1) Rognlie[1] pointed out that Piketty's central premise -- that the returns to capital are growing faster than the overall growth rate of the economy -- falls apart when you properly account for asset class and depreciation. The accelerating returns are specifically to real estate, while the returns to capital (excluding real estate) are flat.
2) Tyler Cowen pointed this out on his interview [2] with Piketty and Piketty essentially conceded the point.
Tyler implied therefore that the natural conclusion is Georgism[3]
Actually, Piketty doesn't concede this point and makes the extremely important distinction between aggregate wealth and wealth distribution. What Rognlie does point out is the incredible importance of real estate in the growth of capital income - far more than Piketty originally credited it with in Capital in the Twenty-First Century. As Piketty points out in the interview, an explanation based around real estate literally cannot explain the growth in wealth share of the top 1% or top 0.1% or top 0.01%, because the wealthier you are, the smaller a percentage of your wealth consists of real estate. Which then naturally leads to the conclusion that Georgism/land value taxes are an insufficient tool for combating extreme inequality.
Also, non sequitur: while I enjoyed A Brief History of Equality, I feel that it tried to stuff too much historical detail into so short a work - it reads a bit like a condensed version of Capital and Ideology. I found the most enlightening parts of Piketty's previous works involved the tracing of political and economic minutiae across time and space, and I'm not sure I would have actually enjoyed A Brief History of Equality if I didn't already have that background.
Georgism just makes more and more sense the more you think about it. The idea that people should be allowed to profit off unimproved land is so clearly immoral, and that’s not to say anything for the efficiency Georgism brings and the amount it would help lower rental costs.
I, like Rognlie, can make the lines say what I want to dissuade change to status quo.
He’s still just one man. There’s no need to listen to him.
I’d rather listen to the majority who are being fleeced by thought ending men like Rognlie. “Oh but don’t think to change things; see look here is other math!”
Humans don’t exist in a vacuum of externalities; Rognlies advice makes it seem so. Fidgeting with the numbers doing nothing real for the people in need is no different than “thoughts and prayers”.
Story mode still rules, as we keep setting aside work of value to people for the story of how some people earned their status. I don’t care what Rognlies credentials are; he’s one of seven billion.
I applied my masters in elastic structures to design power distribution equipment for people. Rognlie sits and pontificates. Screw him.
I often really like this community, but I have found people here especially prone to falling to the "meritocracy trap". ie.: believing they are mostly where they are because of ability, worthiness or hard work, rather than mostly luck.
That's really unfortunate, and results in a lot of non-self-aware political bickering.
I often really like this community, but I have found people here especially prone to falling to the "no-dissapointment-in-my-life-is-ever-my-fault trap". ie.: believing that they are where they are due to vast and well-executed systemic conspiracies rather than mistakes, missteps, or a simple lack of motivation or ability.
That's really unfortunate, and results in a lot of non-self-aware political bickering.
On the contrary, the view that life outcomes are due to circumstances and luck leads to the denigration of success and competition, abdication of responsibility for one's life choices, and ultimately to really bad economic policy that will make everyone worse off.
We now see this kind of thing even infecting our education system, and it's driving a lot of liberal people to the political right. Look at how Asian American voters acted in the recent San Francisco school board recall, for example. (Also: try telling those people that their success in our society is due to luck, even though they came here in poverty and were discriminated against every step of the way...)
Piketty always has insightful commentary on the topic and I'll definitely be checking out this book. I think we'll come to recognize that R > G is an important influencer for social stability and long term prosperity.
That said, I do wonder if we're looking at inequality (or more specifically hierarchy) through the wrong lens. It seems like almost all independent societies naturally develop some sort of hierarchy (chief, priest, leader) without any outside influence. To me that points to some underlying natural law or at least a biologically-influenced tendency that higher level social constructs will be ineffective at changing.
Is there a single example in history where income redistribution worked while it was also easy for foreigners to enter the country and growth persisted for everyone while maintaining said ratios of acceptable inequality?
- If you don't allow foreigners, I'll argue that you haven't solved anything. You've simple picked the winners.
- If the ratio of inequality is disrupted, I'd also argue you haven't done anything other than move the problem (and the losers) to the future.
- If you decide not to redistribute, well that's the current situation for better or worse.
