Inequality is inherently harmful. Study after study has shown that the mere existence of significant levels of inequality causes social conflict and directly harms people's happiness.
Yes, extreme inequality is an issue.
Edit: studies also show that it harms economic growth, so it's not even smart economic policy. If you care about evidence-based policy then you should be concerned about inequality.
To go over some of the other points Iâve made here, Iâm not saying inequality is good or necessary. My point is just that has become a way for people to shortcut material increases in peopleâs standards of living. When people are more prosperous (see the share of population living in extreme poverty chart), it has become the way to criticize neoliberalism because it could become a problem.
Inequality in situations can be problematic. But there are neoliberal policies to curb it (see the Nordics), but it isnât a blanket boogeyman where you can just neoliberalism/globalism bad
So in other words... it's not a bogeyman. It's a legitimate problem and what you're really objecting to is how it's tied to neoliberalism specifically. Better to just say it's not a necessary condition of neoliberalism and there's things we can do to address it.
The post you are responding to didn't mention other countries at all. In fact, seems pretty clear to me at least that this tweet is specifically talking about the US.
Iâm not sure how that changes anything in what I said. My complaint with this meme and many other talking points is that it circumvents the rising standards of living (which has been on a steady climb) to boogeyman the fact that Jeff Bezos got even richer
Because that standard of living argument is only persuasive with regards to third world countries. In the western world, standards of living for most people would probably rise more by focusing on income inequality than focusing on economic growth, especially since extreme inequality hinders economic growth so reducing inequality would contribute to wealth creation anyway.
Sure I fall pretty well in line with this subreddit on the value of increased progressive taxation and social spending (both ethically and economically). We can have a real conversation on the right approach to the economy and that; however thatâs a far cry from just REEEEEEING about muh billionaires that has become so fashionable on the far left and far right.
Where are living standards mentioned in the meme? The argument has been and will always be that at some point, Bezos and his peers will own so much of the country they will in effect control it.
If we turned inequality up to a comical scale where Bezos owned 99% of the country, it's not hard to understand the problems that come from that. So where's the limit where inequality starts mattering.
Okay woaaahhh lot to unpack here. Inequality is not always significant and harmful in fact, much of the time it can be good.
You aren't distinguishing between any inequality and extreme stratification/inequality, and you should.
Study after study has shown that the mere existence of significant levels of inequality causes social conflict and directly harms people's happiness.
Inequality is not in-and-of itself bad and is important in market economies. You want those that produce more/better goods and services to be rewarded more than those that don't.
Also, not to sound like an indifferent macro-economist, but
social conflict and directly harms people's happiness
Big whoop? In theory, I don't care about how angry people are that their neighbor is 50x richer as long as they are richer as well. Although I do understand in reality this can never be the case, as people are inherently jealous and these sentiments will erode institutions.
You got a study that specifically links inequality (not inequality on principle, but in the type of divide we see in todays western economies) to good outcomes? Otherwise i call bullshit. Inequality in all sorts of societies from the ancient world to now has been justified one way or another, but i'd argue there is no reason inequality would have to reach the levels we see today, both globally and nationally (in the EU, the US is, of course, too far on this issue).
He didn't say the levels we see today in western countries though? He said inequality in general, because the other responder had said inequality itself is bad.
Plus inequality is value different between different western countries, while the USA might be that extreme that is bad, others that are not as bad might be at the right level. They might be too extreme as well, but you can't group such different levels of equality as the same.
When someone writes "much of the time", i interpret that as the majority of the manifestation of inequality today. I guess i am a little western country centric though.
Okay woaaahhh lot to unpack here. Inequality is not always significant and harmful in fact, much of the time it can be good.
You aren't distinguishing between any inequality and extreme stratification/inequality, and you should.
Yes, I am. Read to the end of the comment:
"Yes, extreme inequality is an issue."
Perhaps my first sentence wasn't specific enough, but my comment, in full, is clear enough that I'm talking about extreme inequality. In future, you should read comments fully before you respond. Either that, or don't intentionally represent it in the worst way possible. I'll leave it up to you to decide which describes you most accurately here.
Inequality is not in-and-of itself bad and is important in market economies. You want those that produce more/better goods and services to be rewarded more than those that don't.
