Poverty is profitable to other people. People who are in poverty often have to depend on services that are overpriced and predatory. From check cashing services, and payday lenders, to not being able to go to a grocery store where prices are better, but instead depending on smaller stores of convenience where the prices are often higher. The lottery depends on those in poverty. Sometimes I think even the police and city governments depend on people in poverty to pay a large portion of fines.
Of course they do. IMO towing (especially here in SF where the price for getting your car towed is astronomical relatively speaking), lottery, all those types of gov't fines are really just a tax on the poor. If you're well off you don't really give a damn about getting your car towed a fee here and there, besides the inconvenience, but for someone who depends on their rinky-dink car to get to and from work, getting towed and having to pay a fee that is in some cases equivalent to the value of the car itself basically just fucks their entire life up.
I agree completely on the towing. On the one hand I think the entire process of towing is rigged and corrupt, but on the other, I think it's enforcement is completely uneven and absolutely targets low income people.
If you haven't seen it, look up the Last Week Tonight on municipal violations and prepare to get angry.
However there are a few things that are more explainable than others; check cashing places exist because banks are not designed for the poor at all. Thankfully this is, I think, going to change in the next few years what with all the startups cropping up to offer financial services to lower income people, since most of the shit the banks charge fees for is because they rely on antiquated processes and management that can be automated.
Sometimes I think even the police and city governments depend on people in poverty
You're right, but I don't think anyone has mentioned another big profiteer, the welfare bureaucracy itself. The government pays people to remain in poverty, and everyone employed in those programs is profiting from poverty and is incentivized for it to continue. So are the politicians who create these progams. It also contributes to the inflated the rents that the subject article complains about.
Those people could just as easily be employed in other domains. This is all the more true when their income is conditional upon a centrally-managed stipend like all government employment is.
While plenty of money comes from businesses serving (or disserving) poor people, even more money comes from businesses serving wealthier people (with some portion of those services also qualifying as rip-offs).
The problem with the article is it makes the implication that the money made by vulture capitalists in poor areas is the biggest motivation for the existence of the poor.
But one can see a much larger beneficiary. If a company that automated a factory or moved a factory to a different region or country had to pay to support the wages of those workers it left behind, the costs of automation and mobility of capital would be much higher. Thus the ability of the poor to exist, the condition of each worker being on their own even if suddenly all the jobs in a given area dry up, is tremendously profitable to the largest industrial companies in the world.
> even more money comes from businesses serving wealthier people
Not really. It depends on the country. Some third-world countries have most of the population in poverty, so in that case capitalists can make a lot of money from poor people and have no incentive to do otherwise.
People in city government absolutely depend on the poor and fine-based revenue. To use a recent example, the Department of Justice found the government of Ferguson colluded to give so many fines that they actually became a substantial and essential part of the city's budget.
"For years, Ferguson's police force has meted out brutality, violated civil rights, and helped Ferguson officials to leech off the black community as shamelessly as would mafia bosses...
"Ferguson officials repeatedly behaved as if their priority is not improving public safety or protecting the rights of residents, but maximizing the revenue that flows into city coffers, sometimes going so far as to anticipate decreasing sales tax revenues and urging the police force to make up for the shortfall by ticketing more people. Often, those tickets for minor offenses then turned into arrest warrants."
Sure they would. People will do almost any job, if they're paid enough.
This is why military contractors in war zones, Arctic crab fishermen, and prostitutes make a lot of money.
This is econ 101; supply and demand. You know it too. You're (presumably) not impoverished, but you'd work in diamond extraction or a clothing sweatshop, if you were paid enough.
If there was no other source of clothing, you'd be willing to spend crab money.
In fact, this was the case during the industrial revolution. A pair of pants would cost a full week's wages. This is why people back then owned like 2 to 4 outfits.
It's amazing how many people just can't comprehend how the world can realign so different things become 'normal'. Like, "nobody would ever pay that for clothes". What, you think they'd go naked if there was no alternative?
Yeah but you're talking about an entirely different market. Cheap clothes exist because of volume sales, if shirts suddenly costed what they arguably should, the market would shrink a LOT to compensate for the higher cost. If the $5 shirts at Walmart that parents buy their kids because it has a funny design on it suddenly costed $25, a lot of that business would no longer exist.
>This is econ 101; supply and demand. You know it too. You're (presumably) not impoverished, but you'd work in diamond extraction or a clothing sweatshop, if you were paid enough.
When I say "nobody would do it" I don't mean "regardless of any condition whatsoever". Even if there wasn't poverty involved, slaves would obviously do it too (and they were ones doing such things, historically, right until the end of the colonies -- and in fact still in several places, using various conscription schemes).
Nor did I mean "regardless of working conditions". E.g. if they make it as easy as pressing a few buttons, many would have no issue doing it, even for a low wage.
The idea is that people wouldn't do the job under the current working conditions AND wages -- if it wasn't for dire poverty. "Supply and demand" is not some contradiction to that, rather it is the very mechanism required to take advantage of dire poverty to give those wages.
And of course "supply and demand" is rarely a "natural" and "neutral" thing -- you can skew it in a thousand ways. From passing special laws to keep people down and prevent development, to killing people's farmlands to make them come to the big industrial city to find some low paying factory job to survive.
I've always liked the idea that you should never turn down an offer or request. Instead, you should name your price. Sometimes that price might be functionally equivalent to turning down the offer, but there's always a tiny chance that someone might agree to your (probably laughably unreasonable) terms.
What you forget is that some jobs just cannot pay enough to make it worth for non-impoverished people. A very clear example is farm jobs in the US. If farmers had to pay real salaries, production costs would go dramatically up. So they depend on undocumented workers. This is similar for the fast food industry and so many other industries that are now operating in third world countries. For these industries, poverty is the natural resource that they depend on. If poverty ended all over the world, a lot of industries would disappear or have to change dramatically to continue existing.
>What you forget is that some jobs just cannot pay enough to make it worth for non-impoverished people.
Of course they can pay enough. Just not when there is competition from other farms using illegal immigrant labor.
You know as well as I that if all illegal immigrant labor simply disappeared, the American farming industry would not just shut down and leave everyone to starve. They'd pay as much as they needed to hire Americans, and consumers would pay as much as needed to sustain that.
Minor nitpick: Prostitutes make a lot? I guess depends on which part of the world we are talking about. I hear you can get them in South Asia for as low as $5. Probably lower.
The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.
Barbara Erenreich's book "Nickled and Dimed" [1] is a good illustration of how lack of cash forces the working poor to make economically sub-optimal choices.
An example will suffice: without the savings needed to put down a security deposit for an apartment, you are forced to leave in cheap motels (absent options like living with others or in a shelter), even though the monthly rate is higher. There's no kitchen in those motels and you may be working multiple jobs, which limits your ability to cook nutritious food and eat cheaply. And the cycle continues.
Some of the stories in George Packer's "The Unwinding" [2] emphasize how narrow the margin of error is. Everyone makes poor choices from time to time; those with resources (financial & social) can weather them.
And Scratch Beginning by Adam Shepard is a good illustration of how a hard working person can work his way from homeless to middle class in under a year.
There are apparently good choices and bad - Erenreich illustrates how making the bad choices keeps you poor, while Shepard illustrates how making the good choices can you out of poverty.
This is an excellent point. Another one in a similar vein is things like appliances or other big ticket purchases. The wealthy (or even middle class really, assuming any are left) is that they can buy a new washing machine for example when they're on sale. The poor essentially need to keep using the same washing machine until it dies, at which point either they need to go to the laundromat or buy a new one, and they have to get whatever one Home Depot has at the time at whatever price they're marked at.
How much risk-adjusted-reward is there in loaning Vimes money for the boots? Or in loaning him money for an annual bus pass that saves him 10% over a monthly bus pass?
People in poverty use services and consume goods. Someone provides those goods and services. Would they be better off if every business closed their doors to the impoverished, so as to not "make a buck off the poor"? Of course not!
The trailer park owner in the article owns 131 units and "makes" (presumably grosses) $400K a year. Those units are about $250 per month, hardly the stuff of Viking-style pillaging, IMO. The other landlord has also built herself a business in real-estate and now can afford to take a vacation? Good for her, seriously. She's providing housing and her tenants/customers are providing her income. Building such a business (and I assume running a 131 unit mobile home park) is absolutely work, the value of which is evident by the paying tenants.
About the most you can do is try to claw-back your training expenses if they don't stay for a certain number of years, but you can't squeeze blood from a stone. That money was already spent on basic necessities of life and can't be recovered.
>That money was already spent on basic necessities of life and can't be recovered
Presumably, if the training were significant enough to be worth the company pursuing it and the now ex-employee found it economically better to use those skills elsewhere, then there might be significant enough income against which to make a claim.
If this worked you'd think it would be more widespread, but instead corporations have consistently pushed in the opposite direction with workers over the past few decades. There used to be a lot more job security, on-the-job training, and apprenticing. Corporations have figured that not having all that stuff is in their favor as by only hiring qualified people they can put the costs of the training on the employees, and then if there aren't enough qualified people, well, off-shore production.
No, it's not. And, I wouldn't dismiss out of hand what can be "enforced by contract law". The contract itself represents the willingness of two parties to adhere to certain terms. If a company pays you a million dollar signing bonus and asks you for a three year commitment, then you should expect them to demand that bonus back if you leave in two years for reasons not set forth by the terms. And, you should expect claims of "indentured servitude" to fall on deaf ears in court. You can leave. You just can't keep the money.
Similarly, companies wouldn't enforce that the person continue to work for them; simply that they must repay their training costs if they don't.
This is currently done by some companies, for instance, with MBA sponsorships. They're sometimes called "loyalty contracts".
This will be abused. Mcdonald's will say that it's 'training' cost 10 grand and keep people on low wages without any recourse for the entire term of the contact. Rinse, repeat.
That's specious and unrealistic. Nobody's buying that it costs $10K to train on fries or any other low-skilled position.
These would be voluntary programs for skilled jobs that require training. No one would be obligated to sign up, and no one would voluntarily do so without obvious benefit.
Subsidized, cheaper or government housing through legislation.
> Have you started to raise funds to start and run that business?
No, because the incentives to continuously draw a greater profit from your customers goes against the need to provide housing to those who can't afford it.
1. Let a non-profit run those kinds of businesses. The non-profit , before starting would establish clear rules that prevent eviction, discrimination and the other nasty stuff. Financing should be gotten from institutional investors, by promising some fixed rate of return.
2. Let the government run that, it works pretty well in many places around the world , in creating a relatively stable living environment.
Get some land off from the existing land-owners who have it in excess over some threshold (by legislating some "ceiling on land-holding" act). Of course, that should not be done entirely in the "communist style" though, i.e. it can be done by giving them reasonable compensation.
I guess, some "ceiling on land-holding" act is a must if we want reasonable check on inequality. Currently the US economy stinks of the problems of feudalism - some kings and barons with a lot of land and then some more people down their rank with some land while the rest of the people with almost no land and perpetual poverty.
I am not saying "Land Value Tax", which basically is a levy on the "unimproved" value of land.[1]
What I am saying is nobody (including corporations) should be allowed to own land for the sake of renting purposes. If you own more than a threshold, you should just hand it over to the government, for some compensation and then if you think you have any excess land left over that you can rent, you should just sell it.
In short, no renting of land at all.
I know, there are some issues to it, but I guess, those can be resolved, without much harming the economy of the 99.99% of the people.
Please correct me if I am wrong w.r.t. "Land Value Tax" vs "ceiling on land holding".
What is the alternative? These people aren't forced to live there. If there were a cheaper, better alternative available to them, they'd probably take it.
Nobody is 'profiting from poverty' here. These landlords would make much more money if these people were wealthier! I'm sure they'd love to make nicer places and charge higher rents with higher margins, but they can't, because that's all these people can pay.
> The landlords chose their market, not the other way
> around.
That goes against.. almost all economic thought.
You don't choose to make umbrellas for the umbrella market, and just keep churning out umbrellas, perpetually disappointed by the fine weather.
This market is profitable, but if it were wealthier, it would be more profitable. There's no incentive for a business-owner in such a place to somehow keep the locals in a state of poverty.
>You don't choose to make umbrellas for the umbrella market, and just keep churning out umbrellas, perpetually disappointed by the fine weather.
You do if people keep buying them, irrespective of the weather.
You've misread my comment. I'm not saying that the landlords create the market; simply that the landlords chose a market that requires less capital outlay, and also with full knowledge that the market is not typically upwardly mobile.
In other words, it's fairly rare that landlords buy mobile parks with the intent of later upgrading their customers to upscale condominiums.
If a landlord is about to chose a market that requires less capital outlay it's because there is an unfilled need in that market. Without the lower cost housing the tenants will only have fewer options, potentially more expensive ones at that.
If all of the needs are filled and somebody else decides to target the market then they have to find a way to disrupt it, in this case that probably means figuring out how to reduce costs and charge less.
Except your fantasy of a free real estate market doesn't exist. FED policies, by their own admission, serve to artificially drive up real estate prices, which punish the poorest, who don't own property and are forced to rent. This is a direct subsidy to property owners with the size of the subsidy equal to the amount of property owned. These FED efforts (MBS purchasing, ZIRP, suspension of MTM, QE1-3) to prop up housing also inflate equity and bond markets, further subsidizing the wealthy (while those in poverty who own no stocks or bonds fall further behind).
Not sure about the Fed, but plenty of UK politicians own buy to let property, so hardly a free market when they have such vested interests in keeping prices high.
We've gotten off track. I'm not arguing whether the market exists or how basic economics in a perfect market work.
If you look back at my original comment it's WRT the assertion that these landlords would love to upgrade their properties and charge higher rents. I was simply saying that's largely untrue. These landlords are aware of the market dynamics/demographic when choosing to invest and have little-to-no desire to "upgrade for higher margins".
They would have that desire if all their tenants were suddenly wealthy enough to pay those rents, was my point. Which speaks to the broader point that these landlords are not working to keep these people in poverty.
All of those tenants suddenly becoming wealthy enough to pay higher rents is a magical hypothetical that undermines the basis of this discussion. Someone else on this thread said it succinctly:
"If this market were wealthier it wouldn't exist"
That is exactly right.
The landlord would be more likely to wait for them to move elsewhere and just await more customers for their current offering as long as the market was there. This, rather than outlay the capital to upgrade the place; else the landlord would have likelier invested in a more upscale offering to begin with.
Likewise, depending on the degree of increased wealth, the tenants may well prefer to move. Slums and trailer parks generally don't have a tendency to just "happen" in otherwise affluent areas. With increased options, renters would likely desire better surroundings, schools, ownership, etc. vs new granite countertops in their double-wides.
Of course for this same reason, landlords don't want to risk upgrading beyond what can be recovered in a reasonable time by rents that the market will bear. No amount of upgrades is going to make more affluent buyers with other options move to a mobile park.
People are suggesting here that the landlord would upgrade because it's economically rational to collect higher rent, while simultaneously ignoring much of the actual economic reality here.
Again, I'm not claiming that the landlords create the market. But they are under no delusion when they invest.
If this market were wealthier it wouldn't exist. The tenants would be getting mortgages or renting nicer apartments, not living in trailer parks. And, because governments like to have higher income residents, they would have more choices of where to live, as trailer parks are exiled to the fringe. Some of these market dynamics exist precisely because these people are poor and the landlords have no incentive for their customers to be better off, just like Walmart would not be better off if its customers got more money and started going to Macys.
> If this market were wealthier it wouldn't exist. The
> tenants would be getting mortgages or renting nicer
> apartments, not living in trailer parks.
No, because the cost of building, maintaining and keep in a state of compliance a housing lot is superior to the increase in rent. Sleep dealing is a lucrative job.
There are many factors explaining this : reduced access to law for the poorest, lack of alternatives, but also social perception of the tenants and of their worth, or the cognitive bias displayed by many about homo economicus.
> What is the alternative? These people aren't forced to live there. If there were a cheaper, better alternative available to them, they'd probably take it.
You need money to buy into a housing cooperative, and even more to start one (i.e. build a whole new apartment building). The poor people who are renting the apartments in the linked article don't have it; they are living paycheck to paycheck, and frequently falling behind even on that.
I'm not seeing a workable alternative beyond government-provided housing, but that doesn't have a good history of success in the US.
Let's for a second assume that people stay in the same house for 30 years[1]. Why can't they just purchase the house cooperative slowly with each rent payment ?
My grandma in Israel paid rent in a public housing that had exactly such an arrangement, and after becoming a pensioner, she was finally able to purchase her house. And i have no doubt such arrangements are one reason why Israel, a nation establshed from poor immigrants did quite well for both economically and socially for relatively long.
The people in the linked article are frequently moving between housing, though. If they had thirty solid years of employment lined up they wouldn't be in their situation to begin with. What you're proposing is rent-to-own, which the vast majority of people would never make any headway on.
What about adding something like transferable shares mechanism - so so you could use your ownership stake in another house if you want you need to move?
Maybe it worked for Israel, because it was run by politicians who cared about their people and not by those who cared for the interests of mainly the mega-corporations (e.g. USA) or the interests of mainly the party-workers (e.g. USSR).
Such schemes from government are a must.
They are much better than "welfare" which just encourages people to be lazy.
Edit: added about "welfare".
It worked pretty well in the USSR - housing was generally not a problem. Heck even after the collapse of the USSR economy, people still had a place to live. Can you imagine how hellish it would be if it happened in the US , when everything is private and most don't own?
What are you even talking about? Apartments in USSR were infamously hard to get, and even now, significant part of tge population lives in dorms, communal apartments or in buildings too dangerous to live in. Plus, USSR has a long tradition of several generations of the same family living in the same apartment together, a room per family.
Largely because of the "Dodd-Frank Wall Street Reform and Consumer Protection Act" of 2010.
That's right, government protecting the people again; in this case, lease-options or lease-purchase agreements with a financing component where the purchaser is living in the property during the term are now deemed consumer financing arrangements (rather than real estate financing arrangements), which are subject to review by the then-newly-created Consumer Financial Protection Bureau.
It all but dried up the willingness of sensible sellers to write lease-options on property where the lessee would live in the structure. Yes, there was some amount of fraud and exploitation under the old laws as well, but now that entire mechanism was closed off to property owners willing to sell and [typically] working-class families looking to buy.
This is interesting. A quick search turned up an article [1] that outlined some of the difficulties with lease-to-own residences I wasn't aware of. However, the CFPB is likely on the losing side if the leases are structured as short-term rentals, terminable at any time, as Rent-A-Center has done [2]. This type of consumerism is likely to be self-correcting over generations of time; I'm seeing far less participation by Millenials and younger generations for this consumerism than older generations, by simple virtue of the fact that they are quite drained of financial resources and growth potential by the time they graduate. If this trend is real and continues, then the velocity of money could seem great while juiced by the Fed, then drop like a cliff function when demographic realities trump monetarism and lack of fiscal policy changes in the US.
No, I think it's much worse than that. There's a general sentiment that triple penalties are applicable (or a danger at least) if a seller is remiss in qualifying the lessee/optinee at the time the contract is struck. The idea being that if a few years down the road, the lessee can't qualify for a mortgage and loses all their option premium money, they've been taken advantage of. So, the only safe thing is to underwrite the lessee for a mortgage at the time the contract is written.
Hint: most of these people can't qualify for a mortgage, otherwise they'd just buy outright.
Franky, the FHA should be writing mortgagees, not Joe Sixpack Seller Financing. Seller financing is more often than not used just as rent-to-own furniture stores are: rent seeking of the poor, with them losing their entire invested amount when they hit a financial hiccup.
For some reason I'm reminded of the old joke: a Keynesian and a rat-ex theorist are walking down the street. "Look," says the Keynesian, "A twenty dollar bill!" "Can't be," says the other economist. "If it were there, someone would have picked it up already."
Here's the thing: being a slumlord is profitable. Yes, your tenants don't pay much, but if you don't improve your property, ignore complaints, refuse basic maintenance and throw everyone on the street if they're a day late on the rent, your margins are excellent, far better than you'll make with decent apartments where people demand things like legally-conformant housing and nonabusive contracts.
These are tenants who don't have recourse, or at least not easy recourse, to the legal system, so cold water flats, no A/C or furnaces, black mold, and rats and roaches are part and parcel of the slumlord experience. Of course, all this is illegal, but slumlords tend to have a lot of free cash to throw at local politicians and attorneys, and if they own a large number of single-family dwelling it's hard to track down and deal with every nonconformant property.
You made a huge leap from "running a trailer park" to "being a slumlord", and you also implied but haven't answered the question of who is to pay for mold remediation etc when the tenants can't afford to make it profitable. Surely landlords can't be compelled into their own poverty , forced to rent units below cost. Such a price has to be paid by society/government overall, or not at all.
