Now I see why you get pitted As has already been said, it may be American owned but it is, in spirit anyway, international. And, as an American, I like it that way.
Sure, we like viewpoints from other nationalities. But not America bashing. Other nations do a number of things better than we do, we are by no means perfect. And it’s okay to point that out, but not simply to bash America.
I love other opinions, and sure point out ways America can do things better. But I don’t like people from other nations simply bashing and attacking America. That’s our job. When Americans go to other nations and bash and insult their nations, they call us Ugly Americans- and rightly so.
Would you go on a South African or British or Australian message board and say nasty things about their nation? Call out Boris Johnson sure, but insult their nation on their board?
Don’t want America bashed on wealth inequality? Don’t be terrible at wealth inequality.
And don’t think tu quoque is an adequate comeback when it’s pointed out to you, either. South Africa’s worse than the USA at this metric, pointing that out will just earn a “Yep, and…?” from me. Not everyone is a chauvinist.
I’m criticizing America from the comfort of my South African home.
I don’t think you understand how the Internet works. This is an American board, but it isn’t in America and “you can’t call me names in my own yard” isn’t a defence against valid criticism.
I am an American. I have lived overseas for many years. I visit the States very infrequently and am taking steps to naturalize locally. For the time being, though, my passport still says “USA” on it.
I can tell you from firsthand comparative experience that America does a shitty job supporting its people on many, many fronts, objectively inferior to dozens of other countries at minimum. The criticism in this thread is exceptionally mild and fully deserved. Any argument for the superiority of the States is delusional, except in limited areas like “number of citizens incarcerated” and “violence by unaccountable police” and “grotesque wealth inequality.” The USA is a gold medal winner there, you betcha.
Am I still American enough to point out these things? Or are these comments forbidden not just to those without the dark blue passport but also to those whose possession of it has an end date?
We? You mean you correct? Or have you been chosen by some means to speak on behalf of all the other Americans on the board?
Wait? Are you being serious?
Elon has five full-time titles. Also, for reasons discussed at length in different Musk threads, he’s pretty much the prime example of why somebody both shouldn’t have so much wealth, and is undeserving of so much wealth (if we’re basing it on intellect, talent, etc. and not failing upwards).
Moderating: OK, drop the American Way debate, The I am an American Debate, The Musk debate and anything else off topic please. This got silly fast, didn’t it?
I think that the richer you get, the higher the marginal tax rate, plus it should be almost impossible to dodge taxes. These factors combined mean that there would be substantially fewer super-rich, let alone billionaires.
But I wouldn’t put any particular dollar limit on wealth.
And I also disagree about owning stocks or the means of production being allowed or typical routes to wealth. We’ll all be poorer if we close some of these routes to wealth.
Oh, and I’d also advise caution about the “highly technical specialist” being the richest in society, because market failures happen there too. Here in the UK for example, there is a huge gap in pay between junior doctors and the most specialist consultants / surgeons. When the government increases spending on the NHS, IMO too much goes to the top specialists.
I mean, surgeons do a great job, and I don’t begrudge them that money. But arguably society would get more bang for its buck training more doctors to a higher level, than raising salaries of people who are already amongst the best paid and highest-respected people in society. And those experts in turn would likely be happier working fewer hours.
Being a surgeon is not crazy imaginative out-of-the-box thinking like on House, it’s mostly a function of knowledge and experience, and more people could do it in an ideal economy.
I agree with you that these need to be curtailed, but I think of it more like labor and business law should prohibit abuses in these areas, but business owners are encouraged to push as hard as they can within the restrictions, and push as hard as they want to accumulate wealth, as long as our laws draw enough of that wealth away to fund important programs.
I’m certainly fine with marginal tax rates that approach 99% as you approach X dollars. The problem is that this only targets income, and the tax dodge du jour is to use on-paper wealth to get loans using the on-paper wealth as collateral. Then you have other tax dodges, like opening a “charitable” organization that lets the rich person keep control of their wealth while getting a tax deduction. And yes, of course, these holes can be plugged. But seemingly no matter how much you plug holes, new holes emerge. The problem is wealth inequality and all of the social ills this breeds. Maybe the next brilliant inventor is languishing away in the salt mines, but if society was more equitable would create something that would make the world a better place. The issue is that people have a survivor bias perspective. If somebody is rich, then it is because they were worthy. And if somebody is poor, then it is because they were unworthy. This ignores a vast world of possibilities. There needs to be a way that evens out the wealth gap, not just income to make the world a better place for everybody.
(and yes I realize that compared to the world, I am the 1%, and that makes me an evil hypocrite I guess)
I don’t think that the amount of wealth is nearly as important as how it’s gained. Billionaires Taylor Swift and J. K. Rowling used their unique skills to produce products that only they could produce and which were in high demand. That’s not a big problem. Someone who got a fortune, even a smaller one like a hundred million, through inheritance, or high-stakes gambling, or legalized theft, or exploitation of those who couldn’t resist them, is a different story. And someone who somehow manages to be filthy rich despite having an insanely negative net worth is worse yet.
