though, isn't it? It's not nearly as much as they are getting from the working class through their hard work. If it was, there wouldn't be increases in the percentage of wealth earned by the wealthy and the poor.

Well, to be fair, you can't pay them exactly what you get from their work, as then there would be no profit, and you'd be penniless.[DOUBLEPOST=1390491399][/DOUBLEPOST]

I think there is such a transfer of wealth from the elite to the working classes. I believe it's called 'wages', and it happens every month or so.

Hahahahahaha... yeah, they're transferring their wealth to you in exchange for you making them more wealth through your labour...

 

[GasBandit]

Resources will always be limited, while needs will always be unlimited, so it really is, at any given time, a zero sum game, even if there's growth overall.

The way it works actually means that there will never be anything but a small minority that is rich, and the majority that isn't (and do remember that the middle class is a historical aberration). Even if you gave everyone more money, it would just devalue money etc.

I mean you basically admit you know that a few posts back when you said the only way to even things out is to make everyone miserable.

Yes, that's what I said, but when I said it's not a zero sum game, what I meant is that for someone to get rich it does not require making someone else poor, and it is possible to move from poor to rich (income mobility) without making a rich man poor to "even it out."

But you're right, we agree that there will always be rich people and poor people, in any given system, because even in a socialist society somebody's deciding where those resources go, and makes sure they get the nicest dacha.

 

[@Li3n]

Yes, that's what I said, but when I said it's not a zero sum game, what I meant is that for someone to get rich it does not require making someone else poor, and it is possible to move from poor to rich (income mobility) without making a rich man poor to "even it out."

Well of course not, because it's not that simplistic, but it does require resources to be moved from something/where to the new rich guy (unless he actually creates a new resource, and even then you remove some wealth from somewhere to invest into the new thing). But it's almost never just from one other person (unless you owned a monopoly on horse whips around the time the model T came out, but i digress), and it's usually spread out enough that you hardly notice (barring extreme cases).

But you're right, we agree that there will always be rich people and poor people, in any given system, because even in a socialist society somebody's deciding where those resources go, and makes sure they get the nicest dacha.

Wait, we're still pretending the russian where socialists? They where about as socialist as they are capitalist now... maybe when the Vulcans come and we start the Federation they'll finally stop being an oligarchy, but until then they'll always be the same.

But, going by the example provided, i'd say that, even if some get better dacha, it would still nice that everyone has a dacha... there is something to be said about the difference between the rich and poor not being as great as atm. I mean you might say that's it's infeasible, but i say if we're not going to at least try, then what's the point of being here anyway?

 

[GasBandit]

Well of course not, because it's not that simplistic, but it does require resources to be moved from something/where to the new rich guy (unless he actually creates a new resource, and even then you remove some wealth from somewhere to invest into the new thing). But it's almost never just from one other person (unless you owned a monopoly on horse whips around the time the model T came out, but i digress), and it's usually spread out enough that you hardly notice (barring extreme cases).

The thing is, there's a growing percentage of the American populace, whipped into a frenzy by the democrats, that demonizes wealth because "there's obviously no way to get rich legitimately. If you're rich it's because you stole from someone or exploited someone or rode on the backs of others." These were the people cheering at the Obama speech when he was decrying wealthy businesses, saying they didn't get rich because they were smart or hard working "because there's a lot of smart and hard working people who aren't rich" so it obviously only came to them on the backs of the poor (and of course because the government was there to build the street their building was on), and now it's time for them to "pay their fair share," despite the fact that the top half of the country is already paying all the taxes, and the top 10% are paying 70% of that.

So I did feel it needed to be pointed out.

Wait, we're still pretending the russian where socialists?

It's what they presented/purported to be, even though they obviously weren't. It's what kept the average Vlad in the street from rising up - they had him convinced someone up top was making sure everything got split fairly when clearly it wasn't. I heard someone say something recently that seems appropriate - In a capitalism, the rich become the powerful, and in socialism, the powerful become the rich. No matter what you try to do, there will always be rich, and there will always be poor.