Forced to rent below cost, no, but if they can't make a profit out running a business that works within the law they shouldn't be engaging in the business.
No one is forcing these property owners to "rent units below cost;" they set the rents on their houses and apartments. The issue is that many of these people buy properties that are out of code with no intent to improve them, and then rent them anyway. Yes, it's not economically-rational to rebuild them. No, it's not the government's fault that the slumlord's business model depends on flouting code and safety violations.
The simple answer is that if I can't afford to maintain a minimal level of environmental and residential standards, I'm not allowed to rent out my property. Likewise, I can't buy an empty lot, fail to maintain it to code, and then offer a defense that it's too expensive to keep it up. Governmental police powers are quite adequate to compel compliance.
All this is quite separate from the other point you bring up, which is that affordable and decent housing is going to require socializing costs. In fact, there's no reason government shouldn't engage in more public-private partnerships to help fund affordable housing as part of mixed-income residential planning. But I don't buy the argument that minimal living standards are an unwarranted intrusion on the liberty of rentiers -- and I dont think you do, either. If payday loans can be deemed predatory, can't "environmentally hazardous" rental units also be?
>The simple answer is that if I can't afford to maintain a minimal level of environmental and residential standards, I'm not allowed to rent out my property.
That's all well and good, but what happens to the people who are renting there, and what happens to the people who can't afford a place with "minimal level of environmental and residential standards"? Will those people be better off sleeping rough?
no I'm sorry, I live in a house that was a damn luxury a 100 years ago and it's still a pretty fine house today. The houses described in the article would probably look pretty good compared to the poor housing of a 100 years ago, but not like any sort of luxury. The "look at those big screen tvs the poor have" argument does not translate well here.
Indoor plumbing came to rural America in the 1930s.
Electric lighting came to cities in the 1920s.
Electric appliances were rare in the 1920s, even in cities. The first self-contained electric refrigerator was invented in 1923. (Ever wonder why your grandparents probably still call it "the ice box"?)
Cold running water was probably available, but water was still heated by the stove or fire in most places. (The single-lever faucet was only invented in the late 1930s.) Rural water supplies were still via manual wells.
Heating systems were commonly manually fed by coal with no thermostatic control.
A modern small home, with electric lighting, an indoor flush toilet, a refrigerator and other electric appliances, hot and cold running water, thermostatically controlled HVAC, microwave, and cable TV? Absolute luxury compared to the typical house built and lived in in 1916.
My house (a quite respectable house built in the mid-1920s in Cambridge, MA) appears to have originally been fitted with a coal furnace and has had electric lighting retrofitted (originally had gas lighting). An oil furnace was retrofit in 1937. It seems to have had flush toilets from the start.
I guess I will accept those as a list of luxuries that are available now that would have required servants to match before 1916 ( I guess if you had servants the hot and cold running water, the refrigerator and microwave were matched in utility - and servants are a luxury.)
However there are a number of luxuries that have not increased in these years that are pretty important, such as personal space and privacy, my house and I suppose yours have this luxury. The houses I grew up in, and which poor people are living in now, often do not have these luxuries.
There is another thing that it seems was not a luxury in 1916 and is becoming now, relative freedom from the threat of eviction. According to the article there is a greater deal of eviction of today's poor than there was in the past, and I think that luxury might be really important if you have children. Important enough that I would be willing to trade indoor plumbing, microwave and TV for it, maybe some other luxuries if I was given the tools to make up for them (tools like ice delivery and so forth).
Finally given the low quality of poor people's housing not all of these luxuries you list can be counted on as being available, if for example the heating breaks it might take months to fix etc, so the luxury at the level is highly variable.
Is it fairer to compare not the hovel of today against those of decades past, but the hovel of today to a satisfactory house today? The occupants of today's hovel are competing with the occupants of the decent home, not their ancestors.
If we hope that they might compete fairly to improve their lot, are they started well behind in a house with failing power, or heat or cold that keeps them awake or sick and so on?
Without a fairer playing field, they can fall further behind.
A satisfactory home that complies with regulations would ideally allow the occupant to get a decent sleep, prepare food healthily and present themselves appropriately for work.
Adam Smith, father of free market economics, pointed out already 300 years ago the fallacy of this argument. He has a passage about how an Englishman was expected to wear leather shoes while a frenchman could walk barefoot without being ashamed. Further he talks about how in his day a linen shirt if considered a necessity even for the poor while the ancient greeks and romans could do well without it.
So the point is that following your reasoning there is really no end to the depravity you can reach and somebody would still be able to claim that is all fine, because only rich people in the stone age could afford such luxury.
The point Smith made was that poverty is always a relative phenomenon. What is a necessity is always defined in terms of the society you live in. There is no such thing as a universal definition of necessity.
I had an interesting conversation about this with my wife's American parents. Despite the fact that her parents were noticeably better off economically in their childhood than my parents, they felt a severe stigma of poverty my parents never felt. My parent grew up in a country where they were much the same as everybody else. In fact a little better off. They did not feel poor at all. They had a happy childhood both of them. But one of my wife's American parents had a bad childhood, plagued by a strong feeling of being lesser than everybody else. Never having people over on visit out of shame over their own poverty. She was used to seeing everybody else being better off and internet the idea they they were somehow lesser people.
Today my home country is richer than America by GDP per capita but comparisons of wealth and of people's feeling of wealth or poverty is difficult. Many of my american relatives enjoy bigger houses and cars than I do, but one always gets the feeling that their life is much more of a struggle than mine. I live in a smaller house and have no car. But I have no financial worries like them. I have long vacations, I am not constantly overworked. I don't worry about health care insurance, saving for college education to my kids, getting fired.
So I think one should have some respect for the desperation and despair the poor in America feel. Knowing that a surprising car repair or medical bill could send you onto the street in no time. Even poor in much less wealth western countries have to deal with quite that level of insecurity.
Poverty may always be a relative phenomenon (even in Cuba) but there has been no better system to lift people out of the life-threatening effects of abject poverty than capitalism. In fact, you cannot have a success with socialism without a large number of wealthy (or well-off) people to tax, and a society cannot tax itself to prosperity.
> I live in a smaller house and have no car. But I have no financial worries like them. I have long vacations, I am not constantly overworked. I don't worry about health care insurance, saving for college education to my kids, getting fired.
In America, we trade stability for social mobility (probably truer before the WWII), and our government promotes car and home ownership, but I doubt those were tradeoffs you made for longer vacations and "free" health care and education. We became more socialist and fascist after WWII and during the Cold War, but we've still managed to maintain steady income growth for average Americans, despite what the media would have you believe with "household income": http://politicalcalculations.blogspot.com/2012/12/the-discov...
Poverty will always be with us, but there are plenty of things our bureaucrats can give up to fight it better. Our federal government has more or less the same number (very few added in the last 100 years) of representatives despite our population tripling. This system has become more susceptible and beholden to corporate interests, including media corporations that promote stories like this one and the problems and divisions in our society without any context of our achievements and commonality. This promotes bandaid and politically expedient half-measures that only make the problem worse in the long-run.
> In fact, you cannot have a success with socialism without a large number of wealthy (or well-off) people to tax, and a society cannot tax itself to prosperity.
And you can't have success with capitalism without a healthy and prosperous working/poor middle class to be your consumers.
I'm thinking of democratic socialism. It's capitalism with a heavy emphasis on welfare and super strong social safety nets.
If you look at the quality of life index (the "where-to-be-born" index), you'll see that the top 10 countries all employ a form of democratic socialism. That's saying something right there.
Of course not. But neither is it all or nothing; slum or safety net. My point is the root cause needs to be explicitly identified before it can be rectified. The root cause in this case is America's fetishism for small government and smaller taxes.
Sort of. Also that for some reason, the government can print money to bail out banks, but when it comes to fixing housing and actually help people, it has to come from taxes. I don't quite understand this.
ALL of the government spending has to come from taxes eventually. It can come today or tomorrow. It can be raised smartly or stupidly, but it's going to come from taxes one way or another.
Depends on how you define taxes. Also, some governments own assets and use returns from those.
(And just to be pedantic, historically there's also spoils from conquest.)
There's also government debt. I know you could argue that this has to be paid back eventually---but when interest rates are below inflation, that's a better than free loan. (And in theory they could invest in assets that yield even more, instead of just consuming the difference between inflation and interest.)
Most people buy government debt out of their own volition even at these low rates. (And if it's foreigners buying it, there's even less direct coercion via regulation involved.)
Woah, I'm not from America, but that seems really wrong. More taxes and bigger government does not create any sort of extra benefit for the poor - the extra taxes will simply go to creating more levels of indirection and inflated prices in existing government.
Why do you think anything with a government stamp is automatically 10x the price? It's not because of people wanting smaller government. Smaller government is about localizing procurement down to the smallest workable level.
Making a huge tender to build these environmentally safe houses for everyone would mean only the biggest and most expensive companies could compete in the 10 year long bidding process. Making a tender for 10 houses for the local poor in your village would be free in comparison, and those 10 houses would be ready before the poor die of old age.
> Why do you think anything with a government stamp is automatically 10x the price?
In general, yes. But not in the best run governments---Singapore comes to mind.
(But even Europe isn't quite as bad as the US. American public procurement---especially for infrastructure projects---is truly hideous and expensive by global standards.)
The Swiss seem a good model if you are looking for how localized government can work.
>But even Europe isn't quite as bad as the US. American public procurement---especially for infrastructure projects---is truly hideous and expensive by global standards.
I don't understand why that is. We paid ten billion dollars to replace the SF Bay Bridge, and it took forever. Now we're going to spend seventy billion for a train that goes from nowhere to nowhere, and very little is actually going toward construction itself.
Is it the cumulative effect of regulations, or the price of labor, or corruption? Something else?
Labour is expensive in American, but not 10x more than in Europe. You also got corruption, but you got that in Europe, too. Especially southern Europe---but Spain is still not a bad as the US at building public infrastructure.
There's some special American factors. One is that your population, and by extension the lawmakers they vote for, don't trust the bureaucrats at all, and thus make try to micromanage the public servants with laws that remove discretion. These laws are intended to remove opportunities for corruption, but they also remove opportunities for common sense.
For example, in most of the US they have to award public contracts to the lowest bidder---no matter how likely the awarders think the lowest bidder is going to overrun schedule and budget.
I've read a bit about these problems (and my summary above is from memory). Even lurking on HN, this topic comes up from time to time in the comments.
My point is it's immoral to turn people out of their dwellings unless you've provided them a place to go. It's all well and good to say they should have public housing, but until they do have public housing "slumlords" are providing them a place to live.
Don't get me wrong, i'm not saying it's not plenty profitable. I only mentioned the higher rents thing to illustrate the point that the landlord does not have an interest in keeping these people poor.
This article is suggesting that these landlords are causing poverty, but then it goes on to not even try to make that case. They may be making money from poor people, and they may even not provide them the level of service they are legally required to, but this article makes no actual case for them causing or being any real part of the poverty cycle. Unless of course you think that the mere fact of asking that their rents be paid is the problem - and if you do, fine, but you're then tasked with proposing an alternative way of housing these people.
>This article is suggesting that these landlords are causing poverty
The landlords are causing poverty by increasing rents to the maximum level the market will bear, removing money from the system and - usually - moving it offshore.
Because slum property is so immensely profitable, there's no incentive whatsoever to invest the profits in anything riskier. So you end up with wasteful non-projects like this:
Meanwhile renters see their disposable income - in fact their economic freedoms - eroded until they can barely afford housing and food.
You now have a deflationary cycle where it becomes harder to find customers for new businesses, and harder to find investment because investors don't believe customers are easy to find.
Of course it's not just landlords. But generally economic cultures are designed to be favourable to either increasing or decreasing economic freedom for the low-paid. And if it's the latter, the predictable result is massive inequality and a deflationary uncontrolled descent into terrain which not only does the poor a lot of damage, but also eats away at the sustainable economic value of the assets of the rich.
If this had any economic truth to it, there would be a market in undercutting these overpriced rents. If this were true at all, you should go to your local bank, get a loan, snap up some property, and undercut your local slumlord by 10%.
By your logic, you'd have plenty of profit to spare, and you'd be providing an enormous social good.
But my guess is that you will not do this. And you will not do this because your analysis of their margins and business is not actually correct, and you and everyone else in the market knows this.
Also, you always get to keep the security/cleaning deposit, and if you have a lot of churn, you get to collect an extra month's rent every few months -- another great incentive to evict people.
>> What is the alternative? These people aren't forced to live there. If there were a cheaper, better alternative available to them, they'd probably take it.
What sort of lame excuse is that for exploitation? "These people could be much
worse off if they were being exploited more"? Well, duh. The point is that
they're in a dire situation in the first place because they're being
exploited. Their landlord is not some benevolent benefactor, he or she is the
purveyor of their misery, that's the only reason why he or she has a say in how
deep that misery is.
By analogy, imagine you grab someone off the street and beat the shit out of them.
You break their ribs, kick their teeth in, bash in their skull, but stop just
short of killing them. Then you go "hey, it could be much worse: I could have
killed you".
Well, yeah, you could have. You could also have avoided attacking them in the
first place. They're not "better off" thanks to you, they're much worse off than
they could have been because of you.
So what you are, in effect, saying, is that these poor people would be better off if the owner of the trailer park would kick them all out? Then they would not be "exploited".
I am inclined to believe you are a troll, because the distinction between an aggression of violence and a voluntary free exchange on the market is quite easy to make, which in your argument you fail to do.
If every time you took an ambulance you were forced to sign over 80% of your wealth or be left to die in the streets in a 'voluntary exchange', that would be exploitation.
The difference between that and slumlords is simply a matter of degree.
Desperation is the route to profit in both cases. Truly voluntary exchanges without gaping chasms of systemic inequality do not provide opportunities for sustained profit.
I get the point in your scenario. The simple matter of "degree" in this case might be simple but it is very big. First of all, i would say that your scenario is unrealistic. It is made up and it would never happen in actual real life. First of all, what psychopaths would leave a dying man, woman or child like that? Also, how would these ambulances get customers? Thirdly, who would sign up for their ambulance service? Yes, if we accept your premise of a society where this psychopath ambulance service has a monopoly and everyone is forced to use it, then sure, it is exploitation. But on the other hand, someone with authority has therefore sanctioned this psychopath monopoly ambulance service. Where did this authority get this mandate? Democracy? If you want to argue that this scenario would happen on the free market, i would like to see your arguments to why this ambulance service would still have customers.
If you control the premise of the arguments, it is easy to "win".
The largest fortune in the Roman empire was amassed in almost exactly the same manner (Marcus Linnus Crassus - he ran a fire service).
Desperation is a rich source of profit. Neoclassical economics, instead of analyzing this sordid detail, masks it with assumptions.
That's why you view it as an unrealistic scenario despite the massive amount of historical precedent. Under econ 101 models (perfectly equal wealth; perfectly competitive market) it is an unrealistic scenario.
>If every time you took an ambulance you were forced to sign over 80% of your wealth or be left to die in the streets in a 'voluntary exchange', that would be exploitation.
What is wrong with this scenario? If there were no ambulance service I automatically choose "Die" (which is, apart from matters of inheritance, always the wrong choice), but if there is the ambulance service I can buy my life for the relatively meagre price of 80% of my wealth, then having neither children nor wife I would take that deal ten times out of ten.
I don't see the false dilemma, I think you're hinting at a third choice where the ambulance company charges a price that is not extortionate, but if that was part of the hypothetical then, sure, I would have chosen to get my emergency care from the company that charges less (but it's not, the GP postulated that all ambulance companies charge 80%).
Either way it's not exploitation, even if there's a company that charges prices that always bankrupt their patients, I still choose broke over dead, and if I wanted to choose dead I can do that too.
All prices, everywhere, are limited in some way by the cost of a torches-and-pitchforks mob to storm the chateau.
I'd pay the price on the spot, because I like not being dead. But afterward, I think I'd try to rob that guy to get my 80% back, and maybe some of the 80% from some other people. That's not a "thank you so much, you're my hero" price. That's a "better watch your back" price.
When too many people start to see you as a parasite upon their community rather than a foundation pillar for it, they will certainly reduce their rate of cooperation with you, and some may retaliate. You may have to acquire a taste for other people's spit in your restaurant food, for instance. And worst of all, you may motivate someone to launch a business in direct competition with yours.
Then, if your choice is 80% to the dirty exploiter or waiting a few more minutes for a Medic-Uber to pick you up take you to the hospital, you would almost have to be gushing blood from a major artery to accept the former.
In what sense is their landlord purveying their misery? They need a place to live. The landlord offers such a place. They enter into a voluntary exchange of domicile for cash, terminable at any time.
Where is the exploitation? Nobody is being tricked or duped. Two people are coming together to exchange something without coercion, intimidation, or trickery.
>In the sense that he or she is charging 70% of their monthly income for rent.
No. He or she is charging an absolute amount, not a percentage of their payslip.
>And it's coercion alright if the alternative is being left homeless.
Coercion /koʊˈɜːrʃən/ is the practice of forcing another party to act in an involuntary manner by use of intimidation or threats or some other form of pressure.
There is no coercion here. Poor people are not mindless sheep, they have their own will, their own goals and their own plans. If they live there it is because they chose it. Not the landlord, and not "the rich".
>> He or she is charging an absolute amount, not a percentage of their payslip.
Here's another analogy. I make this beautiful and unique item that you want to buy. I charge - literally - an arm and a leg over it. Like, the actual body parts.
You protest: "You're asking for a part of my body??". I reply "I'm asking for an arm and a leg, not a part of your body". Hey, maybe you can pay me with someone else's arm-and-a-leg, right?
That is how absurd it is to say what you just said.
>> There is no coercion here.
Yeah, there totally is. It's the same kind of coercion the Mafia employes. "You don't want to pay us to protect your establishment? Well, fine, but then something may happen to it".
You don't want to pay 70% of your income to stay at my dirty, dilapidated hovel? That's fine, but then you might find yourself homeless.
The tactics are similar because the mindset is similar. Pay up or else. It's exactly how it works and it's precisely why it's coercive and morally repugnant.
More to the point: I find it morally repugnant because I don't have to pay 70% of my income to stay at a trailer, and I make probably 70 times more than the people who are forced to live there. There is no excuse for that. If I payed 70% of my income to live in a shithole, then I would think, OK, that's how it goes. That's life, see?
Except, it's not. I know it's quite easy to get a much better deal, as I got. If someone forced me to live in such conditions, I'd be up in arms. Therefore, I also do mind a lot that other people are living in such conditions.
That is not coercion. You fundamentally misunderstand (or apparently disagree with) literally all of western philosophy and economic thought if you think that charging rents in a voluntary exchange is 'coercion'.
The simple fact is that, over many thousands of years, humans have evolved a system of voluntary exchange. And we have found that that system produces the greatest benefit for the largest number of people as compared to all other systems we have tried at scale. This means that those with property rent their property to others so that they may live there.
If you don't allow the owners of property to rent their property, then there will be no homes for anyone. If you do not allow people to own property, then property will likely not be put to its most productive use (see: communist russia, china, north korea, etc.).
If you'd like to propose a better system, i'm all ears. But until then, you need to accept the hard reality that there is no better solution for these people, and that an offer like "pay 70% of your income in rent" is something that they have the right to accept.
To suggest that these people are being exploited when they are entering into such an agreement is to suggest that they are incapable of agency, and to deny them the most basic of human rights.
>> You fundamentally misunderstand (or apparently disagree with) literally all of
western philosophy and economic thought if you think that charging rents in a
voluntary exchange is 'coercion'.
On the one hand, to say that with any authority you have to be a, well,
authority, on "western philosophy and economic thought" or at least to have read
it. All of it. Have you?
On the other hand, I'm not conversing with "all of western philosophy and
economic thought" here. I'm disagreeing with you about a very specific thing, which btw is not at all whether "charging rents in a voluntary exchange is a coercion". That's your interpretation of my comments.
What I find coercive is charging someone 70% of their
income to let them live at a shithole with the unspoken threat of them becoming
homeless otherwise looming over their head. Not to mention the threat
of kicking them out if they complain about the state of the property, or if
somebody calls the cops on them, and so on, as the article reports.
The people who rent those properties, far from being "free agents" as you
pretend they are, find themselves in dire economic straights and with extremely
limited options. They are under immense pressure to find a house and grave
consequences if they can't pay the rent.
If you consider that "free agency" then you might as well consider extortionate
lending, such as practiced by loan sharks, with the threat of having your legs
broken by thugs if you can't pay, to be a fair and acceptable exchange.
I don't know what "literally all of western philosophy and economic thought"
says about extortion, but I do know it's illegal in most of the world- and for
good reason.
Loan sharking is not extortion, and neither is the renting of property. Let's not confuse our terms here. Extortion is unrelated to either of those activities.