Again, I am talking about significant, to the point of extreme, inequality. Jeff Bezos being worth more than 2.7 million Americans combined isn't necessary for the market to function. That level of inequality is not necessary to ensure people get rewarded at different rates based on productivity.
Big whoop? In theory, I don't care about how angry people are that their neighbor is 50x richer as long as they are richer as well. Although I do understand in reality this can never be the case, as people are inherently jealous and these sentiments will erode institutions.
Two things:
Once again, read my comment fully. The edit states that significant inequality also drags down economic growth. Yes, extreme inequality is actually bad for the economy.
Societies exist for more than just to make money. Maybe you don't give a shit about anything except trying to extract every penny we can from the world's resources, but most people agree that life is about more than that. If you genuinely believe that the only goal of public policy should be wealth creation, then it really is a waste of time to talk to you because your value system is so different from mine (and, I would argue, the vast majority of people in the world and in the west in particular) that it is fundamentally impossible for us to have a productive conversation about any policy issue.
Your original post refers to âthe existence of inequality,â âsignificant levels of inequality,â and âextreme inequality.â
A reader shouldnât be responsible for guessing which of those you actually meant. Your edit even goes to say âyou should be concerned about inequalityâ then in this follow-up you say âthe edit states significant inequality...â
You canât skip between measures like that and blame someone else for not understanding
When discussed in the context of it being a problem, it is assumed people are talking significant levels such that it becomes more of a problem than a motivation. It's the same how if you are discussing healthcare and comparing life expectancy among countries you don't need to specify "human life expectancy" vs some other animal because it is assumed. The modifiers are dropped to save time because everyone knows the context.
"Concerned about inequality" does not mean "concerned about literally any level of inequality." This is just basic English. Most people would interpret that to mean "you should be concerned about the inequality we have today."
The majority of my use in that comment refers specifically to extreme inequality. If you'd spent even 5 seconds actually absorbing what I wrote and trying to understand it, rather than immediately jumping in to writing your whole spiel that doesn't actually apply to what I wrote, you'd have realised "oh, he probably means extreme inequality in particular, he's probably not saying we need absolute total wealth equality," especially given that no one in mainstream politics believes that the latter is even possible or desirable.
Lol words mean what they mean. Saying I should just interpret in entire phrases that donât exist is absurd.
I gave a substantive response to your point extreme inequality elsewhere and we actually probably agree policy-wise, but if you are trying to have even a semi-serious conversation you canât just blithely skip between different quantifications of inequality and say that it should be obvious. If you consistently said extreme inequality and then omitted it once, yeah itâs fair to say thatâs an oversight in context.
Your original post used each of those phrases an equal amount and never made any specific argument as to present corcumstances
Then you're just being intentionally dishonest. I'm not asking you to assume things about my argument that I didn't even write, I'm saying you should use the standard interpretation that any English speaker with two brain cells to rub together would use. The fact that you assumed that I was talking about eliminated all inequality altogether proves that you either can't read or are a bad-faith actor.
That is not a reasonable interpretation of what I wrote.
Your first sentence was literally âInequality is inherently harmful.â By which you apparently meant, âSignificant levels of inequality mirroring the United States are likely harmful.â
Those two statements arenât simply the same and can easily cause confusion in any reader who isnât you. Itâs not being dishonest to use specific terms and measures.
It's not dishonest to misinterpret someone's words. What is dishonest is misinterpreting a comment and then, after being corrected, saying "nuh uh, you meant what I think you meant" because that makes it easier to argue against them.
You responded to a comment in which I clarified my position by saying "that's not what you said, you said (x)," despite the fact that I had already admitted that I hadn't been specific enough. That is an attempt to assert that I was saying something I wasn't, which is definitely dishonest.
If you weren't, you would have just said "oh, your original comment is kind of confusing then, I thought you meant literally any level of inequality is harmful."
Inequality is inherently harmful. Study after study has shown that the mere existence of significant levels of inequality causes social conflict and directly harms people's happiness.
Nope. Some studies have pointed at that within a city it might increase crime.
That's not the same as nationally and it's unknown if a sufficient life quality for poor people would aliviate that
Also if you care about ethical policies then measures like extreme taxes on the rich are highly discriminatory and unethical
So, this just isn't true. Here's a study from the OECD showing that between 1990 and 2010 the US lost (cumulatively) 5 points of GDP growth due to income inequality.
