# Ownership rights and inequality **URL:** \ **Category:** Great Debates\ **Created:** [May 3, 2014, 5:27pm UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592 "2014-05-03T17:27:41Z")\ **Posts on this page:** 10\ **Page:** 4
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [May 10, 2014, 4:05pm UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592/61 "2014-05-10T16:05:49Z")
[QUOTE=LinusK] The point is that it’s the person with the shitty under-paying job (and millions like her) who subsidize the lifestyle of the second group. [/QUOTE] Conversely, it could be that person who vacations in France (and millions of similar people who aren’t quite the caricature you spun for) subsidizing the lifestyle of your person with their ‘shitty under-paying job’. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 10, 2014, 4:31pm UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592/62 "2014-05-10T16:31:07Z")
> [@LinusK](#): > > The point is that it’s the person with the shitty under-paying job (and millions like her) who subsidize the lifestyle of the second group. You haven’t actually demonstrated this in any way. Can you present an argument that the person with the low paying job subsidize the lifestyle of people who vacation in France? I could make a similar unsubstantiated claim that “the rich subsidize the poor by choosing to spend money in areas employing an underclass.”\* It has about as much substance as your claim. \*hypothetical - I don’t make this claim. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [May 10, 2014, 7:27pm UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592/63 "2014-05-10T19:27:45Z")
> [@Stratocaster](#): > > What economic theory asserts this? It sounds ridiculous on its face. And don’t you want more people working? (Ignoring for the moment the non sequitur about how they’d necessarily have to be paid less in order for the rich to buy more stuff.) It’s math. If x number of people are producing y amount of goods and services, and those goods and services are distributed among people who are not producing, but are consuming, then the people who are producing must consume less than what they produce, in order to subsidize the consumption of the rest. And I do want more people working. I also want them keeping a greater percentage of the value of what they produce. ---
**Author:** ![Honesty](https://avatars.discourse-cdn.com/v4/letter/h/f04885/32.png) [@Honesty](https://boards.straightdope.com/u/Honesty)\ **Post date:** [May 10, 2014, 8:15pm UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592/64 "2014-05-10T20:15:20Z")
> [@Bone](#): > > Where is the argument that income inequality drives down unemployment? You seem to be using minimum wage as a barometer for income inequality. You haven’t demonstrated this at all. Without this link, the rest of your argument falls apart insomuch as it’s an argument against certain economic principles. [QUOTE=Bone] You are conflating income inequality and minimum wage changes. Why? [/QUOTE] Elizabeth Warren seems to [think so](http://www.washingtonpost.com/blogs/post-politics/wp/2014/02/28/warren-minimum-wage-hike-needed-to-stop-income-inequality-in-america/). > [@Bone](#): > > If true, so what? You’re essentially saying that economic prosperity is precipitated by a functioning government and that people will do what they can to protect and further their interests. Is this supposed to be a profound revelation? We learned this as children. **Are you suggesting that it shouldn’t be this way?** No, it shouldn’t be this way. You shouldn’t be able to keep your pot of gold by enacting laws to keep the peasantry under your thumb. You shouldn’t be able to keep yourself enriched at the expense of everyone else. [QUOTE=Bone] You haven’t actually demonstrated this in any way. Can you present an argument that the person with the low paying job subsidize the lifestyle of people who vacation in France? [/QUOTE] I don’t get this, at all. Here’s a question for you: does the comparatively low wages Apple pays for their Foxconn slaves subsidize the cost of Apple products in the U.S? [QUOTE=LinusK] Well, I cited two popular versions of the argument: 1.) that minimum wage laws cause unemployment; and 2.) that taxing the rich causes unemployment (they fire maids or servants or whatever). [/QUOTE] [QUOTE=LinusK] I already gave the cite. It’s in the first post of this thread. If you don’t want to read it, that’s up to you. [/QUOTE] **LinusK** , I had to chuckle when I read this. Welcome to my world. I have found that most people do not read cites. I don’t even bother anymore. Slightly off-topic: there was a thread awhile back regarding [Picketty’s book](http://boards.straightdope.com/sdmb/showthread.php?t=721543) regarding income inequality, bringing with it the usual peanut gallery shooting it down. Anyway, one poster, **Shalmanese** , wrote [this post](http://boards.straightdope.com/sdmb/showthread.php?p=17317666#post17317666) where s/he detailed the arguments in the book. The peanut gallery stepped right over Shalmanese’s post and continue prattling on about nonsense (shoulda, coulda, wouldas) for 100+ more posts. Hell, even I wrote [this post](http://boards.straightdope.com/sdmb/showpost.php?p=17328117&postcount=164) bringing a graph (you know, a cite) from Picketty’s book for discussion, they stepped right over that, too. I’ve learned the peanut gallery likes to argue. They don’t give a shit about your cites (and, frankly, when “debating” against them, neither should you). - Honesty ---