The premise of your argument fundamentally rests on the idea that these landlords are choosing to charge "70% of their income to let them live at a shithole". But is that true?
Do the landlords have much of a choice in this matter? We can see with a simple thought experiment. What would happen if they were to lower their rents?
I'll tell you. They'd get more customers. Their vacancies would quickly be filled, because they'd be cheaper than the 'shithole' next door. And if they are already full, then all they'd need to do is keep building new shitholes until they can take all their competitors tenants too.
So, then. The obvious question: Why doesn't this happen? Why don't all these slumlords recognize this obvious opportunity for massive profit? Why don't you or I build a shithole of our own and charge only 60% of people's income?
And the answer is simple: Running shitholes costs 69% of the income of those monthly tenants. Charge any less and you're losing money. If you do not believe this to be the case, then by all means, start your own shithole and charge less. Let me know how that works out for you.
That doesn't make it coercion. That is just enforcing the agreement that was entered into voluntarily. Or do you think the poor should be exempt from rent?
OK, say those "exploitive" businesses didn't exist. That doesn't subsequently mean "non-exploitive" alternatives would exist, it just means those customers/employees would have no options (not even "exploitive" ones). Is having no option better than having a bad option, when good options aren't available?
I mean, it's all about "for whom" in this question. What's better, widgets and a polluted stream, or no widgets? Depends on whether society values the fish.
That doesn't subsequently mean "non-exploitive" alternatives would exist, it just means those customers/employees would have no options (not even "exploitive" ones).
The hidden assumption here is that producing the goods and services required to keep a single human being alive in relative comfort (fed, sheltered, educated, healthy) necessarily requires an expenditure of manual effort roughly equivalent to what that human being can do.
Or, in other words, the assumption is that it is not and never can be the case that N people can be provided for by the effort of K people, where K < N.
And yet that assumption is obviously false: we have, here and now, the ability to feed, shelter, educate and provide health care to every single human being on the planet, and the ability to do so without the need for many of them to work for it. In the western world this has manifested in the explosion of service-oriented industries and administrative roles, which are essentially make-work jobs to give society as a whole the feeling that people are "earning their keep". Even among these affluent, supposedly highly-skilled people, probably the majority of the jobs are simply unnecessary.
What's needed is a realignment of our mentality about work: now that we have the ability to provide for everyone, we should simply do it regardless of whether everyone works or not. Will there be free riders as a result? Sure, but they're not actually a problem, and become less of one with every passing day (since the system that produces the necessary goods and services continues to grow in efficiency), and we just need to get over our fear that someone, somewhere might manage to have their needs provided for without working for it (we're already content to do this when someone inherits sufficient wealth to live without working, so this would just be an extension of that attitude: people living now and in the future will "inherit" the wealth of the past of the human species and be provided for out of it).
Or, in other words, the assumption is that it is not and never can be the case that N people can be provided for by the effort of K people, where K < N.
This attitude is terrifying. As a matter of policy, you would have me work as a slave for someone else or in turn, benefit from the slavery of others? It would be total war first.
Isn't Communism very similar to your perfect world? All the people were provided for and they worked for everyone and everyone was equal. However, that didn't work out too well.
In any system, some folk will always squatter and some will always attempt to gain power/advantage.
The thing to realize here is that the number of humans who need to do work building/operating/maintaining the machinery that keeps everyone taken care of decreases over time. It's perfectly reasonable to expect a point in the future where most of the time, zero direct human work is required in order to provide for all humans.
The issue is getting over the mental hurdle of enabling such a society. The technology is actually pretty straightforward, but the politics of it is full of people who just can't stand the idea of that filthy leeching parasite, he doesn't work as hard as I do, why does he get anything at all! He doesn't deserve it! Which in turn is an artifact of an economic system that's already firmly in the past of many developed nations (i.e., one in which all people needed to work constantly in order to produce enough to keep themselves alive).
Of course this is a fundamentally irrational position to hold when one already lives in a society that's content to let people who never work a day in their lives have all their needs taken care of (see: inheritance). It also disregards the fact that many people who have everything literally handed to them from birth still feel a drive to try to do something meaningful with their lives. There are trust-fund parasites who don't do anything, of course, but it certainly isn't 100% of them. Plus, it's pretty well empirically established that humans do get bored and seek things to do even when they have no life-sustaining work left to perform (see: retirement).
I think we're already past that point, if we define "provide for all humans" as "provide shelter, food, and clean water." However, "provide for humans" is a moving target which is actually interpreted as "provide a living standards not significantly worse than average." These days that includes providing running hot/cold water, range of healthy food, air conditioning, electricity, TV, internet, some form of motorized transport, health care, clothing, etc. etc."
Frankly, I don't see that this is perfectly reasonable to expect. TANSTAAFL. Food still has to be produced. Energy still has to be produced. All that stuff has to be paid for somehow or the producers stop producing for the freeloaders.
What you think of as a mental hurdle I see as a way of discerning what is mine from what is yours. Show me a developed nation where a person actually doesn't have any personal property.
Without personal property rights, people will stop producing for others and society will fail. Why would I be willing to trade my load of firewood to you for your butchered hog? I'd just take your hog and not bother with providing you a share of firewood. And, in that system if you came around to get a share of my firewood, you'd disappear.
I believe that if a person doesn't have their needs met, they just don't deserve to have them met. (I'm not talking about a moralistic judgement here. Its more like the universe has just arranged itself in response to the unlucky person's actions.)
For example, 3 years ago, I got a hammer and a saw and started building a shed. I sold it and bought the materials to build another. I sold that one too. Today, I own a company that manufactures sheds and employs a few people.
I'm now much better off than I was because I decided to take advantage of people willing to buy my product. I now have employees who build my buildings and I profit from them, too. Is this a bad thing? I don't think so, because several of my employees were unemployed and needing work when I hired them.
What's fair about Capitalism is that anyone has the opportunity to make something work. If a person doesn't want to take advantage of this and better their lot, then I believe they have no right to bitch about us making money and having nice things. Let them suffer paycheck to paycheck.
Food still has to be produced. Energy still has to be produced. All that stuff has to be paid for somehow or the producers stop producing for the freeloaders.
The question is: what happens when most or all of the food and energy is being produced not by human labor, but by fully-automated processes? Why would, say, a farming robot care whether someone is "freeloading" off its labor?
What you think of as a mental hurdle I see as a way of discerning what is mine from what is yours. Show me a developed nation where a person actually doesn't have any personal property.
The idea of a post-scarcity society is not incompatible with the idea of personal property. It is incompatible with continuing to believe that basic necessities such as food, shelter, water, medicine, and possibly other things should be apportioned on a "did you earn it" basis, because that notion dates to a time when it truly was necessary for each person to put in continual effort to ensure enough of those things were produced. These things are no longer super-scarce and no longer require anywhere near the effort to produce that they used to; society should adjust in response to that change.
There is no logical reason, if the capability exists to automatically produce sufficient basic necessities for every human being, why every human being should still have to do a make-work job in order to prove they "deserve" those things. And you could still have all the capitalism you like for anything that isn't a basic necessity; the basic life doesn't have to be one of luxury, just one free from worry about things like food and shelter; the currency of such a society would need to be tied to something other than control of basic-necessity resources, but finding alternative bases for currency is something people already do for fun.
Food still requires valuable farmland, water, energy, fertilizers, pest control, capital to buy and expand the automation, operating costs and labor to repair and oversee the operations. It's an enormous amount of initial capital investment and a massive on-going operating expenses, and that's just for basic farming.
Now, add all the post-processing and transportation logistics after the food comes out of the ground to get to basic staple ingredients. Then add all the preparation activities, cooking, and packing to get to the Hot Pocket/Pop Tart level of salable food (or food-like) product.
Watersheds need to be protected; water needs to be treated, tested, stored, and pumped under pressure through a distribution network of pipes. Sewerage needs to be piped in the other direction, treated, and disposed of.
Electricity needs space, energy input, capital, and opex and a distribution network that needs on-going maintenance and repair. Gas lines need a lot of the same. Internet distribution needs...
Medicine needs space, energy, [lots of] people with specialized training just to apply the state of today's art. It also has a large research and development component responsible for ensuring that we aren't still using leeches to treat "Bilious fever".
> Why would, say, a farming robot care whether someone is "freeloading" off its labor?
The obvious rebuttal is that someone has to build and maintain the farming robot, so this is the guy whom you would be freeloading of.
On a more general note: The concept of property only ever arises because of scarcity. For example, you wouldn't describe yourself as owning the air in your apartment, since there is ample air. A diver, on the other hand, would definitely declare ownership in the air in your air bottle.
So how can we implement a post-scarcity society? My best guess would be to work on affordable technology that makes basic things like water, food, clothes or internet access not scarce anymore.
"Post scarcity" only exists and continues because of continued efforts which continue only because of reward/profits. No profit => no effort.
The other problem is what constitutes basic necessity. I can build you a "human terrarium" of 100 sq ft, HVAC, clean water, disposal, and 4 bottles Soylent per day - leaving you 18 hours daily to procreate & demand more. What is the limit to your demands? You have ample opportunity & resources to earn your own survival with ease; now you demand I provide your total basic survival needs from my own efforts, taking what I would give my own offspring - ENOUGH! BEGONE!
"There is no logical reason, if the capability exists to automatically produce sufficient basic necessities for every human being, why every human being should still have to do a make-work job in order to prove they "deserve" those things. And you could still have all the capitalism you like for anything that isn't a basic necessity; the basic life doesn't have to be one of luxury, just one free from worry about things like food and shelter; the currency of such a society would need to be tied to something other than control of basic-necessity resources, but finding alternative bases for currency is something people already do for fun."
Well, let the people who live on welfare invent and create the machines that will give them free food, water, heat and living space. They surely have a lot of time to devote to that, not having to work for a living.
It's not awesome, it's poison. Cooperation > competition, and artificially forcing everything to be expressed in terms of the latter is cancerous to society. Ignoring conscience and empathy is wasting the in-born qualities that allow us to be more efficient in groups.
The same problems that plague capitalism plague communist implementations.
In power structures, things are great if you're part of the class that receives political favors and not so great if you're not.
In capitalist societies, capital owning classes have the time and resources to be the political class. In previous communist societies, party and administrative members were the political class.
"In capitalist societies, capital owning classes have the time and resources to be the political class. In previous communist societies, party and administrative members were the political class"
This sounds like theory. In practice, capitalism beats communism in pretty much every way. Of course there are people that own capital. Private ownership is one of the main tenets of capitalism.
Capitalism works because it is on the correct side of human nature. It pushes people to earn more capital, which in turn, helps the rest of us.
Do you think our technology would have advanced this far if we didn't have capitalism? The only reason computers, phones, the Internet are getting better and better is because of competition. The more competition in a market, the cheaper the price is to us, the consumer.
Communism, on the other hand, makes everyone a slave to the state. Why would you want to compete and earn more when it will just be taken away from you by the government?
There were many experiments in the 1970s with communism. People created their own small communities and shared everything. Everyone was equal. The end result was always a disaster: jealousy always fueled the collapse of the group.
Would you want the person in school that never studied for his tests and partied every day to earn the same amount as you, who studied for every test and did well? I sure wouldn't.
Communism, in any form, is a failure. I don't know how much death, poverty, and famine we need to go through for some people to learn this.
Communism is much more focused about workers and equality. Just providing the bare basic needs for everyone, without expecting them to work or live in a certain way, is a very different concept. What if all basic goods can be produced with hardly any human labour? A rich enough society can be so far beyond those basic needs that forcing anyone to work for survival can only be explained as a form of punishment.
>Isn't Communism very similar to your perfect world? All the people were provided for and they worked for everyone and everyone was equal. However, that didn't work out too well.
A system where everybody was equal was never tried.
A system where the necessities were guaranteed was tried - in the Soviet Union - and it was, by and large, very successful.
It was successful enough, in fact, that Western elites responded to it in the 50s by implementing similar guarantees - NHS, social security, medicare, etc. (McCarthy's witchhunts and the Vietnam war weren't the only responses to communism).
What made the Soviet Union finally unable to keep up economically was the prohibitive cost of the arms race and declining oil export revenues, not the lack of capitalist profit motives.
I really don't think the UK NHS was created in response to anything the Soviet Union did - the Labour movement in the UK had a long history long before the Soviets were around.
The NHS actually shows the power of democracy over an elite - after all the 1945 election removed Churchill and voted in the socialist Attlee government. Attlee was so effective as a leader that even Thatcher spoke highly of him:
'Quite contrary to the general tendency of politicians in the Nineties, he was all substance and no show.'
Do you think the fact that the UK NHS funding model closely followed the existing Soviet NHS model was a coincidence?
The Tories fought long and hard in the 40s to make the proposed new 'cover everybody' system insurance based (something like Obamacare I guess) and ultimately didn't prevail. They used all sorts of scare tactics that would seem very familiar today.
A large part of that failure was Labour being able to point to the Soviet Union (not yet enemies of the highest order) and go "look, we can achieve the same success in curing infectious disease that they did".
No. Welfare programs are not communism or socialism. The single defining characteristic in both ideologies is the degree of which labor owns its means of production (the resources, facilities and tools needed to do a job).
Welfare programs do not even begin to touch on who owns the means of production.
Communism implies a stateless society after a period of power by labor that is devoid of private ownership of the means of production. Supposedly, this transitionary period should do away with class. According to theory, once class is no longer a factor, the state is no longer needed.
Welfare programs, again, do not touch on this at all.
The reason "we have, here and now, the ability to feed, shelter, educate and provide health care to every single human being on the planet" is precisely because of capitalism: it's worth someone's time & resources to produce so much so efficiently. If those producers stopped, lacking incentive, global starvation would occur in about a week.
A key point you miss: wealth is perishable. Food rots. Weeds grow. Machines rust. Buildings crumble. Durable money is inedible, useful only when exchanged for something perishable.
You really need to read Atlas Shrugged. Comes a point when us producers get sick of you looters, and drop out of society. I'm already feeling enormous strain from my 30-50% tax bracket (most going to a welfare system you want), and debate switching lifestyle to the self sufficient farming I was raised on and which your utopia would receive 0% of.
You are my favourite HN commenter. I frequently have the experience of reading a well-written, insightful comment, looking up, and seeing that it was written by ubernostrum.
Social Security. Unemployment insurance. WIC/SNAP (food stamps). Government mandates affordable housing on major transit lines. Non-usurious Government loans for the working poor, secured against income. Stuff we already do, but should do more.
I think one of the keys would be allowing people to live in improvised housing, a la Brazilian favelas. Loosening or repealing housing standards and property would reduce stress on these people. e.g. let people in bushes or trailers without forcing them out.
second, receiving mail was listed as a problem. how to get people their mail for important papers?
third, allocating land for farming their own food. why should they have to take part in the rest of our food economy if they can't fork over $1.25 for an apple? Just let them tend trees with their time.
fourth: transportation. often you have to get someplace. how can we design public transportation so it gets the poorest where they need to go reliably?
I think it depends. Not having access to temporary credit at all is better than pay day loans. Of course, I'm saying that from my proverbial ivory tower. Philosophically I don't support banning those things, but I'll be damned if they're not fucking evil incarnate.
Not having access to temporary credit means that any hiccup in your finances has you facing eviction, late bill penalties, and in the case of unpaid fines, possibly jail time.
Having access to temporary credit means that same problem, but next month.
Having access to incredibly high interest temporary credit means having the same problem next month and this new problem of having to pay off the high interest credit bill. You're generally not going to be evicted for a temporary hiccup. Late bill penalties are almost certainly going to be less than the payday loan fees. I have mixed feelings about the making bail bit.
My bounced check fee is $30 from my landlord, $30 from my bank.
My late rent fee is $30.
My late utility fee is $5, but if I paid by a bounced check, that would be $35. In other cities, it could be much higher.
The fee for not paying a fine on time can be a weekend stint in jail, whereby you will get charged for room and board.
The fee for not being able to pay for car repairs is losing your job.
The fee for not paying for needed medical attention when you aren't on insurance (Which, despite obamacare, many poor people lack) can be crippling.
Poor people, in aggregate, aren't stupid - they wouldn't use payday loans if the alternatives weren't worse. Yes, it shifts the problem a month out, and puts you in debt for ~$100 dollars. So would juggling your missed payments (Meanwhile, giving you a black mark against your landlord).
That's still better then having the problem today. And who knows? Next month, you may be a millionaire. Or dead. Better worry about that next month.
If you want to kill payday loans, the best way to do that is by giving everyone a living wage/income.
> The fee for not paying a fine on time can be a weekend stint in jail, whereby you will get charged for room and board.
looks at this in complete puzzlement
I'm constantly amazed at just how broken the US system is in almost every possible way.
And just for the record, there is no such thing as payday loans in Europe. At the very least not in Germany. The first time I heard of these was when John Oliver did a segment on them.
I agree poor people aren't stupid, you're projecting that on me. People who go to payday loan places are generally desperate. And desperation can often lead to irrational decisions. It seems like the major contention between us is that you believe that payday loans are good because in a vanishingly small percentage of cases they provide a net good. Virtually all of the data shows that in aggregate payday loans are a net bad.
Payday loans are better than paying for your electricity to be turned on again and to replace all the groceries that spoiled in your fridge, because you were fifty dollars short on your utility bill.
Payday loans serve a purpose. Thinking the poor use them because they're irrational or stupid is just elitist.
A payday loan might have an atrocious interest rate, but it's better than getting kicked out of your apartment because you're $30 short on rent or getting thrown in jail for a parking ticket.
Nope, the payday loan is still a raw deal. You're not going to get kicked out of your apartment for being $30 short on your rent. There's a reason states are cracking down on these pay day loan places and it's not because the government hates poor people.
I don't think providing housing for an average of $250 / month is exploitation or predatory.
In fact, a number of mobile home communities are beginning to cater towards child molesters only, because child molesters need homes too. (also, the police tend to hang around sex-offenders and check up on them, so they also make good tenants).
Win/Win for everyone. Sex offenders get a home, and can start rebuilding their lives (although some sex offenses shouldn't be a permanent black-mark on a person's life, but that's a different story). The entrepreneur gets reliable tenants who are otherwise under-served, and the regular checkups from the Police ensure that the unsavory types stay away.
As long as it is profitable, people will build more homes. And as people build homes, the poor and exploited get a chance to rebuild their lives. Now a serious concern is the businesses who exploit their tenants... but if the supply is high enough then the tenants will be able to find new homes / mobile home communities.
--------------
The main problem are the towns who are making mobile homes ILLEGAL, because they find that poor people are unsavory and the town wants to forcibly gentrify themselves.
Elitists are scared of mobile home communities that explicitly cater to say, sex offenders, or poor people, or other "unsavory" types. Not in my community, hell, not even CLOSE to my community / backyard. Think of the children!
That's the problem. Not the people who are building mobile homes, but the fact that mobile homes are slowly becoming straight up illegal in huge portions of communities.
Do you ever attend a community Town Hall or Home Owner's Association?
Meetings rarely talk about the budget, for better or for worse. You'll get legions of concerned mothers talking about the dirty homeless people at the motels and ways to build fences around the motels to protect the kids... or Single-Family homeowners complaining about the black people in the Apartments (I kid you not)... and setting up cameras or paying officers / security firms to patrol those locations.
But NEVER have I ever seen anyone complain about low-property taxes of a specific unit at a homeowner's association / town hall. Literally never. People don't give a shit about the budget, they're just too far removed to understand that kind of an issue.
Based on my experience, I'm going to call this elitism, not a budget issue.
And the people that provide goods and services now to the impoverished (especially the actual exploiters, like pay day loans and corner stores, and the manufacturers that supply the junk foods they eat and drink) have a financial incentive to keep people in poverty and grow their demographic. Combine that with an very easily corrupted government like the US has now, and you get corporations dictating policy to prevent economic upward mobility and create more poor to become dependent on their products.
I'm not so sure the corner bodega belongs in the same category with the payday loan assholes.
Yes, the corner bodega is more expensive than the full grocery store, but they also probably have way lower sales per hour of labor, lower sales per square foot, lower sales per other overhead (rent, insurance, security, utilities, taxes), higher credit card interchange fees, higher shrinkage and spoilage, and pay more for their inbound groceries than the large chain down the street. If my guesses are true, all of these are perfectly legitimate business expenses and the corner store owner needs a return on their investment, just like the large chain does. (Grocers operate on razor-thin overall margins. Average net margin for the supermarket industry was 1.3%, 1.9%, and "1-2%" in the first three references I could find online.) Anything that increases costs basically HAS to go to the price as there's nothing else left to flex.
Payday jackholes can DiaF for all I care, but even the prevalence of those is driving in part by the banking regulations meant to "punish the banks" which have the effect of making poor communities "money losing to serve". When the predictable bank pullouts happen and payday lenders move in, it's not that hard to see the connection. Let the banks make a profit and they'll serve the community; prohibit them from making a profit and they won't, leaving only the even less savory financial businesses.