I think it is inarguable that the free market “works”, for certain definitions of “work”.
Free markets appear to do well encouraging development and growth. Note, this is not universal praise of the free market. It is a description of a trend that we have seen free market societies undergo. And it is not clear exactly how much of this is due to free market principles themselves. China’s market is not very free, yet they have experienced rapid growth; and common examples meant to showcase free market societies’ technological prowess, like massive mabufacturing efforts during WW2 or the US performance in the Space Race, involved tons of government intervention.
Right off the bat, let’s define “free market” real quick, because in truth a “free market” is like a “frictionless slope” - a simplification used for creating a scientific model, not something that actually exists. A truly “free market” makes two big assumptions:
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No barriers to entry. Anyone who wants to sell on the market can do so at any time! You see that Bill Gates and Steve Jobs are making a killing selling computers? No problem, guy living out of his car, you can get a loan today and start your new computer business tomorrow!
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Perfect information! I don’t know about you, but when I walk into a grocery store and look around, I calculate precisely how many utils (a measure of the utility gained from each item) I can gain by buying each product. Since I know exactly what each product costs to make and how much every store in the area sells it for, I always buy the optimal basket of goods.
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There are no externalities - costs that are borne by neither buyer nor seller. A classic example is pollution; if you make items in your factory and sell them to me, unless someone imposes regulations or pollution offset taxes or something, the market is totally blind to the cost created by your factory polluting, because that isn’t included in your costs nor in the price the consumer pays.
There are other assumptions as well, but I think most of them logically follow from these three. For example, we must assume unlimited buyers and sellers - that if the price of an item gets too high, there will always be another seller to jump in and drive down the price - but I think if we assume no barriers to entry and perfect information, then people in the economy will always know know when such an opportunity arises, and always have the means to act on it (since no means are necessary!).
So obviously, a free market - like a frictionless slope or a spherical cow - does not exist. And when we use more complex economic models that account for these failures of the free market, what they show is that sellers are able to use these flaws to optimize the market a different way. Instead of equilibrium maximizing utility for both buyers and sellers, sellers can form price cartels or monopolies; they can use all sorts of nefarious techniques to increase perceived value while cutting cost; and they can otherwise skew the market in their favor.
I think the existence of the uber-wealthy are a consequence of these market failures. In a truly free market, accumulating so much wealth (for example, Apple’s massive cash reserves) wouldn’t be possible, because Apple would be forced to innovate and cut their prices in order to compete with other sellers of high end electronics.
We do still want to let Apple or a competitor (or ideally multiple sellers at once) “win”, or make a substantial enough profit to incentivise them to innovate; but from society’s perspective, Apple’s massive cash reserves, or most of the money it pays to high level executives, is simply wasted.
So I think the government’s job is to do things like ensure that unfair barriers to entry aren’t being placed, to bust up cartels and monopolies, to ensure that as much accurate information is provided as possible (ie the FDA), etc… and to ensure that external costs are accounted for in some way (taxing pollution, for example).
I think if you took care of enough of the rotten incentive structures, you’d get better outcomes without needing to resort to a high cap.
How wealthy would the wealthiest person be in this society? I don’t know how it would shake out - certainly less wealthy than the wealthiest people in our society. I don’t think a handful of rich people are inherently a problem, as long as they don’t have disproportionate control over society and as long as even the worst off members of society are doing well.
No. That just encourages toeing the line, finding loopholes and gaming the system, at best. “Pushing hard” should be discouraged by all means possible.
An excellent post, @Babale , but you also left off one other key assumption, that all actors (buyers and sellers) are acting rationally. That is, everyone is looking out to do what’s best for them.
Though, economists tend to treat this one as a definition rather than an axiom: What’s best for any individual can only be determined by that individual, and the only way to know what any individual considers best is what they do, therefore the outcomes of any action an individual takes are assumed to be what they consider best, therefore it’s tautological that everyone is always acting in their own best interest. Someone cuts off their own nose? Well, they obviously saw great personal value in being noseless, and therefore rationally pursued the best course of action to achieve noselessness.
You are right, I did leave that one off, and you correctly identified the reason why I did so intentionally - you see right through me, an economist by training:
With the caveat being that since we are assuming perfect information, we are also assuming that when you step into Joe’s Nose Removal Clinic and pay him $50 to cut your nose off, you know exactly how this will impact your quality of life and are making that decision accordingly. IE if you’re doing it to spite your face, you’ve calculated the utility you will get out of satisfying your spiteful impulse and are weighing this against the cost of living without a nose.
But you’re right, the idea that everyone is acting to maximize utility (IE acting “rationaly”) is one that should be listed because it isn’t true; I may argue that it isn’t true because we lack perfect information, but that’s not necessarily always the real reason.
My ideal world is post-scarcity. Everyone’s basic needs are met. No one needs to work to get their own room in a public housing complex, with a bed and a window and a small closet and a door they can lock. Everyone has access to medical care, bland but nutritional food, boring but adequate clothing, public parks, and public libraries.
Some people won’t work at all, and will have zero wealth, so a multiple of “how much do the poorest have” won’t really work as a limit.