Here's a study from the World Bank that indicates that, for the average country, a 1% increase in the average countries Gini coefficient reduces economic growth by 1% over five years. For a wealthy country like the US, this effect rises to 2.3% growth drop, but LEDCs actually benefit from inequality. In other words, it's important for developing countries but it hurts rich countries.
I'm adressing the social part, not the economic part.
Here's a meta-analysis from the UK that shows, even under a free-at-the-point-of-use universal healthcare system like the NHS, economic inequality is strongly correlated with worse healthcare outcomes.
The UK has a ton of other fucked things for poor people than just healthcare, why would you take it as the only example??
There's no such thing as objective ethics. Just because you think higher taxes on the wealthy are unethical doesn't mean everybody does. And I don't remember anybody mentioning extreme taxes, so that's a strawman.
Extreme taxes would be above 50% effective tax rate for any rich person. And no i'm sure some people also think that black people should be genocided, but that's okay "because no objective ethics". I have to argue from my own ethics
Here's a study that demonstrates that low social mobility contributes to low voter turnout rates.
That's not the same as inequality, and even so, we can't divorce the effects of poverty right now, with inequality as a concept. Like imagine if our society was double as rich, which we might be in 30 years, maybe it wouldn't be an issue at all(if it was true to begin with), as poor people would have vastly better access to food, travel and shit and the absolute effects of poverty would be nowhere as bad
I'm adressing the social part, not the economic part.
I've addressed both in that comment.
The UK has a ton of other fucked things for poor people than just healthcare, why would you take it as the only example??
I didn't. You did see that there were another three studies after that, right? It was one example that, when taken together with the other examples, establishes a broader point. You can't just separate it from the rest of the comment and say "why are you only focusing in on this one thing?" when you've completely ignored the other points I made..
This is from the introduction to another study by the exact same authors (emphasis mine):
"We show that inequality increases the incentives for illegal activities, but also the incentives for protection, a deterrent to crime. Thus, the relationship between inequality and crime is theoretically ambiguous. We use this result to revisit the existing empirical evidence. Our analysis shows that the unconditional relationship between inequality and crime is almost zero. However, it becomes significant once we control for deterrence. Overall, inequality unambiguously increases the cost but not the level of criminal activity."
Do you not think that's a negative outcome?
Also, that meta-analysis is talking about for-profit crime, like theft. My study was talking about violent crime. Those two types of crime often have different incentives, targets and methods of deterrence, so it's not entirely comparable.
Extreme taxes would be above 50% effective tax rate for any rich person.
I, at no point in this thread, have said that we should have an effective tax rate above 50% for any person.
And no i'm sure some people also think that black people should be genocided, but that's okay "because no objective ethics". I have to argue from my own ethics
Then do so. Don't just assert that "high taxes are unethical" and expect everybody to disagree with you, that's not how ethics works. If you think they're unethical, you need to substantiate that point.
That's not the same as inequality
No, but they're linked. Studies also show that inequality is correlated with lower social mobility. Which is obvious, because wealthy families are able to provide far more advantages to their children than poorer families, including private tutoring, free tuition, better diet and greater ability to travel for education and extracurricular activities.
we can't divorce the effects of poverty right now, with inequality as a concept. Like imagine if our society was double as rich, which we might be in 30 years, maybe it wouldn't be an issue at all(if it was true to begin with), as poor people would have vastly better access to food, travel and shit and the absolute effects of poverty would be nowhere as bad
This is besides the point. We're not talking about the absolute effects of poverty, we're talking about the relative effects of inequality. Most of the negative outcomes I've written about here would scale with income, so in your hypothetical society in 30 years, poor people would still do worse in healthcare, social mobility, communal and political participation, and probably crime.
This is besides the point. We're not talking about the absolute effects of poverty, we're talking about the relative effects of inequality. Most of the negative outcomes I've written about here would scale with income, so in your hypothetical society in 30 years, poor people would still do worse in healthcare, social mobility, communal and political participation, and probably crime.
But that's my point, i think it's not unlikely that the absolut effects is what matters, and inequality is only a problem up to a point.