Personally I think a better problem to solve is for humanity in general to decide what the minimum level of prosperity should be, worldwide and slowly try to raise this bar. AFAIK this is basically what we're doing. We could raise the bar faster, though.
I don't see why the effect of a policy should be judged with a so wide focus that it's considered worthless unless it helps the whole humanity and foreigners.
Policy is decided, implemented and evaluated on the level of societies, not on a global level. We have no global government, and the only global cooperation is voluntary, with wealth redistribution only happening as much as one society arbitrarily chooses to spend on charity and foreign aid for another. Social policies are not implemented worldwide but rather by some society for its own benefit, and if some policy makes a society successful, that's a great policy for that society. Leaders in democratic societies are accountable to people of their society about ensuring that their needs, desires and choices get met, they are not accountable to humanity in general but rather the people they represent, and in general these voters give a very limited mandate to sacrifice prosperity of their society to "raise the bar" of worldwide prosperity. If the society chooses to make policies that benefit everyone else, great, but if it does not, then the policy is good if and only if it fits the choices of that particular society. We can make a strong argument that there is a moral imperative not to harm other societies, however, ignoring them is an acceptable 'default' state of noninterference.
If doing something allows you to "pick winners" so that all of your society are winners, that would be great (certainly better than what we have now) and would have effectively solved things that matter for that society, even if it does not extend to the world beyond its borders.
What we have now is obviously not working. We have serious homeless problems involving children. That is plainly the mark of a state that is failing its citizens. There is more wealth around than we have use for (see: space yachts, meme coins, NFTs), so instead of leaving it to slosh around in stupid risky ventures, move it into pro-social infrastructure and health/education support services. There is more than enough wealth abundance to uplift the most disadvantaged while still allowing the wealthiest to live out their fantasies.
If some entity, be it the government or some other institution, is to take the responsibility of redistributing wealth by any means (taxation, welfare, rent control, etc.), does not that institution then bear the responsibility of determining what is equitable? Does this change over time?
And doesn’t that institution also bear the responsibility of the generational social and cultural impacts?
Does wealth redistribution reach stasis at a standard of living that is lower than is currently achievable? Does the golden goose eventually stop laying eggs?
Social engineering experiments can have many unforeseeable impacts - both good and bad. There is no guarantee that the ultimate results will be better than the starting conditions.
Whatever is done, it should be done slowly and under controlled conditions so that the impacts can be measured.
( submitting this as a reference to Piketty's whole school of thought not just the latest book )
( Discussion prompt: what are some radical ideas for slashing poverty/inequality globally in 2 decades or less - assuming the public support/political will can eventually be obtained through effort/luck )
Radical solutions elicit radical response, and are rarely warranted.
See for example the French Revolution. Millions of unnecessary deaths due to political repression and wars. And then, 80 years after it all started, finally achieving democracy. All because those in charge at any given moment cared more about their ideas than people.
If you think we can achieve utopia if only everyone signs on to your wonderful idea, it's a sign that you are not only wrong, but should seriously seek counseling.
1. Rule of law / a set of laws that are enforced equally upon all citizens regardless of wealth or social status.
2. Elimination of usury applied to the money supply of the country in question. That is, issuing money without having a central bank charge interest on the issuance.
Reduce rent seeking, promote local agriculture university outreach programs, gently trim back on waste, promote competition in stagnated fields.
There’s not a radical solution where something bold needs to be done. There’s a lot of mundane progress that needs to be done, but before it’s done it needs to be identified and prioritized.
100% inheritance tax on any estate value over $N (inflation indexed), use that money to fund "baby bonds" to give every newborn an investable trust fund.
Nobody should get to be rich because of who their daddy was.
I feel like this approach can run into some problems:
1. Some people physically or mentally can't contribute to to disability or some other disorder.
2. Some people can't contribute because they were not provided with/are not provided with the opportunity to gain those skills.
3. It's very, very hard to quantify how much one contributes to society, especially when a task requires lots of people doing small things, or few people doing big things. Pay offers some signal for this in some cases, but at best it's talking about the economy - itself a proxy of society which layers on its own incentives.
I'm raising these three points because I know that if I were to respond with "That seems unfair and it's not the sort of society I'd like to live in" the counter response to that would likely be "we should aim for equality of opportunity, not equality of outcome". The point of my comment is to effectively say that it's very hard to measure opportunity and outcome when one takes into account individual circumstances, and it's even harder to get to the root of what we mean by 'equality' (mathematical equality? qualitatitve equality? quantitative equality? equality before the law?).