That's an excellent point. The lottery aspect does bug me a lot. (Though my "regular" grocer also has lottery, tobacco, and beer/wine, so I don't think the bodega is worse than the other grocers in that regard.)
The lottos are state-run though. Don't blame the bodega owner, blame the government for financially preying on poor people who are bad at math in the first place. I don't think you can really criticize someone too much for selling something that the government plays ads for on the radio.
It's not primarily that people are bad at math. It's that they don't see any other way out. I've seen data that show that people play lotteries "for money" at higher rates the lower their income is. I can't find the exact citation, but here's a CMU article about study that shows something similar: http://www.cmu.edu/news/archive/2008/July/july24_lottery.sht...
We really just need to end state-run lotteries. The problem is that the states depend on this regressive tax for revenue.
One interesting argument I've seen is that there is a serious demand for lotteries and gambling, and that making them illegal won't stop them (as it hasn't for drugs or prostitution). Instead, it just creates a black market for gambling, which is even more problematic than a well-regulated state one with a predictable and reasonable house rake. We may be trying to fight the human psyche itself here, for which making things illegal tends not to work.
But at the very least the states shouldn't be advertising the damn things!
Ending state lotteries is just another form of prohibition. It's part of human nature and population will still end up participating in alternative get rich quick schemes.
Basically, every so many dollars that are in a savings account for a set period of time counts as one ticket, and so of course the way to increase your chance of winning is to "buy more tickets". Winnings are paid out in lieu of interest, but in the end averages to about the same.
> Yes, the corner bodega is more expensive than the full grocery store
All your justifications are reasonable from a business standpoint. But if I'm so poor and my circumstances are so bad that a bodega is the only place I can realistically go for groceries, what difference does it make to me?
This seems to be the exact point of the original article. Someone is making money off of bodegas, just like someone is making money off of gouging the poor on housing or payday loans, and in all cases the added cost can be justified as "perfectly legitimate business expenses." And the poor continue to suffer and bear the brunt.
> But if I'm so poor and my circumstances are so bad that a bodega is the only place I can realistically go for groceries, what difference does it make to me?
You're also still worse off if the bodega closes, right? I think we're just circling on "being hopelessly poor sucks in lots of ways".
Even the payday loan guys aren't that bad, many of their users are people who legit just need emergency cash and will pay it back on their next payday.
Freakonomics did a pretty good episode discussing advantages and problems with it recently.
A huge portion of payday loans are repeat loans from people trapped in a cycle of debt, taking out loans to pay off interest on previous usurious loans.
Yes, payday loans have defait risk, whixh is part of why they are expensive. But that also shows that many borrowers can't acurally afford them. And the cost of defaults is borne by...the next-pooorest people who barely scrape by, who DO lay off their loans, but pay 50-200% APR
From what I've heard it seems like about 60% are completely competent loans. It's those other 40% which are roll overs. Note I'm not talking % of customers here but % of loans. Yeah, 40 is still bad, but there a legit demand too.
Some have suggested that a governmental or other instution needs to be made just to break people out of the cycle and give them a loan at a rate closer to that of credit cards. It's a tricky situation though from a regulatory perspective because you don't want to have those 60% of people who are avoiding massive overdraft fees or dropping credit scores using these services to get stuck with no options.
Personally I think if you sign up for a loan you can't pay, that's on you, not really exploitative as some people seem to propose. Take some personal responsibility, you know?
What's different about the payday loan industry such that the "better to have some alternative than no alternative" argument not apply? Running such a business clearly takes lots of work, and clearly there is lots of demand for the services they provide. What differentiates them from other business that provide "value"?
They take extraordinarily high margins, often involving mis-representation to their customers along the way (largely by illustrating their fees as flat numbers, which obfuscates that if you translate it into actual APR terms - to compare to other lenders - they're asking for what equates to absolutely ridiculous interest rates).
Generally, if there's a demand for a service, people should come flooding in and reduce the marginal profits through competition. In this case, people came rushing in ... and profit margins went up over time. This alone, in a big picture perspective, suggests shadiness (though not by itself guaranteeing it, since you could argue for growth in demand outstripping the growth in supply).
Pay day lenders are required by law to publish APR. The ugly truth at the bottom of it is that their customers base is fundamental to stupid to know what is good for them, or too impulsive to make responsible choices, or too desperate to seek alternatives, or too ignorant to know their alternatives.
Their are some easy improvements (education and outreach and banking programs for the poor and poorly educated) and some controversial ones (removing citizen's legal rights and freedoms to make self-destructive decisions)
I had a friend who worked for a UK payday lending company. The borrowing patterns of customers seemed hard to interpret as being in their long-term interests. Customer retention was too high and borrowing patterns too consistent for the loans to be primarily shielding customers from unexpected shocks rather than just punishing their lack of self-discipline.
The parent companies of traditional banks instituted high overdraft fees and the ChexSystems blacklist to steer poor customers away from checking accounts and towards the check cashing and payday loan companies, which they also own, but which have vastly higher margins on poor customers. At least, this is the claim I've seen thrown around.
I think you're letting off too easy the politicians in impoverished communities who are incentivized to keep their constituencies so they themselves keep their jobs.
Do you have any examples of where Frito-Lay, McDonalds, Burger King, etc. are lobbying the government to "keep people in poverty?"
Edit: and as mentioned elsewhere here, state lotteries are another huge government-authorized program that disproportionately takes from the poor.
I don't see that: they still have to compete with other providers, so they have no incentive to spend their own money to increase the general demand for their kind of service, since their competitors "free ride" off such efforts.
There's a similar trailer park near here. Near the front, by the main road, and where many would loiter hoping someone would pick them up for odd jobs, there was a tiny convenience store; I've driven by there many times and took note of it. One day I drove by: it had been burned down ... accident? arson? dunno. Soon a small travel trailer was parked next to the charred remains, attempting to continue at least some of the services. Drove by again: that too had been burned down ... probably not an accident. Now, years later and quite predictably, nothing has replaced that service though the many still loiter hoping for odd jobs.
So anything that's part of a system that isn't perfectly ideal is unethical now?
There are certain constraints that any large-scale system made of people has to work under, for example the sort of things that make communism not work very well at scales larger than a small commune.
Any localized parts of such a system, need to mesh properly with the larger system.
Much that is demonized as "exploitative" (not all, but a lot of it), seems to only be considered as such because people look at the immediate imperfections, and disregard the problems that would result from attempting to "fix" those imperfections.
I contend that the landlord mentioned is an example of this. You and the poster I initially replied to are providing no substantive arguments against this, but merely implying a lack of critical thought by anyone who doesn't stop their reasoning at the immediate local effects.
> So anything that's part of a system that isn't perfectly ideal is unethical now?
I suspect that the commenter means that any sociopolitical system other than his or her preferred one is unethical, which is what anyone who makes moral arguments for sociopolitical systems (i.e. nearly everyone I have ever met) is implicitly claiming.
Ethics is not binary. It is ethical to provide shelter. It is more ethical to provide shelter without profiting. The landlord has expenses, including perhaps a vacation, but they should be minimized.
I dont have much beef with the trailer park owner in question, but you are simplifying the variables at play. The net win for everyone would be providing shelter at absolute minimum cost, including for the people maintaining the trailers for others. A landlord's profits may stand in the way of this.
Similarly, employees should accept the bare minimum salary they need to live on(perhaps with a modest vacation). Anything above this is unethical, since they are now profiting off of their employer.
In both cases, you are essentially condemning the person to stay in that position forever with no chance of advancement. It reminds me of the parable of the talents[1]; I tend to agree with its conclusion that the guy who manages 30 skyscrapers should be given this recently-built batch of 12 to manage, since he's already demonstrated competence. It's hard to make this actually happen if you take everything he has except a pittance, so his purchasing power is equal to that of somebody who has no business managing skyscrapers.
Why is advancement desirable? Giving people more responsibility when they prove they can handle it is one thing. It's entirely another to equate advancement with monetary compensation.
In general, I believe people should be incentivized with responsibility, which is in everyone's interest. Cash compensation only benefits one person; doubly so when considering the rate of tax avoidance in the upper echelons of income.
Theoretically, some kind of centrally-managed state that did regular performance reviews and allotted you responsibility could work to settle this particular point. I don't necessarily agree with that, but it's a separate discussion and would work purely considering this point.
The United States isn't the right country for such a system, though. You might look at Japan: their corporations motivate people with social status more than money. The CEOs there don't directly make a large salary, and neither do the employees. Really, nobody makes a lot of money in Japan.
I'd be inclined to agree, only on the condition that there's plenty of unused land around, available for next to nothing. If that's the case, this trailer park owner is getting a return on her investment.
However, if there isn't marginal land available nearby, a portion of her return is monopolistic-- the renters have no alternative than to pay rent on this land.
The problem isn't with companies that sell huge TVs to poor people, but with companies the sell huge TVs on credit to poor people with an interest rate of 65%.
There are many other safer cheaper ways to provide this service - "lay away" would be one.
> the value of which is evident by the paying tenants.
That's something I have a very hard time to understand. I mainly see that position on HN. It seems like here the price is always justified and fair because it is sanctified by the free market ideology. Prices should always be maximized because it makes sense for the seller and to hell with global long term consequences.
That is macro vs microeconomics. A business today cannot function in the market behaving morally for the good of society when all its competition is maximizing exploitation even the end result is the destruction of the consumer base they rely on.
The point is to take as much of the cargo as you can and jump ship just before it catches fire and hope to make it out safe at this point, considering the predatory behavior of capitalists in almost every industry and market nowadays.
I didn't downvote myself and also have no intention to further explore the works - awful vague pompous stuff that they seem to be from the few pages I've read.
It's terribly vague and offers no insight as to which things Marx might have been right about. There's a child comment that's a bit better, but it dumps a lot of Wikipedia links out with little in the way of explanation.
In short, on HN it's better if you can explore ideas more thoroughly, rather than simply tossing out short quips and assuming everyone is on the same page.
It would be better to write something along the lines of 'When the article says __, this illustrates what Marx was talking about when he defined __ and that ties in with...' or such so there could be more discussion about ideas and less noise about voting or simple opinions.
> Through his theories of alienation, value, commodity fetishism, and surplus value, Marx argued that capitalism facilitated social relations through commodification and the exploitation of labor.
This is remarkably close to the views expressed in the article, but I guess you're being downvoted because you hit a nerve.
There's no such thing as a Marxist labor camp and I'm well aware of the cluster fuck that every would-be dictator of the proletariat was starting with Lenin. I'mean not a Marxist, and especially not a Marxist-Leninist. That doesn't mean I can't take Marx's economic ideas seriously.
Also, you probably don't care about the fact that there are labor programs at US prisons where workers are paid cents for the hour to do labor. I think your moral challenge is in bad faith.
What shines through here is a lesson not only America has never learnt , but one we in the UK are fast forgetting - social policies work
The social safety net is pretty simple. Bob, A healthy worker is made unemployed, they can either take state assistance and find work 6 months later, leading to another 30 years of tax revenue, or let them default on mortgage, spiral into poverty and no tax. Now extend that so Bob needs six months rehab.
Housing built, owned and managed by the state (or so closely regulated it may as well be) has been a cornerstone of the social safety net. This article underlines that.
Of course it profitable, which is why we have things like minimum wage - if WalMart et. al. could, they would pay 3 cents an hour, or even better consume peoples living and eating and entire lives like factories in China.
At some point the governments in developed countries have stepped in to set some kind of limit on what's "reasonable".
IMHO, they're not doing enough in America right now, the enormous social divide is showing that to us clearly. Developed countries that have stronger laws have less people in severe poverty, because the government forces the wealthy to distribute their wealth.
Don't you want to get the highest salary for a particular job? Don't you want to pay the lowest price for a particular product? Employers are just doing the same.
So what if WalMart wants to hire someone for 3 cents an hour? Maybe I'd like to pay my doctor $1/hr. Either way, it's probably not going to happen. People will not accept $0.03/hr for a job unless it is of benefit to them. Also I find it incredibly condescending to believe you (or the government) know the opportunities available to people in poverty better than they themselves do.
Lastly with regards to 'government forces the wealthy to distribute their wealth', wealthy people generally have quite a few options, to include the option to exempt themselves from paying what some would consider "their fair share".
While not 3 cents an hour currently Walmart pays wages below the cost of living. How do they achieve this you ask? The government steps in and raises these wages with a number of social programs (food stamps, housing subsidies, tax credits, etc). Cut the social programs and those workers won't be able to afford coming into work. Pretty soon, up goes wages.
if WalMart et. al. could, they would pay 3 cents an hour
Sure. Of course they can't, because most of the time even poor people have other options. Also WalMart has in fact supported raising the minimum wage, which is either a virtuous act of corporate responsibility or an attempt to increase the burden on their competitors.
because the government forces the wealthy to distribute their wealth
I just finished my taxes. Quite a bit of my wealth is being "distributed", unfortunately mostly to well-off retired people and on bombs to drop on the Middle East.
> Sure. Of course they can't, because most of the time even poor people have other options.
If there were no laws, every company would do this, and there wouldn't be other option.
You think people work in factories in China for $0.50/day even though they have an option to make a good wage?
> Quite a bit of my wealth is being "distributed"
Not nearly as much as if you lived in another developed country, where your money would be paying for healthcare for all, higher education for all, etc. etc.
What you've just said is pretty much identical to "if there were no laws, every company would charge $1 million for every product and there wouldn't be another option".
Do you realize how utterly ridiculous that sounds?
You really think the only thing preventing a company from paying employees $0.03/hr is a law? Minimum wage in SF is $12.25. By your logic, I should expect every employer to pay no more than $12.25/hr. Why do I not see this?
> "Not nearly as much as if you lived in another developed country, where your money would be paying for healthcare for all, higher education for all, etc. etc. "
Really, you're going to trot out American healthcare? There is no place on earth with higher healthcare costs than the USA.
The profitability of poverty is foundational to how capitalism works. Workers work, heirs do not. How do heirs manage to expropriate wealth workers create during their surplus labor time? The answer is the reserve army of labor - keep people unemployed or underemployed as a level to use against those who do work.
One sign of this is that unemployment did not even exist several centuries ago in any kind of manner - all those who were capable (except again, those on top expropriating wealth created during worker's surplus labor time) worked.
This is openly discussed in the business press, like this (http://www.businessweek.com/1999/99_44/b3653163.htm ) BusinessWeek article "When is the jobless rate too low?" It's not a secret that those who control production are working to create unemployment, poverty etc. It's a foundation of the current economic system.
There is definitely a set of people for whom reducing poverty is not profitable. Unfortunately in SF you see this coming from a number of non profit affordable housing developers as well as tenants rights advocates who are often the loudest voices opposing adding housing supply and even fighting legislation for density bonuses for developments that include a high percentage of affordable housing. It took me a really long time to understand that actually fixing the housing problem inSF would mean that they lose a ton of government grants and that the executives of these orgs who often make over 200k would all lose their jobs. So it's not just in the private market- it's definitely the non profit sector too.
Wealth isnt about money, its a measure of your ability to buy other peoples time. Until every person on this planet cant afford to buy more of other peoples time than they sell to others you will have lower class, middle class, upper class.
What if poverty is profitable to the government? What if, through welfare, the government encouraged single motherhood, and thus poverty, and thus dependance on the government?
What if single mothers were held responsible for their choice to have children with bad men?
Children will suffer either way. You can accept a relatively small amount of suffering and address the issue in the here and now (stigmatize the women, pose alternatives like adoption, thus set an example of what not to do) or you can go the other route (make excuses, subsidize their behavior) and end up with a massive self-perpetuating culture of single motherhood, dysfunction, and criminality in the long run. We're currently seeing the latter. If you thought eugenics was terrible, consider what the opposite would look like.
Those are just two ends of a spectrum. There are plenty of ways to address this. Personally, I'd immediately end the drug war (thus massively alleviating single-motherhood in black communities) and look into changes to divorce/alimony law and the family court system. Ending the aforementioned subsidies referenced by the OP would be massively beneficial as well. Unfortunately there are a lot of entrenched interests associated with everything I've just mentioned, so barring some sort of catastrophe, I suspect a cultural/social approach (e.g. stigmatization) is likely to be the most immediate and realistic place to start.
Without welfare, the mother would likely give he children up for adoption by responsible people that can afford them. At least she would have that choice, and the choice to raise the children in poverty, thus causing them to suffer, would still be hers.
They aren't? If you can find the stats for non-white newborns I'd read them.
What kind of empathy does a mother have for her child that would raise him without a father in poverty? What empathy does a single mother have for the people from whom she is taking money in the form of welfare?
Judging by the responses to my "boilerplate," inluding yours which consisted of a run of the mill ad hominem attempt to shut down the conversation by white knighting, and others which were non-arguments and sarcastic these are not arguments that people have considered.
You mean in a country where birth control is not free and where you can have to drive 500 miles to get an abortion if you live in retarded states like Alabama or Texas ? Yeah, sure, blame the poor.
When I was in high school, I wrote an inventory-control system for a rent-to-own business, which rented TVs and furniture to poor people. It was an extremely exploitative business, and 100% of their customers would have been better off doing without & saving up some money for 4-6 months to buy a used or new whatever. I'm now ashamed that I didn't walk out the minute I figured out how the business worked.
So, just over $3kpa each. Not a lot. It only sounds like he's profiting a lot because nobody would do that unless at scale - i.e. have 131 of them.
At those margins (I don't know what the costs are, but with that little annual profit per trailer it really doesn't matter) there would be no reason to not want the poverty-stricken to have more money, other than perhaps an unwillingness to change business model. The profit margin is just _so_ much greater on more expensive properties.
With 131 properties she probably also has an employee or two to help her manage and repair them.
My main problem is I just don't see what the alternative is. Any rental housing needs to be minimally profitable or no one will bother providing it. That applies at all ends of the pricing spectrum. So if a profit can't even be made, what is the alternative? Millions of people homeless because there are no properties rentable at a price they can afford?
You don't see any alternatives because you are not challenging the premise of private property enforced by a state. That is a very strong assumption that precludes most possibilities. And state property is just a degenerate form of private property where one entity owns everything.
So what exactly are you proposing then? If no one can own anything then the best available will be little more than tents; think nomadic hunter-gatherer societies.
How about you answer one of my questions before you ask me yet another one. What exactly are you proposing if neither people nor government are allowed to own property? I'm not aware of any such scheme in all of modern civilization. The onus is on you to explain.
I think that's a very open ended question, but a very good scholarly source describing alternative systems to governing resources that isn't too radical but is also substantially different from privatization and market systems is "Governing the Commons" by Elinor Ostrom. She's got a Nobel prize in economics if that lends her work any credibility.
Land-Value Tax. Landlord makes money by improving the land and providing services to residents, not by merely owning land in perpetuity. Land is common wealth.
So I'll admit that personally I'm intrigued by land-value tax, but it's not an answer to the other guy's question. He was precluding all public and private land ownership. There can't be taxes on land of any kind if no one owns anything and no ownership is enforced.
There wouldn't be any shelters on unowned land because it would be foolish to improve it if anyone could take your improvements from you at a moment's notice. Now you need a government to enforce exclusive use of the land by a given person, and guess what, that's ownership.
If something can be stolen from you, then you own it. You're trying to have it both ways by playing with semantics.
A land value tax charges taxes for owning land. Now you're saying that it wouldn't be taxes on the land, but rather, taxes on improvements. Then it's no longer a land value tax at all then. The whole point of a land-value tax is that the tax reflects the potential value of the land, regardless of any improvements that might be on it, e.g. the Empire State Building or a flat parking lot would owe the same amount of LVT in midtown Manhattan. What you are proposing is a regular property tax, which does take improvements into account.
I didn't say the shelter was being taxed for value. The shelter is on land. You pay taxes on the land. Ergo, you're paying taxes for the shelter. The only reason you'll probably want to continue paying taxes on the land is because you have a shelter there.
>If something can be stolen from you, then you own it.
Right, you have been grant the right to use the land as long as you pay the taxes, which you may or may not have built a shelter on. You also own the shelter. You don't own the land.
So you're proposing the exact same system that we have now, working in the same way, except that you aren't calling it ownership for some reason, even though being granted the exclusive right to use land by the governemnt, and paying taxes on said land, is what ownership is.
I just don't think that you've thought any of this through, or that you have a coherent image in your mind as to what you're proposing, or how it's different in any way from the status quo.
So, I thought the question was obvious and answer is a resounding 'yes'. Many elections are won by keeping people poor and in many of those countries politicians hand out freebies. This is also the case for non-goverments. It is in the best interests of the middle class to have a working poor population because one can offload chores (like house work, car driver) to the poor at a cheap cost.