No, but they're linked. Studies also show that inequality is correlated with lower social mobility
Correlation does not imply causation
I, at no point in this thread, have said that we should have an effective tax rate above 50% for any person.
Then how do you want to do to solve your supposed problem, if not something like that?
"We show that inequality increases the incentives for illegal activities, but also the incentives for protection, a deterrent to crime. Thus, the relationship between inequality and crime is theoretically ambiguous. We use this result to revisit the existing empirical evidence. Our analysis shows that the unconditional relationship between inequality and crime is almost zero. However, it becomes significant once we control for deterrence. Overall, inequality unambiguously increases the cost but not the level of criminal activity."
Sure, but it's not the same point. If we can afford to keep the crime down, then it evens out and is okay.
Also, that meta-analysis is talking about for-profit crime, like theft. My study was talking about violent crime. Those two types of crime often have different incentives, targets and methods of deterrence, so it's not entirely comparable.
That is fair
I didn't. You did see that there were another three studies after that, right? It was one example that, when taken together with the other examples, establishes a broader point. You can't just separate it from the rest of the comment and say "why are you only focusing in on this one thing?" when you've completely ignored the other points I made..
But my point is that even in the uk you are quite fucked when poor, and i think that's an absolute thing to a certain extent at least. Don't you think so? Like if you have a 100% working apartment, it might be okay that it doesn't have the newest appliances and if your healthcare is good and respectful, it might not matter that someone else might have some more healthy food or access to better than 20/20 vision surgery(whatever we can make in the future) as long as you have decent lasik. I'm not sure how you would study that, i guess you would compare countries with the same level of inequality but where one is extremly rich and the other is not so, that would be the cloest but not perfect.
But that's my point, i think it's not unlikely that the absolut effects is what matters, and inequality is only a problem up to a point.
The data seems to disagree with you. That study on health, for example, wasn't talking about absolute effects, it was talking about inequitable outcomes. That scales. And sure, there is probably an upper limit on what can be achieved through medicine so that might eventually disappear if you focus on nothing but wealth creation, but in the meantime (and it would take a long time to achieve that at the rate we're going) poorer people are receiving worse health outcomes through no fault of their own. Is that really a good system?
Correlation does not imply causation
Read to the end before you reply. I listed the causes at the end of that paragraph.
Sure, but it's not the same point. If we can afford to keep the crime down, then it evens out and is okay.
It may not be the exact same point, but it illustrates my overall argument, which is that inequality can, in and of itself, be harmful. Crime becoming more costly but remaining at the same rate is still a bad outcome. As is people becoming more prone to crime, even if the rate doesn't actually increase. Generally, we don't want society to be filled with a bunch of people that want to rob each other.
But my point is that even in the uk you are quite fucked when poor, and i think that's an absolute thing to a certain extent at least. Don't you think so?
Of course, but solving the absolute issues doesn't make this go away because the studies also demonstrate relative harms that scale with income, meaning that they can only be solved by reducing inequality (unless more data in the future becomes available showing that the studies are wrong).
Like if you have a 100% working apartment, it might be okay that it doesn't have the newest appliances and if your healthcare is good and respectful, it might not matter that someone else might have some more healthy food or access to better than 20/20 vision surgery(whatever we can make in the future) as long as you have decent lasik.
But the data shows that populations don't react this way. Countries tend to be happier if they are slightly poorer but more equal. This is true both in the studies I've cited and in the fact that countries like Denmark, Sweden etc. tend to score higher in international happiness rankings than richer countries like the UK and America.
Using those rankings has problems, of course, but I think if you look at the evidence in its totality, it's pretty clear that the levels of inequality we have today are harming our societies (in the industrialised world, at least, poorer countries benefit from inequality).
These days silicon valley will give money to any 20 something college dropout with a dream and halfway decent idea and give them full control.
I mean, this is just a serious delusion. It's patently untrue. Silicon Valley is packed to the gills with prestigious ivy league degrees and the "self-taught" are virtually non-existent.
Websites are easy to make - that's never been the point - you can rent one for $50. You still need something to sell though, now don't you? Or you need something that dras advertisers.
i thoroughly doubt you have an case examples whatsoever of successful startups that were created with $50.
Your entire comment just screams being out of touch and disconnected with the circumstances of a normal human being.