This equating of what-you-put-in to what-you-get-out is a moral choice you can make, but it's easy not to make it. It's widely recognized as hateful.
- people's particular successes depend onthw rest of society, they didn't create everything themselves. This should factor into the deservingness calculation.
- we have an instinctual desire to take care of the needy (children and elderly in particular); not to honor this would be inhuman.
- and: why? Why be so selfish, when you have the option to love others and be kind to them? What are you really getting out of it? Rewarding yourself, your whims and appetites... It's stupid. It's hollow, and contemptible, and childish. You can be so much better than that.
To add to your point: In order for something to be unequal, it had to be obtained via unethical means. This is because the sum of morality of small transactions is transitive. Breaking it down in simple terms: If you voluntarily give your free-earned money to Jeff Bezos, it's an ethical transaction. If millions of people do it, they're all ethical transactions. If Jeff Bezos becomes a go-zillionaire, it's moral and ethical.
Meaning: If you don't want billionaires in this world, you're free to stop giving them your money at any time.
I'm not necessarily taking a position here but this feels you are saying only rich people make things like Starlink and Tesla which I feel is true but also wrong. If there were no billionaires people would still be making companies but you currently only see things like Tesla and Starlink from people like Elon because only he has the money to fight the uphill battle that legally entrenches conglomerates in their position.
Join us in Alabama, where the 1901 constitution makes it impossible to raise local taxes without going through Congress in Montgomery. The industrialists and cattle barons put that there because they are wealthy enough to secure good infrastructure for themselves, but the rest of the state is left behind. Good luck with Alabama public schools, and many local roads are on a 70-year repaving schedule.
It is the amount of inequality that matters. We will essentially never get rid of an exponential distribution of resources, what matters is the exponent, for simplicity’s sake, something the the ratio of wealth of the 20th percentile vs the 80th.
Musk is a bad example, he didn't actually invent or develop those things you mentioned, he just acts as the figurehead. If he disappeared today, the only thing we would miss would be his hot Twitter takes.
> I wouldn't be able to use Starlink or buy a Tesla. So I'm actually better off with inequality
That's great for you (and me). But the overwhelming majority of people on this planet are lower down the stack and can neither afford a Starlink nor a Tesla nor anything even close. That's the problem.
> As long as there's a rough connection between contribution and wealth, I'm happy with the system and any inequality that it generates
There's a level of inequality that is beneficial but then there's a level of inequality that isn't. Just a blanket "inequality is good no matter what" doesn't seem to hold water. Some inequality seems necessary for progress but inequality also seems fairly undemocractic, if we're not all equals why do we have a political system that acts as if we should be (or works better the less unequal we are).
That's a catastrophically flawed line of thinking. How can you quantify a person's contributions to society? You certainly can't do it by their ability to generate wealth as you seem to imply.
You would be able to use the alternatives though. The Ayn Rand idea of the entrepreneur or the investor as as the only true value creator is complete and utter BS. By value created, Linus Torvalds and RMS should be the world's largest billionaires (or Norman Borlaug, or any other example that comes to mind). But they aren't, because actually, we don't live in a meritocracy. Power exists, broken incentives exist, corruption exist because less than 200 years ago we had a whole society running on dynastic wealth and oppression, and acting like that just went away is the ahistorical naivety that the work of Thomas Piketty and other historians and economists are contributing to dismantling.
Elon Musk impulse bought Twitter and has been bullshitting the public for years on the Teslas, bought himself the "founder" title and has become the main marketing tool of Tesla. Going by merit and wise business decisions, I do not think he should have the billions, I think Gwinneth shotwell should.
larsiusprime|3 years ago
1) Rognlie[1] pointed out that Piketty's central premise -- that the returns to capital are growing faster than the overall growth rate of the economy -- falls apart when you properly account for asset class and depreciation. The accelerating returns are specifically to real estate, while the returns to capital (excluding real estate) are flat.
2) Tyler Cowen pointed this out on his interview [2] with Piketty and Piketty essentially conceded the point.
Tyler implied therefore that the natural conclusion is Georgism[3]
[1] https://www.brookings.edu/bpea-articles/deciphering-the-fall...