There is an old saying that "if you took all the money away from all the rich people, and spread it around evenly to everyone else, within 2 or 3 years, all the formerly rich would be rich again having taken advantage of the poor who don't know how to make and keep money". This adage, although heartless to be sure, has some degree of truth to it in my view. The problem is twofold, 1) a lot of people become rich not because they are so smart but because the lack compunction, that is, they feel no remorse for taking advantage of someone else 2) people who come out of poverty often lack the skills to know how to improve their situation, such as a lack of business skills, money management and etc., not having had good role models. In my view, the role of the government should be to check the first, that is to insure that some are not taking advantage too much, obviously this is a far to complex issue to even begin to cover here, but I am just touching on the gist, the second is to lend help to those in poverty through education and training assistance. The third component is of course, the well to do who are willing and able to help and do (e.g. the Gates and others). Thank you for the excellent thought provoking post and many good comments so far.
Depends, if you distribute resources aka stock land etc then you are going to end up with a different set of rich people. If you just redistribute money then it's like handing out money in monopoly after every property is bought, it might make the game take longer but the end game is not going to change.
Yes, because just as in the game monopoly when you have land ownership from which you can derive rent you inexorably end up in this situation. All value added flows to the landlords.
This was the original point of the game, originally named "The landlords game" and later renamed "Monopoly".
I wonder how Monopoly would play if you got assessed for Income Tax when you passed Go, or perhaps every fifth turn, instead of when you landed on a particular square.
> I wonder how Monopoly would play if you got assessed for Income Tax when you passed Go, or perhaps every fifth turn, instead of when you landed on a particular square.
The alternative game to ur-Monopoly, that is "Prosperity", had all rents split up when a player landed on a square. The property owner got a rent payment that reflected the value of the houses/hotels, whereas the rent on the land itself was paid to a common fund.[1]
> they feel no remorse for taking advantage of someone else
I don't understand what it means 'to take advantage of someone else' in the context of this thread.
Is Starbucks taking advantage of me when I want a coffee by selling me a coffee?
Is Elton John taking advantage of my desire to see him play live at my party and the fact that there is only one of him by charging me a million dollars to appear?
Are the bus companies taking advantage of my need to get to work when they sell me a ticket?
I don't get where normal economic transactions and supply and demand becoming 'taking advantage' or 'exploitation'.
It's theoretically trivial: most transactions have a surplus. How is the surplus divided between the seller and buyer? More lopsided, more exploitative.
Some transactions leave one side even worse off, but they execute due to ignorance, stupidity, or force. Those are obviously exploitative.
The most obvious form comes from the good old (bs) saying that 'the real price is what the buyer is ready to pay' (feel free to correct me here as to actual form of that).
Hiking up price to a drug (the shkreli story) would be an exploitation and not a 'normal economic transaction'.
So would be buying time of some poor workers in China for a dime. And then selling what they make on a 10x margin and pocketing it. There's nothing economic about that, its plain old theft (or deceit, whatever you want to call it).
There are more subtle forms, like apple spreading bs about their products being 'the best' and them having a 'vision' and then some uninformed fella buying stuff they make when its sometimes twice the price for objectively comparative product. Like always the devil is in the details.
This is all highly endorsed by the 'greed is good' model and it won't stop until we denounce it. No amount of government regulations can change it, snakes will always find a way. It's all in people's heads.
But the decision to buy this overpriced shit is made by the people and not buy the companys. This seams like bad decisions if you have not that much money or want to spent it better.
The real problem are systems where rich people doen't have to buy so much taxes of automated productions or property.
This is a fantastic point. It's just another transaction, like the hundreds of other ones you do every month. You can almost always find somewhere cheaper to live. Can't find a house/apartment to rent in your price range? Get some roommates, or see about renting a room in a house, it'll be much cheaper.
People tend to get seriously up in arms about renting, when in reality it's not nearly as bad a deal as they make it out to be. A lot of times it can be a better financial choice than owning.
Clinically, I can state that I am a live and let live person. Am not quoting that as a boon or bane. I suspect most people are. And this lot, while they can dig themselves out of poverty, cannot become rich. The reason is there is the small group that does not have the live and let live wired it. That that trait is good or bad is up for debate. It is this small group that ends up being rich given enough catalysts. They think only about themselves.
I think the problem is most rich people aren't smart. This creates flawed systems, bad business models and poor public infrastructure.
I don't know many people in Silicon Valley but I know a lot of rich people. They definitely have a lack of compunction and some use confidence games to scam and exploit people.
I am not suggesting they are all bad but 90% act like my friends who live in trailers in the Midwest on welfare.
Human nature doesn't care about privilege. I believe education fails to teach critical thinking and tools to face adversity. And this creates situations where rich people lie, or honest investment bankers launder drug money. Or doctors overprescribe drugs, surgeons do unnecessary surgies and rich men exploit young girls. But they all self-rationalize their decisions and never think they are part of the problem. Arrogance, incompetence, greed, stupidity, etc.
There are a ton of successful incompetent people.
In general, I agree with you that it is the individual's job to transcend these challenges but it is ignorant politicians and lazy wealthy and influential people who sustain a system that has so much friction, so much chaos and so many challenges to overcome to get a fraction of what the alleged "elite" get.
My point is, for the most part there is nothing elite about the 1%. There is no secret group controlling the world. If we want to change things, we can.
If you took all their money away and dropped them in Africa I think they'd have a harder time.
Yes, knowledge of social class issues (who you know and how to act to get people with money to trust you) can itself be used to make money, in the right environment.
It doesn't mean that educating everyone to behave like the upper classes makes sense. Those skills may not actually work for people who don't look the part or don't have the connections. To the extent that they're adaptive rather than arbitrary class indicators, they might actually be dangerous for someone living in a different environment.
Presuming, of course, that the wealthy were in fact the ones who earned that wealth initially versus receiving it generationally. You might see a different distribution on earners versus maintainers.
> There is an old saying that "if you took all the money away from all the rich people, and spread it around evenly to everyone else, within 2 or 3 years, all the formerly rich would be rich again having taken advantage of the poor who don't know how to make and keep money".
What a silly saying. Of course, if you redistribute all the MONEY to everyone, but leave all the means of production in the hands of a few, it's easy to predict that those few would be the ones rich again in 2 or 3 years.
I don't think the "means of production" is implied. I think it means that the rich deserve to be rich because they can get rich. That it's not just luck that they are rich, but that they know how to get rich. Take it away and they'll get it back. At least that's my take on the saying.
That's why the saying is silly. Of course if you redistribute all the money, it will eventually all go back to the people who own the tools that collect people's money. That's all that separates the rich from the rest of us. It's not some mystical "know-how" that they have and we lack. It's simply ownership of wealth-concentrating physical or intellectual property.
The headline here is a bit odd - it seems self-evident.
If we define the poor as a group which relies on regular labour to survive, and the wealthy as a group who does not, then many income sources of the wealthy dry up if the poor cease to exist.
One fairly obvious example is renting. The existence of a rental market is not undesirable. People will always want to live in a place temporarily, as a trial, as a holiday, as a stepping stone. But I'd imagine a huge majority of the rental market exists solely because the tenants either cannot afford, or have too little financial security to risk a mortgage.
More broadly, the cost of labour is reduced by the existence of poverty. The minimum wage is an attempt to alleviate this - in a world without poverty, a minimum wage would be unnecessary.
The question is whether we can do better. Axiomatically wealth inequality is good for those on top, at least in a direct sense.
Wealth inequality is good for all in a lot of ways, so I hate it when people talk about it like it's an inherently bad thing. If someone does something amazing and unique, they should be able to profit from it.
Think about a world with perfect wealth equality and you'd have the opposite sort of problems - like it or not, capitalism and yes, wealth inequality have brought more people out of poverty than any other system in the history of the planet. More of those poor people in 1st world countries are fighting to pay for high end smartphones than to pay for food these days. It's far from black and white, but China is an amazing recent example of this. Going from an agricultural nation of the dirt poor to a highly industrialized nation with a decent middle class in the span of a few decades.
>Wealth inequality is good for all in a lot of ways, so I hate it when people talk about it like it's an inherently bad thing.
It's not the wealth inequality that's good for all, it's the capitalist incentive structures. The wealth inequality itself is a negative side effect of those incentives, because it represents an inefficient allocation of resources in terms of utility created.
The question is to what extent the efficiency benefits of capitalist incentives offset the inefficiencies of the resulting wealth inequality. Personally, I think the extent of inequality we permit is far far more than is necessary to incentivise wealth creation. People would still want to be rich even if the alternative didn't suck.
Wealth inequality is the intended effect of that incentive structure though, not a negative one. The idea being that those who provide more to society - more unique skills, better creations, etc should be more wealthy. If you put wealth inequality in these terms, I think you'll find most people - especially those who've been exposed to other systems are fairly accepting of it.
> Personally, I think the extent of inequality we permit is far far more than is necessary to incentivise wealth creation. People would still want to be rich even if the alternative didn't suck.
I see where you're coming from but I think there's definitely a fine line to tread here - if you push this too far you could argue that what you're doing is actually just serving to slow down the march of progress in society and make those poorer individuals lives much worse.
Think about it like this - would you rather be upper class, one of the richest people in the world just 200 years ago or middle class today? The medical and technological advances are so enormous. To hamper them in any way would arguably make many lives much worse. And what you're suggesting poses that risk. We could lose out on many such advances.
To use an extreme example: Sure, maybe you don't feel that medical company shouldn't be raking in so much from a unique patented drug - but what if their next creation with that money is a cure for cancer. These are the risks you take when putting such limits on this system.
Now, that's not to say I'm strictly anti-regulation or anything, just that it's a lot more of a delicate balance than many people make it out to be. You need to be careful to keep those top performers extremely motivated to do more. And if you do things like have a 90% tax rate on the uppermost bracket like some places have, well, don't be surprised when you wind up killing off that kind of thing.
>Wealth inequality is the intended effect of that incentive structure though, not a negative one. The idea being that those who provide more to society - more unique skills, better creations, etc should be more wealthy.
Wealth inequality is the mechanism by which the incentives are supposed to work, but the goal is still the incentives, not the inequality itself. If it were possible to achieve the same without inequality that would be better.
But you say they "should" be wealthy, are you suggesting a model of morality that prefers rewarding merit rather than improving outcomes (even in the long term)?
>To hamper them in any way would arguably make many lives much worse. And what you're suggesting poses that risk. We could lose out on many such advances.
Or we could find out that the excessive inequality was unnecessary, and that we've been giving people shitty lives for no good reason. Or we could even find out that happy people are far more productive than people terrified of poverty. These possibilities are just as much a risk as your suggested outcome.
Personally, I'm inclined to think it would be far better for technological progress to ensure every person has the resources to educate themselves as much as they want without worrying about survival. And I don't think you need to offer people loads of money to give them an incentive to try and cure cancer.
> it's a lot more of a delicate balance than many people make it out to be. You need to be careful to keep those top performers extremely motivated to do more.
At a certain point, inequality can start to act against motivation, because the richest will continue to live in luxury almost regardless of what they do. Higher taxes (and ideally wealth taxes rather than income taxes) can actually encourage them to keep expending effort so they can maintain their standard of living.
I think the question we should ask ourselves is not how to eliminate inequality, but what baseline level of services and opportunities we want to give people at any stage in their life, regardless of their competitiveness and productivity, including when they're otherwise poor and a net drain on society.
In other words, is stable housing a basic right or is it a luxury? If it's a basic right (and/or a net positive if it gives people the chance to bootstrap themselves into higher earnings), then we should strive to increase the reach and quality of tax-funded government housing programs - together with other baseline programs, such as public education, social services, etc. Or if you're a small-government person, substitute "tax-funded" with "charitable" and make it dependent on individuals' goodwills.
If it's a luxury then the status quo seems acceptable - markets need to be able to pick their customers, and baseline services are losing products unless the "exploitative" pricing makes up for it.
Abolishing inequality isn't desirable at all, but the range of inequality doesn't have to go from 0 to billionaire. We can provide a baseline that still leaves enough incentive for people to work their way up but is decent enough to live with dignity, greater than 0. Soviety provides some of that today. Discuss where to draw that line and who, taxpayer or otherwise, can provide it. A functioning society is never completely equal or completely without minimum support, always somewhere in between.
If the top end is short of "billionaire", I think you get a world without Tesla, Space-X, Blue Origin, the Bill and Melinda Gates Foundation, and several other things that I believe are valuable and worthwhile.
You may argue that the cost is too high and that we'd be better off without those things.
Maybe in a more equal world were people would not be whipped, I mean "incentivized", into working all the time, a larger portion of the population would be able to contribute their passions to society than just the elites of today? Hence maybe surpassing the results of the current aristocratic version of this.
I wasn't arguing for lowering the top end, I think it's fine as is.
A broader bottom end may mean that it gets a bit harder to make it to that point, but in practice that's not where most of the resources for providing more/better housing would come from anyway. Ambitious people will find a way to make it to the top, while putting their wealth into self-directed charities and moonshot companies instead of government-controlled tax revenue. That's not necessarily a bad thing, and it can and will continue either way.
In the end it's the decision of the broad public, the "middle class" if you will, to determine how much we want to collectively spend on housing security, and how to create mixed-income communities to facilitate upward mobility and avoid creating poor-people slums or monocultural wealth enclaves. The main ingredient for that is (valuable city) land, so I don't believe technology can do much about improving things too much. Nonetheless we always have the option to contribute to affordable housing, universal basic income, yadda yadda. I don't think that's mutually exclusive with high-profile billionaire projects.
> I wasn't arguing for lowering the top end, I think it's fine as is.
Sorry. I was reading my own bias/worldview into it and taking as a given that there will always be people with negative net worth (debts in excessive of assets). You were clear enough in speaking to that as unnecessary, but I read right through that without really internalizing your point of view. (I still believe in any system where credit exists that there will always be some net debtors, but that doesn't give me the right to argue against a point of view you weren't espousing.)
The thesis is transparently false. While the deprivations of poverty may be exacerbated by exploitative business practices, they are self-evidently caused by a lack of income. Software developers in San Francisco or lawyers in NYC may complain about high rents, but they are not impoverished by those rents. Someone living on $733/mo of SSI remains poor even if their rent is free.
The author mentions a significant root cause in the first paragraph - de-industrialisation. Like so many other American cities, Milwaukee was relatively prosperous before the collapse of the manufacturing industry.
Improved regulation of the rental market would be a minor improvement at best. It's wishful thinking to imagine that poverty could be fixed quickly and at negligible cost to the taxpayer. The problems of poverty are systemic and so are the solutions - better welfare provision, better education, better support for job creation. If we wish to see an end to poverty, we must be willing to pay for it.
Poverty has ultimately nothing to do with opportunity, but those less unfortunate; literally, those without luck. Buffett would be the first to acknowledge that he's been lucky, and I would claim that while it's completely true that poverty has many sources, I would not agree that luck cannot be removed from the process. As such, poverty will always be with us.
I assume you actually mean that luck cannot be removed from the equation when you say "I would not agree that luck cannot be removed from the process."?
You may be onto something there, certainly resources assist with wealth creation, but there's very little that is a sure bet, and risk and reward in the financial sense are frequently correlated. If it is a given that one wishes to minimise the degree to which they are beholden to luck (reducing risk) they are simultaneously frequently taking the other side of that bargain too (reducing reward). And you end up with poor people working terribly bad reward jobs on wages that left to market forces might not even be enough to cover their cost of living at all, but are pushed up by minimum wage laws, and subsidised by state social welfare programs (put it this way, and it's actually the state that profits from the poverty of other people by trading subsistence living for political capital, a conclusion the guardian would likely be utterly horrified by)
People just trying to scrape by, keep a roof over their heads, clothes on their backs and food in their bodies are not prone to taking smart, calculated risks on their financial situation. In fact the example that springs to mind with the kinds of risks that these people take are actually really bad ones (lotteries, gambling in general, etc). They don't for example build a wealth portfolio, start a business, or even just invest in the skills necessary to get a better job that would yield a higher wage.
It seems that risk management education is a vanishingly rare thing in the group under discussion, and perhaps that's something that would go some way to addressing the role that you highlight when you refer to luck.
Poverty is more than lack of money. Lots of people lack funds, but would violently disagree with you assessing them as poor.
Think about Maslow's hierarchy of needs -- people need a base to function properly. When your home can vanish in an instant, it changes your mental stance and influences your behavior negatively.
Government is supposed to represent the people, not slumlords. We've perverted the notion of democracy into some sort of weird embrace where "the economy" (where the economy is whatever special interests weild influence today) is a priority above the public welfare.
If a slumlord, or a corrupt contractor profiting off of others misery (operators of "nonprofit" social services orgs, private prisons, etc) is happy, democracy has failed.
"The beggar is the necessary supplement to the millionaire." - Henry George, as paraphrased by Tolstoy.
Ever since I first saw Henry George's ideas, I can't stop seeing it everywhere; there's a very real difference between the return to rent than for other capital or labor.
For more information, check out Geolibertarianism[1], though Henry George's writings are lucid, rigorous, and energetically written. Progress and Poverty is the best place to start.
Being from a country where we have suffered populist governments who "defend the poor" by increasing their numbers, I am convinced that this is very true. Instead of creating jobs and improving education, they give handouts to the poor, and their number has dramatically increased. These jobless people depend on the handouts, so their vote is guaranteed to go to the populist party. In my country, this technique has been used effectively since 1946.
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[ 4.8 ms ] story [ 309 ms ] threadHowever there are a few things that are more explainable than others; check cashing places exist because banks are not designed for the poor at all. Thankfully this is, I think, going to change in the next few years what with all the startups cropping up to offer financial services to lower income people, since most of the shit the banks charge fees for is because they rely on antiquated processes and management that can be automated.
You're right, but I don't think anyone has mentioned another big profiteer, the welfare bureaucracy itself. The government pays people to remain in poverty, and everyone employed in those programs is profiting from poverty and is incentivized for it to continue. So are the politicians who create these progams. It also contributes to the inflated the rents that the subject article complains about.
The problem with the article is it makes the implication that the money made by vulture capitalists in poor areas is the biggest motivation for the existence of the poor.
But one can see a much larger beneficiary. If a company that automated a factory or moved a factory to a different region or country had to pay to support the wages of those workers it left behind, the costs of automation and mobility of capital would be much higher. Thus the ability of the poor to exist, the condition of each worker being on their own even if suddenly all the jobs in a given area dry up, is tremendously profitable to the largest industrial companies in the world.
Not really. It depends on the country. Some third-world countries have most of the population in poverty, so in that case capitalists can make a lot of money from poor people and have no incentive to do otherwise.
"For years, Ferguson's police force has meted out brutality, violated civil rights, and helped Ferguson officials to leech off the black community as shamelessly as would mafia bosses...
"Ferguson officials repeatedly behaved as if their priority is not improving public safety or protecting the rights of residents, but maximizing the revenue that flows into city coffers, sometimes going so far as to anticipate decreasing sales tax revenues and urging the police force to make up for the shortfall by ticketing more people. Often, those tickets for minor offenses then turned into arrest warrants."
http://www.theatlantic.com/national/archive/2015/03/ferguson...
Nobody would work in the conditions needed for diamond extraction or sweatshop clothing making for example, if it wasn't for dire poverty.
This is why military contractors in war zones, Arctic crab fishermen, and prostitutes make a lot of money.
This is econ 101; supply and demand. You know it too. You're (presumably) not impoverished, but you'd work in diamond extraction or a clothing sweatshop, if you were paid enough.
Going fishing on one of those boats is on my bucket list, once I'm not so flabby. I think it would be a hell of an experience.
In fact, this was the case during the industrial revolution. A pair of pants would cost a full week's wages. This is why people back then owned like 2 to 4 outfits.
It's amazing how many people just can't comprehend how the world can realign so different things become 'normal'. Like, "nobody would ever pay that for clothes". What, you think they'd go naked if there was no alternative?
When I say "nobody would do it" I don't mean "regardless of any condition whatsoever". Even if there wasn't poverty involved, slaves would obviously do it too (and they were ones doing such things, historically, right until the end of the colonies -- and in fact still in several places, using various conscription schemes).
Nor did I mean "regardless of working conditions". E.g. if they make it as easy as pressing a few buttons, many would have no issue doing it, even for a low wage.
The idea is that people wouldn't do the job under the current working conditions AND wages -- if it wasn't for dire poverty. "Supply and demand" is not some contradiction to that, rather it is the very mechanism required to take advantage of dire poverty to give those wages.
And of course "supply and demand" is rarely a "natural" and "neutral" thing -- you can skew it in a thousand ways. From passing special laws to keep people down and prevent development, to killing people's farmlands to make them come to the big industrial city to find some low paying factory job to survive.