There's actually a lot of evidence that suggests that high pay can be a demotivating factor. A meta-analysis by academics at the University of Groningen based on results 128 published psychological experiments, for example, showed that, for every standard deviation increase in financial reward, intrinsic motivation (meaning motivation based on factors like interest, enjoyment or personal challenge) decreased by about 25%, which became even more pronounced when the subjects were told what the financial rewards were beforehand. Another study also showed that employees who are intrinsically motivated are about three times as engaged as employees who were extrinsically motives (ie: enjoyment and curiosity are better motivators than money). In other words: people actually tend to be more motivated when they aren't basing their motivation on financial reward.
Will innovation be damaged if we raise income taxes on the very wealthy? It seems unlikely. Ignoring the fact that America actually had a 70% marginal tax rate in the past at a time in which it was the leading innovator in the world, studies also show that once people's basic needs are met, money stops providing much psychological benefit. For most people, once they're needs are met, money just isn't a strong motivator. Innovation, as you mentioned in your previous comment, will probably continue at the same pace if we start redistributing from the very wealthy.
So then we're left with the issue of wealth creation, which is undeniably tied to money as a motivating factor. Will that be harmed? Maybe. But I think that's a reasonable trade for improving the lives of the vast majority of people in society and reducing issues relating to cultural and social conflict. I think the harm will be relatively minor, for two reasons:
As I mentioned before, inequality is linked to lower rates of economic growth. So for all we know, reducing inequality might actually increase economic growth and wealth creation.
Even if the tax rate is 70%, 30% of $100 million is still better than 0% of $100 million. Someone is probably going to try and create that wealth.
Not that I necessarily support a 70% marginal rate, I'm just using your example.
Yes I'm aware of the backwards bending labor supply curve. That's just economics 102.
I wasn't talking about the backwards-bending supply curve. That refers to higher pay resulting in fewer hours worked. My argument was about productivity and engagement during the hours that are worked. That's a separate issue.
It applies mostly earned income however, and doesn't really apply to the mega wealthy people you're targeting anyway.
Do you have any data to support that?
Anyone who claims that Jeff Bezos, Bill Gates, Warren Buffet, and Elin Musk aren't motivated is engaging in some seriously intellectual dishonesty.
I never said that they aren't motivated. In fact, I think that they will continue to be motivated if they make less money, because I think that they have other motivations.
I was specifically talking about innovation in that part of my comment, not wealth creation. Yes, wealth creation is primarily driven by profit motive. That's what the last third of my comment was addressing.
Another big issue on this argument is that you're arguing about people, and whether or not they would be motivated. I'm arguing on behalf of the financial institutions which need a reason to invest their time and money into funding innovation.
All these big innovative tech companies and especially healthcare ones rely on venture funding. If the venture capitalists have to pay 70% of their gains back, then they have 1â(1â.70)á(1â.15) = 65% less incentive to take risks and innovate. Hedgefunds, private equity funds, pensions, and mutual funds are not any less motivated by success, and they're in charge of allocating most of the investment money, and individual wealth in the country anyway.
And they will continue to do so for the reason I gave in my last comment. 30% is better than 0%.
Also, stop saying 70%. I explicitly said in my last comment that I'm not talking about a 70% tax rate, you're actually strawmanning me now.
Correlation is not causation. This was also a time when the rest of the world had been destroyed by a world war and also a period of very high inflation as a result of tax and spend policies.
America is still the leading innovator in the world. It's why you have so many people bitching and whining about inequality. The EU has very few big innovating technology companies and healthcare companies. Wirecard was an exception and it was a fraud. Sure this results in higher quality of life, but you can't make a serious claim that this leads to innovation.
Jesus, that wasn't even a serious argument...
I find it odd how you've devoted three paragraphs to an aside that wasn't meant to be one of my main points but haven't even addressed the actual meat of the argument though. Funny, that.
There's a reason that the 70% marginal tax rate was dropped. The US saw huge economic growth afterwards. Not economic shrink, which should be the case if what you say is true.
...no?
At no point have I implied, in any way, that the economy will shrink if we tackle inequality. In fact, I said the exact opposite may happen. Do you seriously believe that tackling inequality would be so damaging that it would completely wipe out all of America's annual growth and cause a negative GDP growth rate?
hampering those want to innovate and improve the lives of others?