 

[Necronic]

The thing is, there's a growing percentage of the American populace, whipped into a frenzy by the democrats, that demonizes wealth because "there's obviously no way to get rich legitimately. If you're rich it's because you stole from someone or exploited someone or rode on the backs of others." These were the people cheering at the Obama speech when he was decrying wealthy businesses, saying they didn't get rich because they were smart or hard working "because there's a lot of smart and hard working people who aren't rich" so it obviously only came to them on the backs of the poor (and of course because the government was there to build the street their building was on), and now it's time for them to "pay their fair share," despite the fact that the top half of the country is already paying all the taxes, and the top 10% are paying 70% of that.

So I did feel it needed to be pointed out.

People wouldnt feel like the rich were dishonest if they stopped doing dishonest things like dodging taxes, or getting away with murder due to "affluenza". I don't agree with increasing taxes on the rich, and I do agree that many wealthy people got there legitimately (and those people do make the world turn), but I also understand where everyone elses frustration comes from. I mean hell, read GSElevator for a week and, after you've had a healthy chuckle, realize what complete scum some of these people are.

 

[@Li3n]

The thing is, there's a growing percentage of the American populace, whipped into a frenzy by the democrats, that demonizes wealth because "there's obviously no way to get rich legitimately. If you're rich it's because you stole from someone or exploited someone or rode on the backs of others."

As opposed to the other extreme, where you got rich all alone, with no help from anyone or anything, it was just you and and empty piece of land... could we please stay away from strawmen, my crows are getting spooked.

These were the people cheering at the Obama speech when he was decrying wealthy businesses, saying they didn't get rich because they were smart or hard working "because there's a lot of smart and hard working people who aren't rich" so it obviously only came to them on the backs of the poor (and of course because the government was there to build the street their building was on), and now it's time for them to "pay their fair share,"

Well, while i'm not going to assume everyone actually understands why that is true, it isn't false. Even the most fair and hard working rich guy still needed other people to work for him (unless he's a Tesla, but those guys never stay rich, they suck at money)...

despite the fact that the top half of the country is already paying all the taxes, and the top 10% are paying 70% of that.

While owning more then 70% of wealth, if i recall right...


C'mon Gas, you can do better, if you couldn't your 8th grade math teacher wouldn't have passed you (or do you guys learn about those things in highschool, i recall seeing a lot of american shows about highschool where the math was way too simple compared to what we learned over here, no offence meant, i was just wondering if they where accurate, or just one of those things show do because no sne cares?).

It's what kept the average Vlad in the street from rising up - they had him convinced someone up top was making sure everything got split fairly when clearly it wasn't.

Heh... nope, it was the secret police and the fact that they all feared their neighbour was going to rat them out... or at least that's what the people that lived through communism tell me.[DOUBLEPOST=1390495327,1390494836][/DOUBLEPOST]

People wouldnt feel like the rich were dishonest if they stopped doing dishonest things like dodging taxes, or getting away with murder due to "affluenza". I don't agree with increasing taxes on the rich, and I do agree that many wealthy people got there legitimately (and those people do make the world turn), but I also understand where everyone elses frustration comes from. I mean hell, read GSElevator for a week and, after you've had a healthy chuckle, realize what complete scum some of these people are.

Yeah, but highest income mobility (before the crisis, which was caused by people doing dodgy things for moar money) and all that jazz.

 

[Necronic]

Finance guys are what bother me the most. You invent something? Put together a good store/restaurant? Have a good business idea and make it work? Kudos for you. You got rich and made the world a better place. Finance though....man, I would like to hear how derivatives and credit default swaps made the world a better place. They make money by obfuscating value and stealing it when no one is looking.

 

[GasBandit]

As opposed to the other extreme, where you got rich all alone, with no help from anyone or anything, it was just you and and empty piece of land... could we please stay away from strawmen, my crows are getting spooked.

I wasn't saying this was YOU, I was addressing it because it's part of the debate on this topic that can't be ignored.