I've always liked the idea that you should never turn down an offer or request. Instead, you should name your price. Sometimes that price might be functionally equivalent to turning down the offer, but there's always a tiny chance that someone might agree to your (probably laughably unreasonable) terms.
(I should really watch The Magic Christian again)
http://www.imdb.com/title/tt0107211/
Of course they can pay enough. Just not when there is competition from other farms using illegal immigrant labor.
You know as well as I that if all illegal immigrant labor simply disappeared, the American farming industry would not just shut down and leave everyone to starve. They'd pay as much as they needed to hire Americans, and consumers would pay as much as needed to sustain that.
e.g. here it's hundreds per hour for a girl who would barely beat minimum wage otherwise.
$5 in South Asia is mostly mythical, but even where it would be true, that's a large multiple over what they could make otherwise.
Much to everyone's surprise, it's not. People from the region attest to the fact.
> Even where it would be true, that's a large multiple over what they could make otherwise.
Only if you factor in that these women are uneducated, poverty-stricken and job prospects are low.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.
An example will suffice: without the savings needed to put down a security deposit for an apartment, you are forced to leave in cheap motels (absent options like living with others or in a shelter), even though the monthly rate is higher. There's no kitchen in those motels and you may be working multiple jobs, which limits your ability to cook nutritious food and eat cheaply. And the cycle continues.
Some of the stories in George Packer's "The Unwinding" [2] emphasize how narrow the margin of error is. Everyone makes poor choices from time to time; those with resources (financial & social) can weather them.
[1] http://www.amazon.com/Nickel-Dimed-Not-Getting-America/dp/03... [2] http://www.amazon.com/Unwinding-Inner-History-New-America/dp...
http://amzn.to/1RZZHhf
There are apparently good choices and bad - Erenreich illustrates how making the bad choices keeps you poor, while Shepard illustrates how making the good choices can you out of poverty.
The trailer park owner in the article owns 131 units and "makes" (presumably grosses) $400K a year. Those units are about $250 per month, hardly the stuff of Viking-style pillaging, IMO. The other landlord has also built herself a business in real-estate and now can afford to take a vacation? Good for her, seriously. She's providing housing and her tenants/customers are providing her income. Building such a business (and I assume running a 131 unit mobile home park) is absolutely work, the value of which is evident by the paying tenants.
> Building such a business (and I assume running a 131 unit mobile home park) is absolutely work, the value of which is evident by the paying tenants.
Running a sweatshop is still work, the value of which is evident by its customers.
Just because someone needs to work or a place to live doesn't make it right or commendable.
Have you started to raise funds to start and run that business?
Why do you think they do not?
About the most you can do is try to claw-back your training expenses if they don't stay for a certain number of years, but you can't squeeze blood from a stone. That money was already spent on basic necessities of life and can't be recovered.
Presumably, if the training were significant enough to be worth the company pursuing it and the now ex-employee found it economically better to use those skills elsewhere, then there might be significant enough income against which to make a claim.
Yeah, that was my original question.
I think what you're saying is true to an extent. At the same time, a lot of companies complain that positions simply go unfilled.
No, it's not. And, I wouldn't dismiss out of hand what can be "enforced by contract law". The contract itself represents the willingness of two parties to adhere to certain terms. If a company pays you a million dollar signing bonus and asks you for a three year commitment, then you should expect them to demand that bonus back if you leave in two years for reasons not set forth by the terms. And, you should expect claims of "indentured servitude" to fall on deaf ears in court. You can leave. You just can't keep the money.
Similarly, companies wouldn't enforce that the person continue to work for them; simply that they must repay their training costs if they don't.
This is currently done by some companies, for instance, with MBA sponsorships. They're sometimes called "loyalty contracts".
These would be voluntary programs for skilled jobs that require training. No one would be obligated to sign up, and no one would voluntarily do so without obvious benefit.
> Have you started to raise funds to start and run that business?
No, because the incentives to continuously draw a greater profit from your customers goes against the need to provide housing to those who can't afford it.
1. Let a non-profit run those kinds of businesses. The non-profit , before starting would establish clear rules that prevent eviction, discrimination and the other nasty stuff. Financing should be gotten from institutional investors, by promising some fixed rate of return.
2. Let the government run that, it works pretty well in many places around the world , in creating a relatively stable living environment.
3. better regulation to prevent nasty behaviors.
I guess, some "ceiling on land-holding" act is a must if we want reasonable check on inequality. Currently the US economy stinks of the problems of feudalism - some kings and barons with a lot of land and then some more people down their rank with some land while the rest of the people with almost no land and perpetual poverty.
In short, no renting of land at all. I know, there are some issues to it, but I guess, those can be resolved, without much harming the economy of the 99.99% of the people.
Please correct me if I am wrong w.r.t. "Land Value Tax" vs "ceiling on land holding".
[1] https://en.wikipedia.org/wiki/Land_value_tax
edit: added clarification at end.
Nobody is 'profiting from poverty' here. These landlords would make much more money if these people were wealthier! I'm sure they'd love to make nicer places and charge higher rents with higher margins, but they can't, because that's all these people can pay.
Nicer places require larger capital outlays. The landlords chose their market, not the other way around.
You don't choose to make umbrellas for the umbrella market, and just keep churning out umbrellas, perpetually disappointed by the fine weather.
This market is profitable, but if it were wealthier, it would be more profitable. There's no incentive for a business-owner in such a place to somehow keep the locals in a state of poverty.
You do if people keep buying them, irrespective of the weather.
You've misread my comment. I'm not saying that the landlords create the market; simply that the landlords chose a market that requires less capital outlay, and also with full knowledge that the market is not typically upwardly mobile.
In other words, it's fairly rare that landlords buy mobile parks with the intent of later upgrading their customers to upscale condominiums.
If a landlord is about to chose a market that requires less capital outlay it's because there is an unfilled need in that market. Without the lower cost housing the tenants will only have fewer options, potentially more expensive ones at that.
If all of the needs are filled and somebody else decides to target the market then they have to find a way to disrupt it, in this case that probably means figuring out how to reduce costs and charge less.
So yes, people are profiting off of poverty.
If you look back at my original comment it's WRT the assertion that these landlords would love to upgrade their properties and charge higher rents. I was simply saying that's largely untrue. These landlords are aware of the market dynamics/demographic when choosing to invest and have little-to-no desire to "upgrade for higher margins".
"If this market were wealthier it wouldn't exist"
That is exactly right.
The landlord would be more likely to wait for them to move elsewhere and just await more customers for their current offering as long as the market was there. This, rather than outlay the capital to upgrade the place; else the landlord would have likelier invested in a more upscale offering to begin with.
Likewise, depending on the degree of increased wealth, the tenants may well prefer to move. Slums and trailer parks generally don't have a tendency to just "happen" in otherwise affluent areas. With increased options, renters would likely desire better surroundings, schools, ownership, etc. vs new granite countertops in their double-wides.
Of course for this same reason, landlords don't want to risk upgrading beyond what can be recovered in a reasonable time by rents that the market will bear. No amount of upgrades is going to make more affluent buyers with other options move to a mobile park.
People are suggesting here that the landlord would upgrade because it's economically rational to collect higher rent, while simultaneously ignoring much of the actual economic reality here.
Again, I'm not claiming that the landlords create the market. But they are under no delusion when they invest.
There are many factors explaining this : reduced access to law for the poorest, lack of alternatives, but also social perception of the tenants and of their worth, or the cognitive bias displayed by many about homo economicus.
https://en.wikipedia.org/wiki/Housing_cooperative
I'm not seeing a workable alternative beyond government-provided housing, but that doesn't have a good history of success in the US.
My grandma in Israel paid rent in a public housing that had exactly such an arrangement, and after becoming a pensioner, she was finally able to purchase her house. And i have no doubt such arrangements are one reason why Israel, a nation establshed from poor immigrants did quite well for both economically and socially for relatively long.
Such schemes from government are a must.
They are much better than "welfare" which just encourages people to be lazy. Edit: added about "welfare".
That's right, government protecting the people again; in this case, lease-options or lease-purchase agreements with a financing component where the purchaser is living in the property during the term are now deemed consumer financing arrangements (rather than real estate financing arrangements), which are subject to review by the then-newly-created Consumer Financial Protection Bureau.
It all but dried up the willingness of sensible sellers to write lease-options on property where the lessee would live in the structure. Yes, there was some amount of fraud and exploitation under the old laws as well, but now that entire mechanism was closed off to property owners willing to sell and [typically] working-class families looking to buy.
[1] http://www.mhmarketingsalesmanagement.com/home/featured-arti...
[2] http://www.huffingtonpost.com/2012/02/03/rent-a-center-cfpb-...
Hint: most of these people can't qualify for a mortgage, otherwise they'd just buy outright.
It is possible to house every one. Even very sick drug addicts.
Here's the thing: being a slumlord is profitable. Yes, your tenants don't pay much, but if you don't improve your property, ignore complaints, refuse basic maintenance and throw everyone on the street if they're a day late on the rent, your margins are excellent, far better than you'll make with decent apartments where people demand things like legally-conformant housing and nonabusive contracts.
These are tenants who don't have recourse, or at least not easy recourse, to the legal system, so cold water flats, no A/C or furnaces, black mold, and rats and roaches are part and parcel of the slumlord experience. Of course, all this is illegal, but slumlords tend to have a lot of free cash to throw at local politicians and attorneys, and if they own a large number of single-family dwelling it's hard to track down and deal with every nonconformant property.
The simple answer is that if I can't afford to maintain a minimal level of environmental and residential standards, I'm not allowed to rent out my property. Likewise, I can't buy an empty lot, fail to maintain it to code, and then offer a defense that it's too expensive to keep it up. Governmental police powers are quite adequate to compel compliance.
All this is quite separate from the other point you bring up, which is that affordable and decent housing is going to require socializing costs. In fact, there's no reason government shouldn't engage in more public-private partnerships to help fund affordable housing as part of mixed-income residential planning. But I don't buy the argument that minimal living standards are an unwarranted intrusion on the liberty of rentiers -- and I dont think you do, either. If payday loans can be deemed predatory, can't "environmentally hazardous" rental units also be?
That's all well and good, but what happens to the people who are renting there, and what happens to the people who can't afford a place with "minimal level of environmental and residential standards"? Will those people be better off sleeping rough?
Everyone should have access to basic housing. If they do not that's a failure of government to provide a sufficient social safety net.
Today's poor housing would look like a damn luxury 100 years ago. Today's luxury housing will probably look bellow standards after 100 years
A modern small home, with electric lighting, an indoor flush toilet, a refrigerator and other electric appliances, hot and cold running water, thermostatically controlled HVAC, microwave, and cable TV? Absolute luxury compared to the typical house built and lived in in 1916.
My house (a quite respectable house built in the mid-1920s in Cambridge, MA) appears to have originally been fitted with a coal furnace and has had electric lighting retrofitted (originally had gas lighting). An oil furnace was retrofit in 1937. It seems to have had flush toilets from the start.
However there are a number of luxuries that have not increased in these years that are pretty important, such as personal space and privacy, my house and I suppose yours have this luxury. The houses I grew up in, and which poor people are living in now, often do not have these luxuries.
There is another thing that it seems was not a luxury in 1916 and is becoming now, relative freedom from the threat of eviction. According to the article there is a greater deal of eviction of today's poor than there was in the past, and I think that luxury might be really important if you have children. Important enough that I would be willing to trade indoor plumbing, microwave and TV for it, maybe some other luxuries if I was given the tools to make up for them (tools like ice delivery and so forth).
Finally given the low quality of poor people's housing not all of these luxuries you list can be counted on as being available, if for example the heating breaks it might take months to fix etc, so the luxury at the level is highly variable.
If we hope that they might compete fairly to improve their lot, are they started well behind in a house with failing power, or heat or cold that keeps them awake or sick and so on?
Without a fairer playing field, they can fall further behind.
A satisfactory home that complies with regulations would ideally allow the occupant to get a decent sleep, prepare food healthily and present themselves appropriately for work.
So the point is that following your reasoning there is really no end to the depravity you can reach and somebody would still be able to claim that is all fine, because only rich people in the stone age could afford such luxury.
The point Smith made was that poverty is always a relative phenomenon. What is a necessity is always defined in terms of the society you live in. There is no such thing as a universal definition of necessity.
I had an interesting conversation about this with my wife's American parents. Despite the fact that her parents were noticeably better off economically in their childhood than my parents, they felt a severe stigma of poverty my parents never felt. My parent grew up in a country where they were much the same as everybody else. In fact a little better off. They did not feel poor at all. They had a happy childhood both of them. But one of my wife's American parents had a bad childhood, plagued by a strong feeling of being lesser than everybody else. Never having people over on visit out of shame over their own poverty. She was used to seeing everybody else being better off and internet the idea they they were somehow lesser people.
Today my home country is richer than America by GDP per capita but comparisons of wealth and of people's feeling of wealth or poverty is difficult. Many of my american relatives enjoy bigger houses and cars than I do, but one always gets the feeling that their life is much more of a struggle than mine. I live in a smaller house and have no car. But I have no financial worries like them. I have long vacations, I am not constantly overworked. I don't worry about health care insurance, saving for college education to my kids, getting fired.
So I think one should have some respect for the desperation and despair the poor in America feel. Knowing that a surprising car repair or medical bill could send you onto the street in no time. Even poor in much less wealth western countries have to deal with quite that level of insecurity.
> I live in a smaller house and have no car. But I have no financial worries like them. I have long vacations, I am not constantly overworked. I don't worry about health care insurance, saving for college education to my kids, getting fired.
In America, we trade stability for social mobility (probably truer before the WWII), and our government promotes car and home ownership, but I doubt those were tradeoffs you made for longer vacations and "free" health care and education. We became more socialist and fascist after WWII and during the Cold War, but we've still managed to maintain steady income growth for average Americans, despite what the media would have you believe with "household income": http://politicalcalculations.blogspot.com/2012/12/the-discov...
Poverty will always be with us, but there are plenty of things our bureaucrats can give up to fight it better. Our federal government has more or less the same number (very few added in the last 100 years) of representatives despite our population tripling. This system has become more susceptible and beholden to corporate interests, including media corporations that promote stories like this one and the problems and divisions in our society without any context of our achievements and commonality. This promotes bandaid and politically expedient half-measures that only make the problem worse in the long-run.
And you can't have success with capitalism without a healthy and prosperous working/poor middle class to be your consumers.
I'm thinking of democratic socialism. It's capitalism with a heavy emphasis on welfare and super strong social safety nets.
If you look at the quality of life index (the "where-to-be-born" index), you'll see that the top 10 countries all employ a form of democratic socialism. That's saying something right there.
Of course not. But neither is it all or nothing; slum or safety net. My point is the root cause needs to be explicitly identified before it can be rectified. The root cause in this case is America's fetishism for small government and smaller taxes.
(And just to be pedantic, historically there's also spoils from conquest.)
There's also government debt. I know you could argue that this has to be paid back eventually---but when interest rates are below inflation, that's a better than free loan. (And in theory they could invest in assets that yield even more, instead of just consuming the difference between inflation and interest.)
Most people buy government debt out of their own volition even at these low rates. (And if it's foreigners buying it, there's even less direct coercion via regulation involved.)
Why do you think anything with a government stamp is automatically 10x the price? It's not because of people wanting smaller government. Smaller government is about localizing procurement down to the smallest workable level.
Making a huge tender to build these environmentally safe houses for everyone would mean only the biggest and most expensive companies could compete in the 10 year long bidding process. Making a tender for 10 houses for the local poor in your village would be free in comparison, and those 10 houses would be ready before the poor die of old age.
In general, yes. But not in the best run governments---Singapore comes to mind.
(But even Europe isn't quite as bad as the US. American public procurement---especially for infrastructure projects---is truly hideous and expensive by global standards.)
The Swiss seem a good model if you are looking for how localized government can work.
I don't understand why that is. We paid ten billion dollars to replace the SF Bay Bridge, and it took forever. Now we're going to spend seventy billion for a train that goes from nowhere to nowhere, and very little is actually going toward construction itself.
Is it the cumulative effect of regulations, or the price of labor, or corruption? Something else?
There's some special American factors. One is that your population, and by extension the lawmakers they vote for, don't trust the bureaucrats at all, and thus make try to micromanage the public servants with laws that remove discretion. These laws are intended to remove opportunities for corruption, but they also remove opportunities for common sense.
For example, in most of the US they have to award public contracts to the lowest bidder---no matter how likely the awarders think the lowest bidder is going to overrun schedule and budget.
I've read a bit about these problems (and my summary above is from memory). Even lurking on HN, this topic comes up from time to time in the comments.
This article is suggesting that these landlords are causing poverty, but then it goes on to not even try to make that case. They may be making money from poor people, and they may even not provide them the level of service they are legally required to, but this article makes no actual case for them causing or being any real part of the poverty cycle. Unless of course you think that the mere fact of asking that their rents be paid is the problem - and if you do, fine, but you're then tasked with proposing an alternative way of housing these people.
The landlords are causing poverty by increasing rents to the maximum level the market will bear, removing money from the system and - usually - moving it offshore.
Because slum property is so immensely profitable, there's no incentive whatsoever to invest the profits in anything riskier. So you end up with wasteful non-projects like this:
http://www.dailymail.co.uk/news/article-3490220/The-Ghost-Ho...
Meanwhile renters see their disposable income - in fact their economic freedoms - eroded until they can barely afford housing and food.
You now have a deflationary cycle where it becomes harder to find customers for new businesses, and harder to find investment because investors don't believe customers are easy to find.
Of course it's not just landlords. But generally economic cultures are designed to be favourable to either increasing or decreasing economic freedom for the low-paid. And if it's the latter, the predictable result is massive inequality and a deflationary uncontrolled descent into terrain which not only does the poor a lot of damage, but also eats away at the sustainable economic value of the assets of the rich.
Usually?
Yeah, your local slumlord has a Swiss bank account.
By your logic, you'd have plenty of profit to spare, and you'd be providing an enormous social good.
But my guess is that you will not do this. And you will not do this because your analysis of their margins and business is not actually correct, and you and everyone else in the market knows this.
What sort of lame excuse is that for exploitation? "These people could be much worse off if they were being exploited more"? Well, duh. The point is that they're in a dire situation in the first place because they're being exploited. Their landlord is not some benevolent benefactor, he or she is the purveyor of their misery, that's the only reason why he or she has a say in how deep that misery is.
By analogy, imagine you grab someone off the street and beat the shit out of them. You break their ribs, kick their teeth in, bash in their skull, but stop just short of killing them. Then you go "hey, it could be much worse: I could have killed you".
Well, yeah, you could have. You could also have avoided attacking them in the first place. They're not "better off" thanks to you, they're much worse off than they could have been because of you.
I am inclined to believe you are a troll, because the distinction between an aggression of violence and a voluntary free exchange on the market is quite easy to make, which in your argument you fail to do.
The difference between that and slumlords is simply a matter of degree.
Desperation is the route to profit in both cases. Truly voluntary exchanges without gaping chasms of systemic inequality do not provide opportunities for sustained profit.
If you control the premise of the arguments, it is easy to "win".
Desperation is a rich source of profit. Neoclassical economics, instead of analyzing this sordid detail, masks it with assumptions.
That's why you view it as an unrealistic scenario despite the massive amount of historical precedent. Under econ 101 models (perfectly equal wealth; perfectly competitive market) it is an unrealistic scenario.
Apparently, the same kind that would leave children living in a cardboard box in front of their job.
Life as described in the article sucks, but it's still orders of magnitude better than living on the street.
What is wrong with this scenario? If there were no ambulance service I automatically choose "Die" (which is, apart from matters of inheritance, always the wrong choice), but if there is the ambulance service I can buy my life for the relatively meagre price of 80% of my wealth, then having neither children nor wife I would take that deal ten times out of ten.
Either way it's not exploitation, even if there's a company that charges prices that always bankrupt their patients, I still choose broke over dead, and if I wanted to choose dead I can do that too.
I'd pay the price on the spot, because I like not being dead. But afterward, I think I'd try to rob that guy to get my 80% back, and maybe some of the 80% from some other people. That's not a "thank you so much, you're my hero" price. That's a "better watch your back" price.
When too many people start to see you as a parasite upon their community rather than a foundation pillar for it, they will certainly reduce their rate of cooperation with you, and some may retaliate. You may have to acquire a taste for other people's spit in your restaurant food, for instance. And worst of all, you may motivate someone to launch a business in direct competition with yours.
Then, if your choice is 80% to the dirty exploiter or waiting a few more minutes for a Medic-Uber to pick you up take you to the hospital, you would almost have to be gushing blood from a major artery to accept the former.
Classy.
Where is the exploitation? Nobody is being tricked or duped. Two people are coming together to exchange something without coercion, intimidation, or trickery.
In the sense that he or she is charging 70% of their monthly income for rent.
And it's coercion alright if the alternative is being left homeless.