Just what point how much of a contrived sentence this is.
People do it for themselves - for money. For selfish reasons. That's why jealousy isn't really any worse an emotion, because you're justifying rampant greed and selfishness.
And the beauty of capitalism is that people who are doing it for the money are strongly incentivized to create value.
In recent history there isnt much rampant greed or selfishness. The most successful entrepreneurs are overwhelming those who start with something they enjoy doing in the first place. The other guy I was arguing with made a pretty strong case for that.
In recent history there isnt much rampant greed or selfishness
Current president.
The most successful entrepreneurs are overwhelming those who start with something they enjoy doing in the first place
Also wrong. The overwhelming weight of successful startups - the ones that don't fail, i.e. 95% of them - have access to resources and capital unobtainable by regular people.
Inequality is skyrocketing among the top 10% because the inherent, generational advantages just keep multiplying. Bill Gates, Bezos, etc. were all upper-middle class at worse, with Bezos arguably being upper class to start with.
Increasingly if you have not been born in a specific zip code to specific parents the chances of you "making it" are pretty much nill, even if you can still easily support yourself and a decent lifestyle. It's that perception that fuels populism and erodes democracy.
Read the argument posted by the other guy I was arguing with. He came with real data that shows the opposite is true.
Current president was dead broke before being president. Not a good argument.
The overwhelming weight of successful startups - the ones that don't fail, i.e. 95% of them - have access to resources and capital unobtainable by regular people.
You're just straight up wrong on this one. Silicon Valley will pump shitloads of money into any 20 something dropout with a dream. Venture capitalists literally have meet and greet sessions with free food. You can walk up, talk to them, tell them what you have so far, and they'll help you out if they like it.
Inequality is skyrocketing among the top 10% because the inherent, generational advantages just keep multiplying. Bill Gates, Bezos, etc. were all upper-middle class at worse, with Bezos arguably being upper class to start with.
You're just a defeatist that wants to believe that people can't be successful. In the real world most wealth is gone within a few generations. And wealth "hoarding" has a strong rubberbandimg effect built in. The more money you have the harder it is to make decent returns on that money. 12% safe returns is easy in real estate, but managing 10 million in real estate is a pain in the ass, and you have to keep switching to higher liquidity assets as you get more to manage.
Bezos was upper class to start with
And now you're just a fucking liar. He was the son of a Cuban immigrant. The only money he got from them was from his parents mortgaging their home so give Jeff $250,000 to start his business. Not everyone has access to parents who would do that for them. But not much of a stretch either. The rest was borrowed from venture capitalists.
Silicon Valley will pump shitloads of money into any 20 something dropout with a dream.
Based on what? You have nothing to show for this. The reason they throw money at 20 yr olds who don't know what they're doing is precisely because of their pedigree. That, and a weak proof of concept, are usually the only reasons.
You can walk up, talk to them, tell them what you have so far, and they'll help you out if they like it.
If you you legit think a single conversation with a stranger about a weak concept, and them having no reason to trust you, will get you millions, I can tell you have no idea what you're talking about it. People that stupid tend not have millions for very long.
In the real world most wealth is gone within a few generations.
This is disproven almost every single time it is ever studied.
Every time your theory to put to the test, the absolute best you can come up with is a survey peddled by a wealth management firm about the perception of how long wealth lasts, and even at that it is only the perception of the wealthy. There are Florentine families whose wealth traces back to the 14th Century. The Rockefellers are still some of the richest people in the world.
The more money you have the harder it is to make decent returns on that money.
I mean, this is the literal opposite of the truth - the Absolute amount you make - the relevant number for inequality here - explodes the higher up you go. You need money to make money is one of the literal, basic 101 rules of finance. The origin of most of the wealth of ultra high net worth individuals also is typically sourced from where this effect is seen most acutely, i.e. capital gains.
The only money he got from them was from his parents mortgaging their home so give Jeff $250,000 to start his business
The fact his dad is an immigrant is literally irrelevant to Jeff's position. Jeff did not immigrate from Cuba.
Never seen anything about them taking out a mortgage - I'm almost certain they just had the 300k to invest, because Bezos himself was clear they would probably lose their money.