**Author:** ![Stratocaster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/stratocaster/32/16393_2.png) [@Stratocaster](https://boards.straightdope.com/u/Stratocaster)\ **Post date:** [May 10, 2014, 9:55pm UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592/65 "2014-05-10T21:55:33Z")
> [@LinusK](#): > > It’s math. If x number of people are producing y amount of goods and services, and those goods and services are distributed among people who are not producing, but are consuming, then the people who are producing must consume less than what they produce, in order to subsidize the consumption of the rest. > > And I do want more people working. I also want them keeping a greater percentage of the value of what they produce. Wow. This is such a fundamental misunderstanding of how economics work, I’m not sure where to start. Seriously, you believe that the poor consume less because the rich guys gobble stuff up without producing their fair share, leaving the shelves bare? Here’s a question for you: When the well-to-do buy stuff, what do you suppose happens with the money they pay? What does that purchase trigger? Are you saying, essentially, “nothing is triggered, because at that point everything is used up”? ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [May 11, 2014, 2:19am UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592/66 "2014-05-11T02:19:29Z")
> [@LinusK](#): > > And I do want more people working. I also want them keeping a greater percentage of the value of what they produce. What’s the optimal percentage? Since obviously you don’t agree that ‘their salary’ is a metric of what their labor is worth (both to themselves and to their employer, since that’s the agreed upon exchange between them), how do you propose to set the value? > [@](#): > > It’s math. If x number of people are producing y amount of goods and services, and those goods and services are distributed among people who are not producing, but are consuming, then the people who are producing must consume less than what they produce, in order to subsidize the consumption of the rest. I’m trying to figure out if this is a rant about individual rich verse poor (the rich being consumers and the poor being producers, with the assumption that it really is that black and white to you), or if you are talking about rich nations that you figure are consumers verse poor nations that you figure are producers. Or maybe you meant it both ways…or neither for all I know. It’s unclear, though either way I agree with Stratocaster that there is a disconnect between your apparent view and reality. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [May 11, 2014, 1:16pm UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592/67 "2014-05-11T13:16:39Z")
> [@Bone](#): > > That’s odd, because it was one of the two main ideas you used to support your position, and one where you repeatedly conflated with income inequality. Are you backing away from that? I mentioned this in post 20, 23, 27. Mace mentioned it in 33, and others as well. No. You’ve just refused to understand what I’m saying, despite me repeating it over and over. What I said was the argument against minimum wage - usually asserted by economic conservatives - is merely an example of the kind of argument that relies on the idea that income equality requires unemployment. That’s it. That’s all I was using it for. You’ve simply decided ignore everything else, and focus minimum wage laws, instead. What I’ve said is that if I were in charge of economic policy (which of course I’m not) I’d focus on eliminating unemployment, rather than minimum wages. That would help both people who are unemployed, and people with low wage jobs, by raising wages for everyone, _and_ increasing employment. What you’ve said is that unemployment is “good” for the economy. Why? > [@](#): > > This reveals a fundamental misunderstanding of how the economy works. When you are talking about income inequality, it does not matter that income is from toiling away digging ditches, or income derived from investments. It is all income. If you are trying to make a more nuanced argument about wage income vs. investment income you have failed to do so. > > People who earn income through investments are producing. They may not be directly producing tangible goods, but neither is the musician or poet. The fact that someone is willing to pay them for something means they are contributing. > > If I have $100 to loan you, and will do so as long as after a set amount of time you will repay me $105, at the end of the transaction I have earned $5. You m$ay use that money to engage in other productive activity, but the transaction itself, that of loaning you the money, contributes to the overall economy. If you’ve selected someone to lend money to, based on whatever criteria you think is appropriate, you’ve done work. People who do that professionally are called loan officers. (Or some such title.) They typically work at banks. If you take your $100 to the bank, and get interest, you’ve done no work. What you have is called “unearned income”. (Income from sources other than work, like interest.) One of the things I’ve said upthread is that if I were in charge of economic policy, I’d keep interest rates low, permanently. The idea that you should automatically get richer, just because you’re already rich, creates a culture of dependance and entitlement among the rich, which is unhealthy. If the rich want to get richer, they should be encouraged to be productive, rather than just relying on subsidies from the rest of us. > [@](#): > > I will as some level of unemployment is healthy for the economy. That is unless we are talking about [full employment.](http://en.wikipedia.org/wiki/Full_employment) Your link says “full employment” means unemployment of up to 13%. What do you think it is? ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 11, 2014, 2:20pm UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592/68 "2014-05-11T14:20:49Z")