[2] https://conversationswithtyler.com/episodes/thomas-piketty/
[3] http://gameofrent.com/content/is-land-a-big-deal#a-brief-rec...
whakim|3 years ago
Also, non sequitur: while I enjoyed A Brief History of Equality, I feel that it tried to stuff too much historical detail into so short a work - it reads a bit like a condensed version of Capital and Ideology. I found the most enlightening parts of Piketty's previous works involved the tracing of political and economic minutiae across time and space, and I'm not sure I would have actually enjoyed A Brief History of Equality if I didn't already have that background.
colinmhayes|3 years ago
whenUacct|3 years ago
He’s still just one man. There’s no need to listen to him.
I’d rather listen to the majority who are being fleeced by thought ending men like Rognlie. “Oh but don’t think to change things; see look here is other math!”
Humans don’t exist in a vacuum of externalities; Rognlies advice makes it seem so. Fidgeting with the numbers doing nothing real for the people in need is no different than “thoughts and prayers”.
Story mode still rules, as we keep setting aside work of value to people for the story of how some people earned their status. I don’t care what Rognlies credentials are; he’s one of seven billion.
I applied my masters in elastic structures to design power distribution equipment for people. Rognlie sits and pontificates. Screw him.
criticalkoala|3 years ago
[deleted]
epgui|3 years ago
That's really unfortunate, and results in a lot of non-self-aware political bickering.
tharne|3 years ago
That's really unfortunate, and results in a lot of non-self-aware political bickering.
twblalock|3 years ago
We now see this kind of thing even infecting our education system, and it's driving a lot of liberal people to the political right. Look at how Asian American voters acted in the recent San Francisco school board recall, for example. (Also: try telling those people that their success in our society is due to luck, even though they came here in poverty and were discriminated against every step of the way...)
tschwimmer|3 years ago
That said, I do wonder if we're looking at inequality (or more specifically hierarchy) through the wrong lens. It seems like almost all independent societies naturally develop some sort of hierarchy (chief, priest, leader) without any outside influence. To me that points to some underlying natural law or at least a biologically-influenced tendency that higher level social constructs will be ineffective at changing.
wizofaus|3 years ago
ryanschneider|3 years ago
endisneigh|3 years ago
- If you don't allow foreigners, I'll argue that you haven't solved anything. You've simple picked the winners.
- If the ratio of inequality is disrupted, I'd also argue you haven't done anything other than move the problem (and the losers) to the future.
- If you decide not to redistribute, well that's the current situation for better or worse.
Personally I think a better problem to solve is for humanity in general to decide what the minimum level of prosperity should be, worldwide and slowly try to raise this bar. AFAIK this is basically what we're doing. We could raise the bar faster, though.
PeterisP|3 years ago
Policy is decided, implemented and evaluated on the level of societies, not on a global level. We have no global government, and the only global cooperation is voluntary, with wealth redistribution only happening as much as one society arbitrarily chooses to spend on charity and foreign aid for another. Social policies are not implemented worldwide but rather by some society for its own benefit, and if some policy makes a society successful, that's a great policy for that society. Leaders in democratic societies are accountable to people of their society about ensuring that their needs, desires and choices get met, they are not accountable to humanity in general but rather the people they represent, and in general these voters give a very limited mandate to sacrifice prosperity of their society to "raise the bar" of worldwide prosperity. If the society chooses to make policies that benefit everyone else, great, but if it does not, then the policy is good if and only if it fits the choices of that particular society. We can make a strong argument that there is a moral imperative not to harm other societies, however, ignoring them is an acceptable 'default' state of noninterference.
If doing something allows you to "pick winners" so that all of your society are winners, that would be great (certainly better than what we have now) and would have effectively solved things that matter for that society, even if it does not extend to the world beyond its borders.
mijamo|3 years ago
rgrieselhuber|3 years ago
moistly|3 years ago
jschveibinz|3 years ago
And doesn’t that institution also bear the responsibility of the generational social and cultural impacts?
Does wealth redistribution reach stasis at a standard of living that is lower than is currently achievable? Does the golden goose eventually stop laying eggs?
Social engineering experiments can have many unforeseeable impacts - both good and bad. There is no guarantee that the ultimate results will be better than the starting conditions.