Well, while i'm not going to assume everyone actually understands why that is true, it isn't false. Even the most fair and hard working rich guy still needed other people to work for him (unless he's a Tesla, but those guys never stay rich, they suck at money)...

And they paid those people accordingly. They weren't slave labor.

While owning more then 70% of wealth, if i recall right...

There you go again, treating wealth as a zero sum quanta. Yes, the top half is significantly wealthier than the bottom (though the number is different), but that isn't wealth taken away from the bottom half.

C'mon Gas, you can do better, if you couldn't your 8th grade math teacher wouldn't have passed you (or do you guys learn about those things in highschool, i recall seeing a lot of american shows about highschool where the math was way too simple compared to what we learned over here, no offence meant, i was just wondering if they where accurate, or just one of those things show do because no sne cares?).

And here I thought we could have a reasonable discussion. I guess I forgot who I was talking to.

Heh... nope, it was the secret police and the fact that they all feared their neighbour was going to rat them out... or at least that's what the people that lived through communism tell me.

Certainly, once the cat was out of the bag and the honeymoon was over, but you can bet in 1917 they didn't sit in their committees saying "how can we make the most unfair, oppressive regime ever imagined in post industrial times?" The idea was sold as socialism, and became what all such attempts become.

Yeah, but highest income mobility (before the crisis, which was caused by people doing dodgy things for moar money) and all that jazz.

Actually, no, prior to the economic crash, the US had the highest income mobility and most new millionaires per year than anywhere in recorded history.

 

[Necronic]

There you go again, treating wealth as a zero sum quanta. Yes, the top half is significantly wealthier than the bottom (though the number is different), but that isn't wealth taken away from the bottom half.

This is true in a lot of cases (like starting a novel business), but if we're talking about stocks, commodities, or derivatives (where a lot of the rich come from) it more or less IS a zero sum game. If you make money on a stock its because the person that sold it to you lost money on it, or, lost oppurtunity cost.

 

[GasBandit]

This is true in a lot of cases (like starting a novel business), but if we're talking about stocks, commodities, or derivatives (where a lot of the rich come from) it more or less IS a zero sum game. If you make money on a stock its because the person that sold it to you lost money on it, or, lost oppurtunity cost.

That is a voluntary transaction made because both parties believe they will make money - the buyer of the stock believes it will increase in value, the seller believes it won't and would rather have money than the stock.

Nobody is forced to buy stock, or sell stock. All stock trades are mutual and agreed. And even if someone does lose their pants in the stock market, nobody took that money from them, and being wrong about an investment isn't the same as someone else "getting rich off of you." Assuming there wasn't fraud involved, which is a crime, of course.

 

[Necronic]

I totally agree, I'm just saying that it is (sort of) a zero sum game. The indexes over all increase in value over time, but high velocity trading is more or less zero sum

ed: Same with real estate. Values change over time, but there is a finite supply. Someone buys an acre. someone loses an acre. Zero sum.

ed2: And a good example of the latter in wealth inequality is in Gentrification.

 

[GasBandit]

I totally agree, I'm just saying that it is (sort of) a zero sum game. The indexes over all increase in value over time, but high velocity trading is more or less zero sum

ed: Same with real estate. Values change over time, but there is a finite supply. Someone buys an acre. someone loses an acre. Zero sum.

ed2: And a good example of the latter in wealth inequality is in Gentrification.

I don't agree with either the stock or the real estate examples. Both are exchanging money, which has value, for property, which has value, at what both consider to be the value of the property in question at that time. Yes, there is a finite amount of land, but that is not the only measure of wealth, and the land was sold for its worth in currency.

The biggest example of this is the constant barrage of "Quantitative Easing" we've been undergoing for years now, with the Fed creating and injecting $40 billion of fiat currency per month out of thin air (or thin hard drive data, to be more accurate) and sticking it into the economy to keep interest rates down. Not to say I agree with this practice, as it can't help but lead to inflation later on which will hurt everyone (but naturally it will hurt the poor most, who don't have much wealth and most of what they have is liquid).