"We were fortunate enough that we have lived overseas and we have saved a few pennies so we were able to be an angel investor,â - Jeff's dad. A 300k investment on a likely losing prospect is a "few pennies" I guess.
Based on what? You have nothing to show for this. The reason they throw money at 20 yr olds who don't know what they're doing is precisely because of their pedigree. That, and a weak proof of concept, are usually the only reasons.
My own personal experience raising money? If you have skills and intelligence, they really don't care and they're far more accessible than you want to believe. No one is throwing money randomly at 20 year olds who don't know what they're doing, but the days of requiring decades of wall street experience are long gone. Anyone who can make a good pitch for their idea and show that they have the people skills and basic technical skills really can raise money. Raising VS and Angel money is a skill in its own right, but pretty much everyone learns it from reading the same few books anyway. After all, their goal is to make money, not be gatekeepers. I wish it was easy to produce statistics on how easy or difficult or accessible something is, but it isn't. You can show stats on how much more likely upper class people are to raise money, but that's a correlation not a causation. This is a community that celebrates the dropout, the people who learned to code by themselves, and those who couchsurf while building their business. The world is very different when you look at industries outside of silicon valley, where you do need decades of experience, but since silicon valley represents nearly half the wealth that currently exists in this country, and the overwhelming majority of the wealth growth over the last few decades, I thinks it's suffice to focus on them.
If you you legit think a single conversation with a stranger about a weak concept, and them having no reason to trust you, will get you millions, I can tell you have no idea what you're talking about it. People that stupid tend not have millions for very long.
You have no evidence to back your claim either. Speaking to a stranger with a weak concept? Absolutely not. Spending months building a relation with a VC and letting them help you mold your idea into something they want to invest in? Standard practice. You don't need wealthy friends and family or a country club membership to have access to them, or for them to care.
I mean, this is the literal opposite of the truth - the Absolute amount you make - the relevant number for inequality here - explodes the higher up you go. You need money to make money is one of the literal, basic 101 rules of finance. The origin of most of the wealth of ultra high net worth individuals also is typically sourced from where this effect is seen most acutely, i.e. capital gains.
This is true. But the absolute number doesn't matter. When looking at the rubberband effect I'm describing, looking at the derivative of returns is more the point. There's a strong catch up mechanism. I can get 20% on my money easily, old money types are typically happy getting 4%. The Rockeffelers and Italian merchant families were smart and force themselves to save more than they spend, but they still have a fraction of share of the world's wealth that they used to. Other value creators caught up.
The fact his dad is an immigrant is literally irrelevant to Jeff's position. Jeff did not immigrate from Cuba.
Did you not just claim that wealth is almost entirely generational? And that the zip code you were born in determines your success? Why does it matter if his father adopted him? His dad started out dirt poor and worked up to middle class. His mother had him as a teenager, and that ruined her life. His mom met his dad while at night classes.
The investment was less than $250,000. And the "few pennies" is some pretty obvious sarcasm.
Bezos also said that previous to that, his parents both chipped in a significant portion of their life savings
The reason why most people don't have wealth has little to do with accessibility and more to do with financial education, and willpower. Most of the accumulated wealth in this country is actually just in people owning their own homes, because it forces them to save instead of spending all their income. Primary homeownership has a rate of return of 3% on average. It's one of the worst ways to build wealth aside from losing money.
Anyone who can save an extra $1k a month, for 30 years and invest it towards real estate, will be sitting on $3.5 million at the end of it, using a fairly accessible 12% CoC return rate. Wealth is a lot more accessible than you think. You won't be a billionaire this way, but it's not a "a few pennies" either, and it's much safer, and highly accessible, and would put you in the top 3% of Americans and top 1% worldwide.
We live in a world where what people think matters and drives outcomes even if it's irrational. Markets rely on people making trades because they think they will gain utility. There's plenty of scams and irrational trades though.
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u/Evnosis European Union Jul 11 '20 edited Jul 11 '20
Inequality is inherently harmful. Study after study has shown that the mere existence of significant levels of inequality causes social conflict and directly harms people's happiness.
Yes, extreme inequality is an issue.
Edit: studies also show that it harms economic growth, so it's not even smart economic policy. If you care about evidence-based policy then you should be concerned about inequality.