No. He or she is charging an absolute amount, not a percentage of their payslip.
>And it's coercion alright if the alternative is being left homeless.
Coercion /koʊˈɜːrʃən/ is the practice of forcing another party to act in an involuntary manner by use of intimidation or threats or some other form of pressure.
There is no coercion here. Poor people are not mindless sheep, they have their own will, their own goals and their own plans. If they live there it is because they chose it. Not the landlord, and not "the rich".
Here's another analogy. I make this beautiful and unique item that you want to buy. I charge - literally - an arm and a leg over it. Like, the actual body parts.
You protest: "You're asking for a part of my body??". I reply "I'm asking for an arm and a leg, not a part of your body". Hey, maybe you can pay me with someone else's arm-and-a-leg, right?
That is how absurd it is to say what you just said.
>> There is no coercion here.
Yeah, there totally is. It's the same kind of coercion the Mafia employes. "You don't want to pay us to protect your establishment? Well, fine, but then something may happen to it".
You don't want to pay 70% of your income to stay at my dirty, dilapidated hovel? That's fine, but then you might find yourself homeless.
The tactics are similar because the mindset is similar. Pay up or else. It's exactly how it works and it's precisely why it's coercive and morally repugnant.
More to the point: I find it morally repugnant because I don't have to pay 70% of my income to stay at a trailer, and I make probably 70 times more than the people who are forced to live there. There is no excuse for that. If I payed 70% of my income to live in a shithole, then I would think, OK, that's how it goes. That's life, see?
Except, it's not. I know it's quite easy to get a much better deal, as I got. If someone forced me to live in such conditions, I'd be up in arms. Therefore, I also do mind a lot that other people are living in such conditions.
I can only assume you're using all your excess income to build and subsidize homes for the poor?
The simple fact is that, over many thousands of years, humans have evolved a system of voluntary exchange. And we have found that that system produces the greatest benefit for the largest number of people as compared to all other systems we have tried at scale. This means that those with property rent their property to others so that they may live there.
If you don't allow the owners of property to rent their property, then there will be no homes for anyone. If you do not allow people to own property, then property will likely not be put to its most productive use (see: communist russia, china, north korea, etc.).
If you'd like to propose a better system, i'm all ears. But until then, you need to accept the hard reality that there is no better solution for these people, and that an offer like "pay 70% of your income in rent" is something that they have the right to accept.
To suggest that these people are being exploited when they are entering into such an agreement is to suggest that they are incapable of agency, and to deny them the most basic of human rights.
On the one hand, to say that with any authority you have to be a, well, authority, on "western philosophy and economic thought" or at least to have read it. All of it. Have you?
On the other hand, I'm not conversing with "all of western philosophy and economic thought" here. I'm disagreeing with you about a very specific thing, which btw is not at all whether "charging rents in a voluntary exchange is a coercion". That's your interpretation of my comments.
What I find coercive is charging someone 70% of their income to let them live at a shithole with the unspoken threat of them becoming homeless otherwise looming over their head. Not to mention the threat of kicking them out if they complain about the state of the property, or if somebody calls the cops on them, and so on, as the article reports.
The people who rent those properties, far from being "free agents" as you pretend they are, find themselves in dire economic straights and with extremely limited options. They are under immense pressure to find a house and grave consequences if they can't pay the rent.
If you consider that "free agency" then you might as well consider extortionate lending, such as practiced by loan sharks, with the threat of having your legs broken by thugs if you can't pay, to be a fair and acceptable exchange.
I don't know what "literally all of western philosophy and economic thought" says about extortion, but I do know it's illegal in most of the world- and for good reason.
The premise of your argument fundamentally rests on the idea that these landlords are choosing to charge "70% of their income to let them live at a shithole". But is that true?
Do the landlords have much of a choice in this matter? We can see with a simple thought experiment. What would happen if they were to lower their rents?
I'll tell you. They'd get more customers. Their vacancies would quickly be filled, because they'd be cheaper than the 'shithole' next door. And if they are already full, then all they'd need to do is keep building new shitholes until they can take all their competitors tenants too.
So, then. The obvious question: Why doesn't this happen? Why don't all these slumlords recognize this obvious opportunity for massive profit? Why don't you or I build a shithole of our own and charge only 60% of people's income?
And the answer is simple: Running shitholes costs 69% of the income of those monthly tenants. Charge any less and you're losing money. If you do not believe this to be the case, then by all means, start your own shithole and charge less. Let me know how that works out for you.
The hidden assumption here is that producing the goods and services required to keep a single human being alive in relative comfort (fed, sheltered, educated, healthy) necessarily requires an expenditure of manual effort roughly equivalent to what that human being can do.
Or, in other words, the assumption is that it is not and never can be the case that N people can be provided for by the effort of K people, where K < N.
And yet that assumption is obviously false: we have, here and now, the ability to feed, shelter, educate and provide health care to every single human being on the planet, and the ability to do so without the need for many of them to work for it. In the western world this has manifested in the explosion of service-oriented industries and administrative roles, which are essentially make-work jobs to give society as a whole the feeling that people are "earning their keep". Even among these affluent, supposedly highly-skilled people, probably the majority of the jobs are simply unnecessary.
What's needed is a realignment of our mentality about work: now that we have the ability to provide for everyone, we should simply do it regardless of whether everyone works or not. Will there be free riders as a result? Sure, but they're not actually a problem, and become less of one with every passing day (since the system that produces the necessary goods and services continues to grow in efficiency), and we just need to get over our fear that someone, somewhere might manage to have their needs provided for without working for it (we're already content to do this when someone inherits sufficient wealth to live without working, so this would just be an extension of that attitude: people living now and in the future will "inherit" the wealth of the past of the human species and be provided for out of it).
This attitude is terrifying. As a matter of policy, you would have me work as a slave for someone else or in turn, benefit from the slavery of others? It would be total war first.
In any system, some folk will always squatter and some will always attempt to gain power/advantage.
Your world sounds too much like Atlas Shrugged.
The issue is getting over the mental hurdle of enabling such a society. The technology is actually pretty straightforward, but the politics of it is full of people who just can't stand the idea of that filthy leeching parasite, he doesn't work as hard as I do, why does he get anything at all! He doesn't deserve it! Which in turn is an artifact of an economic system that's already firmly in the past of many developed nations (i.e., one in which all people needed to work constantly in order to produce enough to keep themselves alive).
Of course this is a fundamentally irrational position to hold when one already lives in a society that's content to let people who never work a day in their lives have all their needs taken care of (see: inheritance). It also disregards the fact that many people who have everything literally handed to them from birth still feel a drive to try to do something meaningful with their lives. There are trust-fund parasites who don't do anything, of course, but it certainly isn't 100% of them. Plus, it's pretty well empirically established that humans do get bored and seek things to do even when they have no life-sustaining work left to perform (see: retirement).
What you think of as a mental hurdle I see as a way of discerning what is mine from what is yours. Show me a developed nation where a person actually doesn't have any personal property.
Without personal property rights, people will stop producing for others and society will fail. Why would I be willing to trade my load of firewood to you for your butchered hog? I'd just take your hog and not bother with providing you a share of firewood. And, in that system if you came around to get a share of my firewood, you'd disappear.
I believe that if a person doesn't have their needs met, they just don't deserve to have them met. (I'm not talking about a moralistic judgement here. Its more like the universe has just arranged itself in response to the unlucky person's actions.)
For example, 3 years ago, I got a hammer and a saw and started building a shed. I sold it and bought the materials to build another. I sold that one too. Today, I own a company that manufactures sheds and employs a few people.
I'm now much better off than I was because I decided to take advantage of people willing to buy my product. I now have employees who build my buildings and I profit from them, too. Is this a bad thing? I don't think so, because several of my employees were unemployed and needing work when I hired them.
What's fair about Capitalism is that anyone has the opportunity to make something work. If a person doesn't want to take advantage of this and better their lot, then I believe they have no right to bitch about us making money and having nice things. Let them suffer paycheck to paycheck.
The question is: what happens when most or all of the food and energy is being produced not by human labor, but by fully-automated processes? Why would, say, a farming robot care whether someone is "freeloading" off its labor?
What you think of as a mental hurdle I see as a way of discerning what is mine from what is yours. Show me a developed nation where a person actually doesn't have any personal property.
The idea of a post-scarcity society is not incompatible with the idea of personal property. It is incompatible with continuing to believe that basic necessities such as food, shelter, water, medicine, and possibly other things should be apportioned on a "did you earn it" basis, because that notion dates to a time when it truly was necessary for each person to put in continual effort to ensure enough of those things were produced. These things are no longer super-scarce and no longer require anywhere near the effort to produce that they used to; society should adjust in response to that change.
There is no logical reason, if the capability exists to automatically produce sufficient basic necessities for every human being, why every human being should still have to do a make-work job in order to prove they "deserve" those things. And you could still have all the capitalism you like for anything that isn't a basic necessity; the basic life doesn't have to be one of luxury, just one free from worry about things like food and shelter; the currency of such a society would need to be tied to something other than control of basic-necessity resources, but finding alternative bases for currency is something people already do for fun.
Now, add all the post-processing and transportation logistics after the food comes out of the ground to get to basic staple ingredients. Then add all the preparation activities, cooking, and packing to get to the Hot Pocket/Pop Tart level of salable food (or food-like) product.
Watersheds need to be protected; water needs to be treated, tested, stored, and pumped under pressure through a distribution network of pipes. Sewerage needs to be piped in the other direction, treated, and disposed of.
Electricity needs space, energy input, capital, and opex and a distribution network that needs on-going maintenance and repair. Gas lines need a lot of the same. Internet distribution needs...
Medicine needs space, energy, [lots of] people with specialized training just to apply the state of today's art. It also has a large research and development component responsible for ensuring that we aren't still using leeches to treat "Bilious fever".
The obvious rebuttal is that someone has to build and maintain the farming robot, so this is the guy whom you would be freeloading of.
On a more general note: The concept of property only ever arises because of scarcity. For example, you wouldn't describe yourself as owning the air in your apartment, since there is ample air. A diver, on the other hand, would definitely declare ownership in the air in your air bottle.
So how can we implement a post-scarcity society? My best guess would be to work on affordable technology that makes basic things like water, food, clothes or internet access not scarce anymore.
The other problem is what constitutes basic necessity. I can build you a "human terrarium" of 100 sq ft, HVAC, clean water, disposal, and 4 bottles Soylent per day - leaving you 18 hours daily to procreate & demand more. What is the limit to your demands? You have ample opportunity & resources to earn your own survival with ease; now you demand I provide your total basic survival needs from my own efforts, taking what I would give my own offspring - ENOUGH! BEGONE!
Well, let the people who live on welfare invent and create the machines that will give them free food, water, heat and living space. They surely have a lot of time to devote to that, not having to work for a living.
When was communism actually implemented, that it didn't "work out too well" in your opinion?
The problem is that pesky human nature gets in the way.
What is awesome is a system where everyone benefits when everyone is self-interested.
In power structures, things are great if you're part of the class that receives political favors and not so great if you're not.
In capitalist societies, capital owning classes have the time and resources to be the political class. In previous communist societies, party and administrative members were the political class.
This sounds like theory. In practice, capitalism beats communism in pretty much every way. Of course there are people that own capital. Private ownership is one of the main tenets of capitalism.
Capitalism works because it is on the correct side of human nature. It pushes people to earn more capital, which in turn, helps the rest of us.
Do you think our technology would have advanced this far if we didn't have capitalism? The only reason computers, phones, the Internet are getting better and better is because of competition. The more competition in a market, the cheaper the price is to us, the consumer.
Communism, on the other hand, makes everyone a slave to the state. Why would you want to compete and earn more when it will just be taken away from you by the government?
There were many experiments in the 1970s with communism. People created their own small communities and shared everything. Everyone was equal. The end result was always a disaster: jealousy always fueled the collapse of the group.
Would you want the person in school that never studied for his tests and partied every day to earn the same amount as you, who studied for every test and did well? I sure wouldn't.
Communism, in any form, is a failure. I don't know how much death, poverty, and famine we need to go through for some people to learn this.
A system where everybody was equal was never tried.
A system where the necessities were guaranteed was tried - in the Soviet Union - and it was, by and large, very successful.
It was successful enough, in fact, that Western elites responded to it in the 50s by implementing similar guarantees - NHS, social security, medicare, etc. (McCarthy's witchhunts and the Vietnam war weren't the only responses to communism).
What made the Soviet Union finally unable to keep up economically was the prohibitive cost of the arms race and declining oil export revenues, not the lack of capitalist profit motives.
The NHS actually shows the power of democracy over an elite - after all the 1945 election removed Churchill and voted in the socialist Attlee government. Attlee was so effective as a leader that even Thatcher spoke highly of him:
'Quite contrary to the general tendency of politicians in the Nineties, he was all substance and no show.'
http://www.dailymail.co.uk/debate/article-1194059/A-giant-ma...
Do you think the fact that the UK NHS funding model closely followed the existing Soviet NHS model was a coincidence?
The Tories fought long and hard in the 40s to make the proposed new 'cover everybody' system insurance based (something like Obamacare I guess) and ultimately didn't prevail. They used all sorts of scare tactics that would seem very familiar today.
A large part of that failure was Labour being able to point to the Soviet Union (not yet enemies of the highest order) and go "look, we can achieve the same success in curing infectious disease that they did".
Welfare programs do not even begin to touch on who owns the means of production.
Communism implies a stateless society after a period of power by labor that is devoid of private ownership of the means of production. Supposedly, this transitionary period should do away with class. According to theory, once class is no longer a factor, the state is no longer needed.
Welfare programs, again, do not touch on this at all.
You've read too much Ayn Rand.
A key point you miss: wealth is perishable. Food rots. Weeds grow. Machines rust. Buildings crumble. Durable money is inedible, useful only when exchanged for something perishable.
You really need to read Atlas Shrugged. Comes a point when us producers get sick of you looters, and drop out of society. I'm already feeling enormous strain from my 30-50% tax bracket (most going to a welfare system you want), and debate switching lifestyle to the self sufficient farming I was raised on and which your utopia would receive 0% of.
second, receiving mail was listed as a problem. how to get people their mail for important papers?
third, allocating land for farming their own food. why should they have to take part in the rest of our food economy if they can't fork over $1.25 for an apple? Just let them tend trees with their time.
fourth: transportation. often you have to get someplace. how can we design public transportation so it gets the poorest where they need to go reliably?
Having access to temporary credit means that same problem, but next month.
My late rent fee is $30.
My late utility fee is $5, but if I paid by a bounced check, that would be $35. In other cities, it could be much higher.
The fee for not paying a fine on time can be a weekend stint in jail, whereby you will get charged for room and board.
The fee for not being able to pay for car repairs is losing your job.
The fee for not paying for needed medical attention when you aren't on insurance (Which, despite obamacare, many poor people lack) can be crippling.
Poor people, in aggregate, aren't stupid - they wouldn't use payday loans if the alternatives weren't worse. Yes, it shifts the problem a month out, and puts you in debt for ~$100 dollars. So would juggling your missed payments (Meanwhile, giving you a black mark against your landlord).
That's still better then having the problem today. And who knows? Next month, you may be a millionaire. Or dead. Better worry about that next month.
If you want to kill payday loans, the best way to do that is by giving everyone a living wage/income.
looks at this in complete puzzlement
I'm constantly amazed at just how broken the US system is in almost every possible way.
And just for the record, there is no such thing as payday loans in Europe. At the very least not in Germany. The first time I heard of these was when John Oliver did a segment on them.
A payday loan might have an atrocious interest rate, but it's better than getting kicked out of your apartment because you're $30 short on rent or getting thrown in jail for a parking ticket.
I don't think providing housing for an average of $250 / month is exploitation or predatory.
In fact, a number of mobile home communities are beginning to cater towards child molesters only, because child molesters need homes too. (also, the police tend to hang around sex-offenders and check up on them, so they also make good tenants).
Win/Win for everyone. Sex offenders get a home, and can start rebuilding their lives (although some sex offenses shouldn't be a permanent black-mark on a person's life, but that's a different story). The entrepreneur gets reliable tenants who are otherwise under-served, and the regular checkups from the Police ensure that the unsavory types stay away.
As long as it is profitable, people will build more homes. And as people build homes, the poor and exploited get a chance to rebuild their lives. Now a serious concern is the businesses who exploit their tenants... but if the supply is high enough then the tenants will be able to find new homes / mobile home communities.
--------------
The main problem are the towns who are making mobile homes ILLEGAL, because they find that poor people are unsavory and the town wants to forcibly gentrify themselves.
Elitists are scared of mobile home communities that explicitly cater to say, sex offenders, or poor people, or other "unsavory" types. Not in my community, hell, not even CLOSE to my community / backyard. Think of the children!
That's the problem. Not the people who are building mobile homes, but the fact that mobile homes are slowly becoming straight up illegal in huge portions of communities.
Meetings rarely talk about the budget, for better or for worse. You'll get legions of concerned mothers talking about the dirty homeless people at the motels and ways to build fences around the motels to protect the kids... or Single-Family homeowners complaining about the black people in the Apartments (I kid you not)... and setting up cameras or paying officers / security firms to patrol those locations.
But NEVER have I ever seen anyone complain about low-property taxes of a specific unit at a homeowner's association / town hall. Literally never. People don't give a shit about the budget, they're just too far removed to understand that kind of an issue.
Based on my experience, I'm going to call this elitism, not a budget issue.
Yes, the corner bodega is more expensive than the full grocery store, but they also probably have way lower sales per hour of labor, lower sales per square foot, lower sales per other overhead (rent, insurance, security, utilities, taxes), higher credit card interchange fees, higher shrinkage and spoilage, and pay more for their inbound groceries than the large chain down the street. If my guesses are true, all of these are perfectly legitimate business expenses and the corner store owner needs a return on their investment, just like the large chain does. (Grocers operate on razor-thin overall margins. Average net margin for the supermarket industry was 1.3%, 1.9%, and "1-2%" in the first three references I could find online.) Anything that increases costs basically HAS to go to the price as there's nothing else left to flex.
Payday jackholes can DiaF for all I care, but even the prevalence of those is driving in part by the banking regulations meant to "punish the banks" which have the effect of making poor communities "money losing to serve". When the predictable bank pullouts happen and payday lenders move in, it's not that hard to see the connection. Let the banks make a profit and they'll serve the community; prohibit them from making a profit and they won't, leaving only the even less savory financial businesses.
It's not primarily that people are bad at math. It's that they don't see any other way out. I've seen data that show that people play lotteries "for money" at higher rates the lower their income is. I can't find the exact citation, but here's a CMU article about study that shows something similar: http://www.cmu.edu/news/archive/2008/July/july24_lottery.sht...
We really just need to end state-run lotteries. The problem is that the states depend on this regressive tax for revenue.
But at the very least the states shouldn't be advertising the damn things!
Basically, every so many dollars that are in a savings account for a set period of time counts as one ticket, and so of course the way to increase your chance of winning is to "buy more tickets". Winnings are paid out in lieu of interest, but in the end averages to about the same.
All your justifications are reasonable from a business standpoint. But if I'm so poor and my circumstances are so bad that a bodega is the only place I can realistically go for groceries, what difference does it make to me?
This seems to be the exact point of the original article. Someone is making money off of bodegas, just like someone is making money off of gouging the poor on housing or payday loans, and in all cases the added cost can be justified as "perfectly legitimate business expenses." And the poor continue to suffer and bear the brunt.
You're also still worse off if the bodega closes, right? I think we're just circling on "being hopelessly poor sucks in lots of ways".
Freakonomics did a pretty good episode discussing advantages and problems with it recently.
Yes, payday loans have defait risk, whixh is part of why they are expensive. But that also shows that many borrowers can't acurally afford them. And the cost of defaults is borne by...the next-pooorest people who barely scrape by, who DO lay off their loans, but pay 50-200% APR
Some have suggested that a governmental or other instution needs to be made just to break people out of the cycle and give them a loan at a rate closer to that of credit cards. It's a tricky situation though from a regulatory perspective because you don't want to have those 60% of people who are avoiding massive overdraft fees or dropping credit scores using these services to get stuck with no options.
Personally I think if you sign up for a loan you can't pay, that's on you, not really exploitative as some people seem to propose. Take some personal responsibility, you know?
Generally, if there's a demand for a service, people should come flooding in and reduce the marginal profits through competition. In this case, people came rushing in ... and profit margins went up over time. This alone, in a big picture perspective, suggests shadiness (though not by itself guaranteeing it, since you could argue for growth in demand outstripping the growth in supply).
Their are some easy improvements (education and outreach and banking programs for the poor and poorly educated) and some controversial ones (removing citizen's legal rights and freedoms to make self-destructive decisions)
Do you have any examples of where Frito-Lay, McDonalds, Burger King, etc. are lobbying the government to "keep people in poverty?"