> [@Honesty](#): > > Elizabeth Warren seems to [think so](http://www.washingtonpost.com/blogs/post-politics/wp/2014/02/28/warren-minimum-wage-hike-needed-to-stop-income-inequality-in-america/). She states it as fact without any support - at least based on that article. The question was - why was LinusK conflating income inequality with minimum wage. There has yet to be a response. > [@](#): > > No, it shouldn’t be this way. You shouldn’t be able to keep your pot of gold by enacting laws to keep the peasantry under your thumb. You shouldn’t be able to keep yourself enriched at the expense of everyone else. It’s a good thing that that’s not the position I or anyone else stated. If you think that people wont act in their own self interest (what I stated) then you are divorced from reality. > [@](#): > > I don’t get this, at all. Here’s a question for you: does the comparatively low wages Apple pays for their Foxconn slaves subsidize the cost of Apple products in the U.S? What part don’t you get? I can explain if you’ll elaborate. It depends on how you are using the word ‘subsidize’. The labor of Apple’s foreign manufacturing plants are a contributor to the overall cost of producing their products. Apple’s cost of producing goods is a factor in the price they set. What’s your point? > [@LinusK](#): > > No. You’ve just refused to understand what I’m saying, despite me repeating it over and over. What I said was the argument against minimum wage - usually asserted by economic conservatives - is merely an example of the kind of argument that **relies on the idea that income equality requires unemployment**. That’s it. That’s all I was using it for. (my bold) Who is making this argument? You’ve stated it, but you have not actually advanced it. No one in this thread certainly. But it’s nice that it took till post 48 for you to back away from minimum wage as a foundation for your argument. > [@](#): > > If you’ve selected someone to lend money to, based on whatever criteria you think is appropriate, you’ve done work. People who do that professionally are called loan officers. (Or some such title.) They typically work at banks. > > If you take your $100 to the bank, and get interest, you’ve done no work. What you have is called “unearned income”. (Income from sources other than work, like interest.) This is even more revealing. The term ‘unearned income’ does not mean that when you are the recipient that you’ve done no work. It is typically used for tax purposes to describe a certain type of income that is taxed differently than other ‘earned income’ as defined. It can also be used in accounting more typically called deferred revenue, but that’s probably not what you are talking about. In any case, unearned income is income none the less. And since you are including this type as part of the comparison when you are talking about income inequality, it really doesn’t matter the method of earning. Even still, one can be a micro lender like through Kiva or other P2P lending. Is that earned in your world? It’s not for IRS purposes. I can either directly loan to someone, or I can hire others to make those loans on my behalf. You are drawing odd distinctions where in reality it doesn’t work this way (unless you are talking about taxes which has some less flexible rules). > [@](#): > > The idea that you should automatically get richer, just because you’re already rich, creates a culture of dependance and entitlement among the rich, which is unhealthy. If the rich want to get richer, they should be encouraged to be productive, rather than just relying on subsidies from the rest of us. No one automatically gets richer. Investment income is income none the less. Both the receiver and payor are engaging in a transaction where both parties believe is beneficial. That in itself is productive. You have failed to present any evidence that one group is subsidizing the other. > [@](#): > > Your link says “full employment” means unemployment of up to 13%. What do you think it is? Context. Try reading in context. It says: \*Full employment, in macroeconomics, is the level of employment rates where there is no cyclical or deficient-demand unemployment.