Whatever is done, it should be done slowly and under controlled conditions so that the impacts can be measured.
cee_el123|3 years ago
( Discussion prompt: what are some radical ideas for slashing poverty/inequality globally in 2 decades or less - assuming the public support/political will can eventually be obtained through effort/luck )
tomohawk|3 years ago
See for example the French Revolution. Millions of unnecessary deaths due to political repression and wars. And then, 80 years after it all started, finally achieving democracy. All because those in charge at any given moment cared more about their ideas than people.
If you think we can achieve utopia if only everyone signs on to your wonderful idea, it's a sign that you are not only wrong, but should seriously seek counseling.
shrubble|3 years ago
2. Elimination of usury applied to the money supply of the country in question. That is, issuing money without having a central bank charge interest on the issuance.
I am sure there are more.
larsiusprime|3 years ago
https://www.gameofrent.com
https://progressandpoverty.substack.com/p/norways-sovereign-...
https://slimemoldtimemold.com/2022/05/17/norway-the-once-and...
colechristensen|3 years ago
There’s not a radical solution where something bold needs to be done. There’s a lot of mundane progress that needs to be done, but before it’s done it needs to be identified and prioritized.
ForHackernews|3 years ago
Nobody should get to be rich because of who their daddy was.
unknown|3 years ago
[deleted]
xhkkffbf|3 years ago
[deleted]
claudiawerner|3 years ago
1. Some people physically or mentally can't contribute to to disability or some other disorder.
2. Some people can't contribute because they were not provided with/are not provided with the opportunity to gain those skills.
3. It's very, very hard to quantify how much one contributes to society, especially when a task requires lots of people doing small things, or few people doing big things. Pay offers some signal for this in some cases, but at best it's talking about the economy - itself a proxy of society which layers on its own incentives.
I'm raising these three points because I know that if I were to respond with "That seems unfair and it's not the sort of society I'd like to live in" the counter response to that would likely be "we should aim for equality of opportunity, not equality of outcome". The point of my comment is to effectively say that it's very hard to measure opportunity and outcome when one takes into account individual circumstances, and it's even harder to get to the root of what we mean by 'equality' (mathematical equality? qualitatitve equality? quantitative equality? equality before the law?).
sixo|3 years ago
- people's particular successes depend onthw rest of society, they didn't create everything themselves. This should factor into the deservingness calculation.
- we have an instinctual desire to take care of the needy (children and elderly in particular); not to honor this would be inhuman.
- and: why? Why be so selfish, when you have the option to love others and be kind to them? What are you really getting out of it? Rewarding yourself, your whims and appetites... It's stupid. It's hollow, and contemptible, and childish. You can be so much better than that.
exabrial|3 years ago
To add to your point: In order for something to be unequal, it had to be obtained via unethical means. This is because the sum of morality of small transactions is transitive. Breaking it down in simple terms: If you voluntarily give your free-earned money to Jeff Bezos, it's an ethical transaction. If millions of people do it, they're all ethical transactions. If Jeff Bezos becomes a go-zillionaire, it's moral and ethical.
Meaning: If you don't want billionaires in this world, you're free to stop giving them your money at any time.
Entinel|3 years ago
HarryHirsch|3 years ago
colechristensen|3 years ago
zach_garwood|3 years ago
paulette449|3 years ago
That's great for you (and me). But the overwhelming majority of people on this planet are lower down the stack and can neither afford a Starlink nor a Tesla nor anything even close. That's the problem.
> As long as there's a rough connection between contribution and wealth, I'm happy with the system and any inequality that it generates
I'd love to know how you define "contribution".
s-lambert|3 years ago
CraigJPerry|3 years ago
That's a catastrophically flawed line of thinking. How can you quantify a person's contributions to society? You certainly can't do it by their ability to generate wealth as you seem to imply.
LightG|3 years ago
Which, if you accept that, rather undermines your entire point.
unknown|3 years ago
[deleted]
blurbleblurble|3 years ago
baq|3 years ago
see also charlie munger's famous quote - 'inflation is how democracies die' - and inflation is something that makes poor poorer and rich richer.
igorkraw|3 years ago
Elon Musk impulse bought Twitter and has been bullshitting the public for years on the Teslas, bought himself the "founder" title and has become the main marketing tool of Tesla. Going by merit and wise business decisions, I do not think he should have the billions, I think Gwinneth shotwell should.
pasquinelli|3 years ago
criticalkoala|3 years ago
[deleted]