Edit: and as mentioned elsewhere here, state lotteries are another huge government-authorized program that disproportionately takes from the poor.
Make of the anecdote what you will.
For something to be unethical, someone has to be harmed by it, yes?
There are certain constraints that any large-scale system made of people has to work under, for example the sort of things that make communism not work very well at scales larger than a small commune.
Any localized parts of such a system, need to mesh properly with the larger system.
Much that is demonized as "exploitative" (not all, but a lot of it), seems to only be considered as such because people look at the immediate imperfections, and disregard the problems that would result from attempting to "fix" those imperfections.
I contend that the landlord mentioned is an example of this. You and the poster I initially replied to are providing no substantive arguments against this, but merely implying a lack of critical thought by anyone who doesn't stop their reasoning at the immediate local effects.
I suspect that the commenter means that any sociopolitical system other than his or her preferred one is unethical, which is what anyone who makes moral arguments for sociopolitical systems (i.e. nearly everyone I have ever met) is implicitly claiming.
I dont have much beef with the trailer park owner in question, but you are simplifying the variables at play. The net win for everyone would be providing shelter at absolute minimum cost, including for the people maintaining the trailers for others. A landlord's profits may stand in the way of this.
In both cases, you are essentially condemning the person to stay in that position forever with no chance of advancement. It reminds me of the parable of the talents[1]; I tend to agree with its conclusion that the guy who manages 30 skyscrapers should be given this recently-built batch of 12 to manage, since he's already demonstrated competence. It's hard to make this actually happen if you take everything he has except a pittance, so his purchasing power is equal to that of somebody who has no business managing skyscrapers.
[1] https://www.biblegateway.com/passage/?search=Matthew+25%3A14...
In general, I believe people should be incentivized with responsibility, which is in everyone's interest. Cash compensation only benefits one person; doubly so when considering the rate of tax avoidance in the upper echelons of income.
The United States isn't the right country for such a system, though. You might look at Japan: their corporations motivate people with social status more than money. The CEOs there don't directly make a large salary, and neither do the employees. Really, nobody makes a lot of money in Japan.
However, if there isn't marginal land available nearby, a portion of her return is monopolistic-- the renters have no alternative than to pay rent on this land.
Peachum [The Beggar King]: "Because they don't know that we need them."
--Die Dreigroschenoper (1931 Film)
There are many other safer cheaper ways to provide this service - "lay away" would be one.
That's something I have a very hard time to understand. I mainly see that position on HN. It seems like here the price is always justified and fair because it is sanctified by the free market ideology. Prices should always be maximized because it makes sense for the seller and to hell with global long term consequences.
The point is to take as much of the cargo as you can and jump ship just before it catches fire and hope to make it out safe at this point, considering the predatory behavior of capitalists in almost every industry and market nowadays.
How dare these landlords take vacations… in Jamaica!
In short, on HN it's better if you can explore ideas more thoroughly, rather than simply tossing out short quips and assuming everyone is on the same page.
It would be better to write something along the lines of 'When the article says __, this illustrates what Marx was talking about when he defined __ and that ties in with...' or such so there could be more discussion about ideas and less noise about voting or simple opinions.
This is remarkably close to the views expressed in the article, but I guess you're being downvoted because you hit a nerve.
Links for the interested:
https://en.wikipedia.org/wiki/Alienation_of_labor
https://en.wikipedia.org/wiki/Law_of_value
https://en.wikipedia.org/wiki/Commodity_fetishism
https://en.wikipedia.org/wiki/Surplus_value
https://en.wikipedia.org/wiki/Commodification
https://en.wikipedia.org/wiki/Exploitation_of_labor
Also, you probably don't care about the fact that there are labor programs at US prisons where workers are paid cents for the hour to do labor. I think your moral challenge is in bad faith.
That sounds about right to me... I doubt anyone would consider it worth the hassle leasing 131 trailers if the income was say 100k.
The social safety net is pretty simple. Bob, A healthy worker is made unemployed, they can either take state assistance and find work 6 months later, leading to another 30 years of tax revenue, or let them default on mortgage, spiral into poverty and no tax. Now extend that so Bob needs six months rehab.
Housing built, owned and managed by the state (or so closely regulated it may as well be) has been a cornerstone of the social safety net. This article underlines that.
At some point the governments in developed countries have stepped in to set some kind of limit on what's "reasonable".
IMHO, they're not doing enough in America right now, the enormous social divide is showing that to us clearly. Developed countries that have stronger laws have less people in severe poverty, because the government forces the wealthy to distribute their wealth.
So what if WalMart wants to hire someone for 3 cents an hour? Maybe I'd like to pay my doctor $1/hr. Either way, it's probably not going to happen. People will not accept $0.03/hr for a job unless it is of benefit to them. Also I find it incredibly condescending to believe you (or the government) know the opportunities available to people in poverty better than they themselves do.
Lastly with regards to 'government forces the wealthy to distribute their wealth', wealthy people generally have quite a few options, to include the option to exempt themselves from paying what some would consider "their fair share".
Sure. Of course they can't, because most of the time even poor people have other options. Also WalMart has in fact supported raising the minimum wage, which is either a virtuous act of corporate responsibility or an attempt to increase the burden on their competitors.
because the government forces the wealthy to distribute their wealth
I just finished my taxes. Quite a bit of my wealth is being "distributed", unfortunately mostly to well-off retired people and on bombs to drop on the Middle East.
If there were no laws, every company would do this, and there wouldn't be other option.
You think people work in factories in China for $0.50/day even though they have an option to make a good wage?
> Quite a bit of my wealth is being "distributed"
Not nearly as much as if you lived in another developed country, where your money would be paying for healthcare for all, higher education for all, etc. etc.
Do you realize how utterly ridiculous that sounds?
You really think the only thing preventing a company from paying employees $0.03/hr is a law? Minimum wage in SF is $12.25. By your logic, I should expect every employer to pay no more than $12.25/hr. Why do I not see this?
Without laws, there are people making $0.50/day and the air is not breathable in China.
Really, you're going to trot out American healthcare? There is no place on earth with higher healthcare costs than the USA.
One sign of this is that unemployment did not even exist several centuries ago in any kind of manner - all those who were capable (except again, those on top expropriating wealth created during worker's surplus labor time) worked.
This is openly discussed in the business press, like this (http://www.businessweek.com/1999/99_44/b3653163.htm ) BusinessWeek article "When is the jobless rate too low?" It's not a secret that those who control production are working to create unemployment, poverty etc. It's a foundation of the current economic system.
What if single mothers were held responsible for their choice to have children with bad men?
Then children will suffer.
Mothers have no natural human emotions of attachment to their offspring?
What kind of empathy does a mother have for her child that would raise him without a father in poverty? What empathy does a single mother have for the people from whom she is taking money in the form of welfare?
If you have something thoughtful to say about a difficult topic, that's fine, but please don't post ideological rhetoric to HN threads.
At those margins (I don't know what the costs are, but with that little annual profit per trailer it really doesn't matter) there would be no reason to not want the poverty-stricken to have more money, other than perhaps an unwillingness to change business model. The profit margin is just _so_ much greater on more expensive properties.
My main problem is I just don't see what the alternative is. Any rental housing needs to be minimally profitable or no one will bother providing it. That applies at all ends of the pricing spectrum. So if a profit can't even be made, what is the alternative? Millions of people homeless because there are no properties rentable at a price they can afford?
What's the problem that makes taxing land with no ownership untenable?
If someone takes your improvement from you that's theft. We have laws regarding theft in most countries do we not?
A land value tax charges taxes for owning land. Now you're saying that it wouldn't be taxes on the land, but rather, taxes on improvements. Then it's no longer a land value tax at all then. The whole point of a land-value tax is that the tax reflects the potential value of the land, regardless of any improvements that might be on it, e.g. the Empire State Building or a flat parking lot would owe the same amount of LVT in midtown Manhattan. What you are proposing is a regular property tax, which does take improvements into account.
>If something can be stolen from you, then you own it.
Right, you have been grant the right to use the land as long as you pay the taxes, which you may or may not have built a shelter on. You also own the shelter. You don't own the land.
I just don't think that you've thought any of this through, or that you have a coherent image in your mind as to what you're proposing, or how it's different in any way from the status quo.
This was the original point of the game, originally named "The landlords game" and later renamed "Monopoly".
http://www.theguardian.com/lifeandstyle/2015/apr/11/secret-h...
The alternative game to ur-Monopoly, that is "Prosperity", had all rents split up when a player landed on a square. The property owner got a rent payment that reflected the value of the houses/hotels, whereas the rent on the land itself was paid to a common fund.[1]
[1] http://landlordsgame.info/games/lgp-1932/lgp-1932_rules.html
I don't understand what it means 'to take advantage of someone else' in the context of this thread.
Is Starbucks taking advantage of me when I want a coffee by selling me a coffee?
Is Elton John taking advantage of my desire to see him play live at my party and the fact that there is only one of him by charging me a million dollars to appear?
Are the bus companies taking advantage of my need to get to work when they sell me a ticket?
I don't get where normal economic transactions and supply and demand becoming 'taking advantage' or 'exploitation'.
Some transactions leave one side even worse off, but they execute due to ignorance, stupidity, or force. Those are obviously exploitative.
The most obvious form comes from the good old (bs) saying that 'the real price is what the buyer is ready to pay' (feel free to correct me here as to actual form of that).
Hiking up price to a drug (the shkreli story) would be an exploitation and not a 'normal economic transaction'.
So would be buying time of some poor workers in China for a dime. And then selling what they make on a 10x margin and pocketing it. There's nothing economic about that, its plain old theft (or deceit, whatever you want to call it).
There are more subtle forms, like apple spreading bs about their products being 'the best' and them having a 'vision' and then some uninformed fella buying stuff they make when its sometimes twice the price for objectively comparative product. Like always the devil is in the details.
This is all highly endorsed by the 'greed is good' model and it won't stop until we denounce it. No amount of government regulations can change it, snakes will always find a way. It's all in people's heads.
The real problem are systems where rich people doen't have to buy so much taxes of automated productions or property.
People tend to get seriously up in arms about renting, when in reality it's not nearly as bad a deal as they make it out to be. A lot of times it can be a better financial choice than owning.
Some food for thought: http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-op...
Take Edison, for example. He made himself a fortune by figuring out how to take a glass bottle and add a bamboo filament, and sell a light bulb.
http://www.amazon.com/Edison-Biography-Matthew-Josephson/dp/...
You'll be astonished. There's never been anyone else remotely as prolific an inventor.
He pretty much invented the electric power industry. The value of that is almost incalculable. It's hard to see how that is "extractive".
Could you name who you consider a real inventor?
I don't know many people in Silicon Valley but I know a lot of rich people. They definitely have a lack of compunction and some use confidence games to scam and exploit people.
I am not suggesting they are all bad but 90% act like my friends who live in trailers in the Midwest on welfare.
Human nature doesn't care about privilege. I believe education fails to teach critical thinking and tools to face adversity. And this creates situations where rich people lie, or honest investment bankers launder drug money. Or doctors overprescribe drugs, surgeons do unnecessary surgies and rich men exploit young girls. But they all self-rationalize their decisions and never think they are part of the problem. Arrogance, incompetence, greed, stupidity, etc.
There are a ton of successful incompetent people.
In general, I agree with you that it is the individual's job to transcend these challenges but it is ignorant politicians and lazy wealthy and influential people who sustain a system that has so much friction, so much chaos and so many challenges to overcome to get a fraction of what the alleged "elite" get.
My point is, for the most part there is nothing elite about the 1%. There is no secret group controlling the world. If we want to change things, we can.
Yes, knowledge of social class issues (who you know and how to act to get people with money to trust you) can itself be used to make money, in the right environment.
It doesn't mean that educating everyone to behave like the upper classes makes sense. Those skills may not actually work for people who don't look the part or don't have the connections. To the extent that they're adaptive rather than arbitrary class indicators, they might actually be dangerous for someone living in a different environment.
If you dropped them in Africa, yes they would have a harder time. But as a whole, probably get rich again.
What a silly saying. Of course, if you redistribute all the MONEY to everyone, but leave all the means of production in the hands of a few, it's easy to predict that those few would be the ones rich again in 2 or 3 years.
If we define the poor as a group which relies on regular labour to survive, and the wealthy as a group who does not, then many income sources of the wealthy dry up if the poor cease to exist.
One fairly obvious example is renting. The existence of a rental market is not undesirable. People will always want to live in a place temporarily, as a trial, as a holiday, as a stepping stone. But I'd imagine a huge majority of the rental market exists solely because the tenants either cannot afford, or have too little financial security to risk a mortgage.
More broadly, the cost of labour is reduced by the existence of poverty. The minimum wage is an attempt to alleviate this - in a world without poverty, a minimum wage would be unnecessary.
The question is whether we can do better. Axiomatically wealth inequality is good for those on top, at least in a direct sense.
Think about a world with perfect wealth equality and you'd have the opposite sort of problems - like it or not, capitalism and yes, wealth inequality have brought more people out of poverty than any other system in the history of the planet. More of those poor people in 1st world countries are fighting to pay for high end smartphones than to pay for food these days. It's far from black and white, but China is an amazing recent example of this. Going from an agricultural nation of the dirt poor to a highly industrialized nation with a decent middle class in the span of a few decades.
http://ourworldindata.org/data/growth-and-distribution-of-pr...
It's not the wealth inequality that's good for all, it's the capitalist incentive structures. The wealth inequality itself is a negative side effect of those incentives, because it represents an inefficient allocation of resources in terms of utility created.
The question is to what extent the efficiency benefits of capitalist incentives offset the inefficiencies of the resulting wealth inequality. Personally, I think the extent of inequality we permit is far far more than is necessary to incentivise wealth creation. People would still want to be rich even if the alternative didn't suck.
> Personally, I think the extent of inequality we permit is far far more than is necessary to incentivise wealth creation. People would still want to be rich even if the alternative didn't suck.
I see where you're coming from but I think there's definitely a fine line to tread here - if you push this too far you could argue that what you're doing is actually just serving to slow down the march of progress in society and make those poorer individuals lives much worse.
Think about it like this - would you rather be upper class, one of the richest people in the world just 200 years ago or middle class today? The medical and technological advances are so enormous. To hamper them in any way would arguably make many lives much worse. And what you're suggesting poses that risk. We could lose out on many such advances.
To use an extreme example: Sure, maybe you don't feel that medical company shouldn't be raking in so much from a unique patented drug - but what if their next creation with that money is a cure for cancer. These are the risks you take when putting such limits on this system.
Now, that's not to say I'm strictly anti-regulation or anything, just that it's a lot more of a delicate balance than many people make it out to be. You need to be careful to keep those top performers extremely motivated to do more. And if you do things like have a 90% tax rate on the uppermost bracket like some places have, well, don't be surprised when you wind up killing off that kind of thing.
Wealth inequality is the mechanism by which the incentives are supposed to work, but the goal is still the incentives, not the inequality itself. If it were possible to achieve the same without inequality that would be better.
But you say they "should" be wealthy, are you suggesting a model of morality that prefers rewarding merit rather than improving outcomes (even in the long term)?
>To hamper them in any way would arguably make many lives much worse. And what you're suggesting poses that risk. We could lose out on many such advances.
Or we could find out that the excessive inequality was unnecessary, and that we've been giving people shitty lives for no good reason. Or we could even find out that happy people are far more productive than people terrified of poverty. These possibilities are just as much a risk as your suggested outcome.
Personally, I'm inclined to think it would be far better for technological progress to ensure every person has the resources to educate themselves as much as they want without worrying about survival. And I don't think you need to offer people loads of money to give them an incentive to try and cure cancer.
> it's a lot more of a delicate balance than many people make it out to be. You need to be careful to keep those top performers extremely motivated to do more.
At a certain point, inequality can start to act against motivation, because the richest will continue to live in luxury almost regardless of what they do. Higher taxes (and ideally wealth taxes rather than income taxes) can actually encourage them to keep expending effort so they can maintain their standard of living.
In other words, is stable housing a basic right or is it a luxury? If it's a basic right (and/or a net positive if it gives people the chance to bootstrap themselves into higher earnings), then we should strive to increase the reach and quality of tax-funded government housing programs - together with other baseline programs, such as public education, social services, etc. Or if you're a small-government person, substitute "tax-funded" with "charitable" and make it dependent on individuals' goodwills.
If it's a luxury then the status quo seems acceptable - markets need to be able to pick their customers, and baseline services are losing products unless the "exploitative" pricing makes up for it.
Abolishing inequality isn't desirable at all, but the range of inequality doesn't have to go from 0 to billionaire. We can provide a baseline that still leaves enough incentive for people to work their way up but is decent enough to live with dignity, greater than 0. Soviety provides some of that today. Discuss where to draw that line and who, taxpayer or otherwise, can provide it. A functioning society is never completely equal or completely without minimum support, always somewhere in between.
You may argue that the cost is too high and that we'd be better off without those things.
A broader bottom end may mean that it gets a bit harder to make it to that point, but in practice that's not where most of the resources for providing more/better housing would come from anyway. Ambitious people will find a way to make it to the top, while putting their wealth into self-directed charities and moonshot companies instead of government-controlled tax revenue. That's not necessarily a bad thing, and it can and will continue either way.
In the end it's the decision of the broad public, the "middle class" if you will, to determine how much we want to collectively spend on housing security, and how to create mixed-income communities to facilitate upward mobility and avoid creating poor-people slums or monocultural wealth enclaves. The main ingredient for that is (valuable city) land, so I don't believe technology can do much about improving things too much. Nonetheless we always have the option to contribute to affordable housing, universal basic income, yadda yadda. I don't think that's mutually exclusive with high-profile billionaire projects.
Sorry. I was reading my own bias/worldview into it and taking as a given that there will always be people with negative net worth (debts in excessive of assets). You were clear enough in speaking to that as unnecessary, but I read right through that without really internalizing your point of view. (I still believe in any system where credit exists that there will always be some net debtors, but that doesn't give me the right to argue against a point of view you weren't espousing.)
The author mentions a significant root cause in the first paragraph - de-industrialisation. Like so many other American cities, Milwaukee was relatively prosperous before the collapse of the manufacturing industry.
Improved regulation of the rental market would be a minor improvement at best. It's wishful thinking to imagine that poverty could be fixed quickly and at negligible cost to the taxpayer. The problems of poverty are systemic and so are the solutions - better welfare provision, better education, better support for job creation. If we wish to see an end to poverty, we must be willing to pay for it.
You may be onto something there, certainly resources assist with wealth creation, but there's very little that is a sure bet, and risk and reward in the financial sense are frequently correlated. If it is a given that one wishes to minimise the degree to which they are beholden to luck (reducing risk) they are simultaneously frequently taking the other side of that bargain too (reducing reward). And you end up with poor people working terribly bad reward jobs on wages that left to market forces might not even be enough to cover their cost of living at all, but are pushed up by minimum wage laws, and subsidised by state social welfare programs (put it this way, and it's actually the state that profits from the poverty of other people by trading subsistence living for political capital, a conclusion the guardian would likely be utterly horrified by)
People just trying to scrape by, keep a roof over their heads, clothes on their backs and food in their bodies are not prone to taking smart, calculated risks on their financial situation. In fact the example that springs to mind with the kinds of risks that these people take are actually really bad ones (lotteries, gambling in general, etc). They don't for example build a wealth portfolio, start a business, or even just invest in the skills necessary to get a better job that would yield a higher wage.
It seems that risk management education is a vanishingly rare thing in the group under discussion, and perhaps that's something that would go some way to addressing the role that you highlight when you refer to luck.
Taking Desmond as an example, even with no rent he would have to live on $20 a day. That would still be grinding poverty.
Think about Maslow's hierarchy of needs -- people need a base to function properly. When your home can vanish in an instant, it changes your mental stance and influences your behavior negatively.
Government is supposed to represent the people, not slumlords. We've perverted the notion of democracy into some sort of weird embrace where "the economy" (where the economy is whatever special interests weild influence today) is a priority above the public welfare.
If a slumlord, or a corrupt contractor profiting off of others misery (operators of "nonprofit" social services orgs, private prisons, etc) is happy, democracy has failed.
Ever since I first saw Henry George's ideas, I can't stop seeing it everywhere; there's a very real difference between the return to rent than for other capital or labor.
[1] https://en.wikipedia.org/wiki/Geolibertarianism
1) The Right can't recognize there's a problem with contemporary elites ("They Deserved it"). Poverty is all about the government.
2) The Left can't recognize the government plays a role on this . Inequality is all about greedy rich people.
In response to the overwhelming vastness and complexity of this country, debate has degraded into simple truisms yelled at the TV.
Even in immigration - you're either "let everyone in and legalize all the aliens!!!" or "deport everyone and build a wall!"