[1] It is defined by the majority of mainstream economists as being an acceptable level of unemployment somewhere above 0% … The 20th century British economist William Beveridge stated that an unemployment rate of 3% was full employment. Other economists have provided estimates between 2% and 13%, depending on the country, time period, and their political biases. For the United States, economist William T. Dickens found that full-employment unemployment rate varied a lot over time but equaled about 5.5 percent of the civilian labor force during the 2000s. … An alternative, more normative, definition (used by some labor economists) would see “full employment” as the attainment of the ideal unemployment rate, where the types of unemployment that reflect labor-market inefficiency (such as mismatch or structural unemployment) do not exist. That is, only some frictional or voluntary unemployment would exist, where workers are temporarily searching for new jobs and are thus voluntarily unemployed. This type of unemployment involves workers “shopping” for the best jobs at the same time that employers “shop” for the best possible employees to serve their needs. Its existence can allow the best possible correspondence between workers and jobs from the points of view of both employees and employers and thus promotes the economy’s efficiency. … _And more importantly for the US:_ The United States is, as a statutory matter, committed to full employment (defined as 3% unemployment for persons 20 and older, 4% for persons aged 16 and over); the government is empowered to effect this goal.[13] The relevant legislation is the Employment Act (1946), initially the “Full Employment Act,” later amended in the Full Employment and Balanced Growth Act (1978). The 1946 act was passed in the aftermath of World War II, when it was feared that demobilization would result in a depression, as it had following World War I in the Depression of 1920–21, while the 1978 act was passed following the 1973–75 recession and in the midst of continuing high inflation.\* So what do I think it is? Above zero for sure. As a statutory matter, as described above. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [May 11, 2014, 2:27pm UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592/69 "2014-05-11T14:27:13Z")
No, we understand what you are saying just fine. You just have never demonstrated it, and have (as you say) simply repeated it over and over. > [@](#): > > If you’ve selected someone to lend money to, based on whatever criteria you think is appropriate, you’ve done work… > > If you take your $100 to the bank, and get interest, you’ve done no work. Why is it “work” if you choose one investment after weighing the pros and cons, and not “work” if you choose another investment after weighing the pros and cons? Regards, Shodan ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [May 11, 2014, 4:12pm UTC](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592/70 "2014-05-11T16:12:36Z")
There’s a lot here, and I appreciate the fact you took the time to read what I’m saying. I don’t have a lot of time now, so I’ll respond to some of what you’re saying now, and some later. > [@septimus](#): > > 1. Since unemployed people have little income, perhaps the unemployment increases the GINI coefficient directly. > > The thrust of your argument, I think, relates to how the fruits of production are split between workers and owners. Since the value of owned capital (robots etc.), intellectual property (music, drug patents, etc.), land (which is scarcer per capita as population increases), has risen in an era of globalisation and technology, the share of unskilled labor falls. Even skilled labor falls in value as competition rises among millions of skilled workers around the globe. Just as the ratio between best paid and worst paid worker has risen in America, so has the ratio between corporate profits and total wages and salaries (even incl. CEO bonuses.) > > This is not a simple area, but most serious thinkers would agree with me (and LinusK) that given the rising Gini in developed countries, and “all other things being equal”, policies that reduce such inequality are better than further increase. > > (LinusK may go on to make neo-Marxist arguments, which I will ignore, except to note the recent suggestion that all scarcities should have private rent collectors is malarkey.) > > 1. I would not call the “free market” bogus but I do agree that government is necessary for successful capitalism. This is shown by history; all successful periods being led either by a strong governing state, a strong military or slave-holding regime, or, in some cases, by an extension of such a state or regime. (Recovery of Europe from the “dark ages” began as Kings were able to establish courts, mercenary armies, etc.) > > 2. The underlying sentiment may have some validity but we shouldn’t make a caricature of our own ideas. > > 2, 3, 4, 6. OK. > > 1. I don’t understand the desire to deprive living artists of the fruit of their labor. I agree that the Mickey Mouse law is absurd. (But at least Walt Disney created Mickey Mouse. I’d prefer to denounce the usurpation of A.A. Milne’s characters.) > 2. Inflation is possible (probable indeed especially with the “bonds that would be bought by the Fed, and kept indefinitely”). Moreover, even without inflation, high interest rates are appropriate in the event, heaven helping, of restored capital production growth. > 3. Some tax simplifications are plausible, but flat-tax and no-deductions are problems not panaceas. I’m not proposing flat taxes. (God help me if I ever did such a thing.) When you fill out your taxes, you have to choose between taking the “standard” deduction, or 'itemizing". Itemizing takes a lot of work, but for people