Most people will work. Partly because they want toys and pretty clothes and fancy food, and partly because they find it rewarding to make or achieve something, and partly to have resources to please their friends, and partly just for status. I guess the upper limit on wealth should be low enough that no one wields grossly disproportionate power over others.
Closer to the real world, i observe that many real people have negative wealth, so i still have trouble with a multiplier to define “too much”. Maybe a multiplier of average wealth would work? I still think that problems develop when a few people have disproportionate power over others. (And note that money isn’t the only form power takes, although it’s an important form of power.)
I tend to view the economic system as a giant game of Monopoly. Which is appropriate, since the designers of the game intended it to be a microcosm of the economic system. I think they did well.
One important lesson of the game is that the exploitative and unfair behavior of the folks who end up with all the properties and the money is a direct outcome of the rules of the game. Not a personality characteristic of the players.
I think there are a limited number of things a significantly wealthy person can do if they recognize the unfairness and built-in inequities of the game. Some become benevolent philanthropists, but it doesn’t dismantle the Monopoly game. A tiny handful try to use their money to upend the game, investing in political dissent or even outright revolution. It doesn’t go far. In most ways the ludicrously wealthy are as defined by their socioeconomic circumstances as the rest of us, and no they didn’t design this whole thing in the lounge of the finishing school they attended.
I understand the desire for a blamable culprit but the rich didn’t make this happen. Instead, the system made the rich just as it made the rest of the classes.
I never particularly wanted to be rich. I was amazed when circumstances let me rise from getting by to being comfortable. A lot of that happened because I’m white, American, male, able-bodied, and in the circles I ended up latching on as an employee, not being truly cis male didn’t matter much. I’m privileged. But I still can’t do the things I’d most like to do. I couldn’t do them with 100x the net worth I’ve got. There are simply things that money can’t buy.
The money system sucks. It has no redeeming features relevant to modern life situations. It benefits nobody. And nobody is to any meaningful extent keeping it in place, it’s nobody’s perfect scheme. It’s at least 97% here by inertia and lack of a viable alternative.
I just want to also applaud @Babale’s excellent post.
It’s unfortunate that the people with money often have the loudest voices, and they’ve been able to use that voice to convince a large portion of the American public that a free market is one without the government’s grubby hands on it.
When in fact some degree of regulation and intervention is necessary for a free market, where we’re meaning “free” as in competitive and transparent.
This is true, but I feel this always gets into murky territory. Or at least, it’s often more complex than the ways it can be depicted in the media, which often panders to people’s judgmental feelings towards other people’s purchases.
For example, there can be sound reasons for a poor person to buy some luxury items, indeed the utility of symbols of wealth is often higher if someone lives and works in a poor area.
It can make sense to buy electronic goods even for those struggling to always put food on the table, as much as the tabloids criticize such decisions.
And (and this is a personal hobby-horse), it’s possible to act rationally and get “sniped” in an auction, because there is no exact threshold line between a good and a bad deal (or at least: no-one bids close to that line).
Anyway, I don’t dispute that people often make poor purchasing decisions, indeed we all do. Just that it’s a can of worms, so it’s better to focus on the “fully-informed” part of the equation.
But that goes both ways on the wealth spectrum. There have been posts in this thread saying the wealthy got their money for doing nothing, but that’s rarely true. Earlier this year Geoffrey Hold in Hinsdale NH left behind nearly $4M after working as a driving instructor and trailer park manager, About a decade ago there were similar stories about Robert Read in Virginia invested the money he earned as a janitor up to $8M. The typical judgey comments on such people are that they should have spent more money instead of saving it, or implications that people that don’t are noble for choosing to “enjoy life” (though they seem to complain an awful lot about money problems).
About .2% of the population have run a full marathon. It’s not that the vast majority don’t have the resources or ability to do so - they just can’t be bothered. I feel that’s similar about wealth in a free market - it’s less about vast conspiracies by The Man to keep people down and more about most people not wanting to scrimp, save, learn and all the other hassles that come with building wealth.
But you say the former is “rarely true” and then give examples of much more unlikely scenarios.
Of the set of people with $8m in the bank, you are going to find a lot, lot more who grew up comfortably middle-class or higher than you are going to find janitors.
I think it’s neither.
I think the more money that you have, the more options are available to you, and the less immediate need to do things just to put food on the table or a roof over your head.
This is why, all else being equal, money will flow towards money.
I mean, when we hear stories of someone from a dangerous neighbourhood scrimping and saving to go to college…that’s great. But implicit in that is that that difficult, risky option for that person is a trivial option for someone from a wealthy family. One option among many, and not really a “risk” at all.
Similarly, a wealthy business-owner might talk about the long hours she worked and how the first couple businesses failed and she kept at it. Well, a lot of people would simply be homeless if their first business idea failed, or didn’t deliver good revenue quickly…a lot of people have no backstop, no safety net.
It’s difficult to quantify this except to look at social mobility overall and note that the US is basically mediocre…not the worst place in the developed world, but nothing to suggest that there’s a reason to consider a poor person getting rich the American dream.