The big problem right now comes from those who have more wealth are not spending it. They're not hiring, they're not buying, they're squirreling it away because they're scared of what's going to happen as we keep going down this self destructive course. The strength of an economy is not its total wealth but in the rate at which that wealth moves around - and right now it's not moving. Which is why all the wealth envy is starting to bubble over.

 

[Necronic]

Actually Quantitative easing may not lead to inflation simply because that system ISN'T a zero sum game. If the money supply increases at the same rate as the "asset-value" of the country then you won't see inflation as the ratio of $/assets is unchanged. Not saying it wont cause inflation, because if you do it too fast then it will, just explaining why the statement "it can't help but lead to inflation" is wrong.

 

[strawman]

Finance guys are what bother me the most.

To be fair, the vast majority of what they do is move money to where it will do the most good. A car needs oil, but if the oil is in a can in the back it isn't going to do the engine any good.

Now some small portion of what they do probably doesn't benefit society, but the vast majority of what they do performs a necessary function in our society. We simply would not be able to function without these people essentially greasing the financial wheels so the money moves around efficiently.

 

[Necronic]

I was talking to someone who said that all the different careers can be seen as organs in the body, and Finance is the blood, as it moves the resources around. Ideally this is true, and it's true for a lot of finance guys. But there are also the "Lukemia" finance people, who grow uncontrolled at the expense of the organs they feed. There's nothing new here, this has been happening since pre-biblical days (the "money lenders"). The years of regulation have stopped the more obvious versions of it, but, just like the Cancerous cells they imitate, there is no real elimination of them regardless of the scorched earth regulatory chemo we throw at them.

One thing that bothers me the most about them is how the whole "regulation" argument has gotten confused because of them. People get mad at the government for the regulations that come out to stop these practices, and people blame the government for the regulations. While these regulations have significant collateral damage, they exist only because there are scumbags out there who only understand ethics in terms of legality. They have to be told that stealing candy from a baby is actually wrong. These people are the problem, not the government trying to reign them in.

These people flat out disgust me. I'm having someone over this weekend like this. He is an ex-hedge fund manager that found a way to buy ghetto section 9 housing and run it as a slumlord (no repairs/oversight) while getting guaranteed rent from the government, turning a massive profit. He told me this with a smile in the same conversation he whinged about too much governmetn regulation. I wanted to hit him. I am not looking forward to spending more time with this scumbag.

 

[GasBandit]

... why are you then?

 

[Necronic]

Boyfriend of my girlfriend's coworker. So I have to be nice.

Want to know the really great part? He's 45. She is 23.

 

[GasBandit]

Boyfriend of my girlfriend's coworker. So I have to be nice.

Want to know the really great part? He's 45. She is 23.

Not to turn this into a relationships thread, but... can't you tell your girlfriend you hate her coworker's boyfriend and are more likely to stab him the longer you are put in close proximity?

 

[Bowielee]

Somewhat related, we're about to see the last bastion of ACTUAL free market capitalism disappear with the repeal of Net Neutrality. It truely was the last bastion of small businesses, and when service providers can restrict any new online business' access, that all goes away.

Oligopolies for the lose.

I think one of the biggest problems is that we've been conditioned to bark at all these strawman arguments with social issues while collusion is the biggest threat to both sides.

 

[GasBandit]

Somewhat related, we're about to see the last bastion of ACTUAL free market capitalism disappear with the repeal of Net Neutrality. It truely was the last bastion of small businesses, and when service providers can restrict any new online business' access, that all goes away.

Oligopolies for the lose.

I think one of the biggest problems is that we've been conditioned to bark at all these strawman arguments with social issues while collusion is the biggest threat to both sides.

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation always ends in a conspiracy against the public.” - Adam Smith

 

[Bowielee]

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation always ends in a conspiracy against the public.” - Adam Smith

If you don't think net neutrality being abolished won't effect the independent business market on the internet, you're wearing blinders.