who are intent on paying the least amount of tax possible, they have to itemize in order to find out which option saves them the most money. For most people, I suspect, (I’m sort of spit-balling, I have no hard data) the standard deduction is better. In general, you either have to be paying a massive amount of interest on your house(s) or giving tons of money to charity (and keeping receipts, of course) for itemizing to be worth it. People are always complaining about how complicated the tax system is (especially flat-taxers). Eliminating itemized deductions (while keeping the standard deduction) would make taxes easier for most people, without actually causing them to pay more taxes. I think using the tax system to encourage people to take out massive mortgages is sort of silly, and if you want to keep the charity deduction, on top of the standard deduction (or in addition to the standard deduction) I’m fine with that too. You can already deduct student loan interest without itemizing, so there’s no reason why you couldn’t do the same thing with donations to charities, too. On copyright law, I’m curious what you think the right amount of time should be. Originally, it was (if I remember right) 14 years. The US constitution gave Congress the right to create copyrights, which it did a few years later. However, it (the constitution) said that copyrights should be for “limited times” and for the benefit of the public. In other words, it’s there to encourage people to create stuff, so that people can read it and see it, not merely to enrich a handful of people whose work is massively popular. Or, as is often the case, to enrich the corporations who own the copyrights of the people who produced the work. Many of the greatest artists create work not because of money, but in spite of it. What I mean by that is that they’re not producing something in order to get rich, but because they’re creative people. They’re not setting out to create something that’s going to appeal to the mass market, but rather they’re trying to produce or create something that important, or beautiful, or true, to them. David Foster Wallace, for example, wrote a 1000+ page novel, which included hundreds of pages of end-notes. Having read it several times, I’d argue it’s one of the best novels written. (Or at least, that I’ve read.) But it’s doubtful he wrote with the idea that it would be a best-seller. It’s possible, I suppose, but unlikely. Anyway, he’s dead, having killed himself a few years after writing it. Nevertheless, someone, somewhere, is still benefiting from the copyright. (Primarily, I suspect, the publisher.) Herman Melville died penniless. Moby Dick was initially a commercial failure, perhaps because the publisher left off the last chapter. It wasn’t until later that it became a staple of American literature. Kurt Cobain did become a commercial success, during his lifetime. But the music he wrote and performed during wasn’t made or performed in order to join the ranks of rich pop-stars. It was written _attacking_ the culture of industry of pop-music. And of course, people are still making money off him, despite his death. Picasso died in a gutter. Today, rich people trade his work for millions of dollars. Michael Jackson, before he died, bought the copyright for the music of the Beatles. I’m not sure who owns it now. Currently, according to [this](http://www.ipwatchdog.com/2009/07/01/michael-jackson-and-the-beatles-copyrights/id=4363/) website, a corporation called Sony/ATV owns over 600,000 copyrights, including the music of Leonard Cohen and Bob Dylan, among others. Anyway, the point is that the copyright holders aren’t always (or even usually?) the people who made the original work. The best artists aren’t usually in it for the money. And, I would add, the people who are making _the most_ money aren’t the artists, but the people who stand between the artists and the public. The producers, the labels, the networks, and the other corporations that either directly control the copyright, or indirectly control it by controlling distribution. I’m not against people making money from their work. I’m all for it. I’d like to see more people making more money from their work, and fewer people making money off other people’s work. As it stands now, there’s a vast pool of artists and writers and musicians whose work nobody’s going to see, because the corporations that control distribution are only interested in producing stuff they think will make money. And, I’d add, have a famously poor record when it comes to judgment. ([J.K. Rowling](http://www.cracked.com/article_20285_5-hilarious-reasons-publishers-rejected-classic-best-sellers.html), as just one example, was rejected 12 times. Her books went on to make $25 billion dollars - mostly for people other than J.K. Rowling. The standard author’s royalty is 10%. For genre work, it’s less.) Anyway, you mentioned “the life of the author”. That’s different from the law we have now. Would you prohibit artists from selling copyrights? Or corporations from buying them? Would copyrights end as soon as the author died? Cormac McCarthy is in his 80’s. His most recent book, “The Road” is the best he’s written. (And he’s written some pretty good ones.) Should he be penalized for being old? [Previous page](https://boards.straightdope.com/t/ownership-rights-and-inequality/687592.md?page=3)