> Together, they now own three times more than the poorest half of humanity, or 2.8 billion adults. While the gap has stabilized since the end of the Covid-19 pandemic, it has grown sharply over recent decades: Back in 1995, the 0.001% held "only" twice as much as the poorest half.
Important context: here debt is counted as negative. This means a person with no debt but zero wealth also owns more wealth than bottom 20% or so cumulatively because the debts of people cancel out with others wealth. I think this is misleading.
Rich people having too much wealth is not necessarily that bad a thing because most of the investment is in productive companies.
It’s not like they are using their wealth on frivolous consumption. Which means redistribution would only change who controls the investment and not the actual consumption patterns of people. Implication is that poor people will consume the same as before after redistribution with perhaps some extra assets. So nothing materially changes other than some security. Poor people will continue to consume the same as before.
Bigger problem is it’s not so clear that redistribution is necessarily a good thing because I feel the people who made money are more likely to make better decisions on their own companies. I don’t know how companies would fare if for example Amazon were redistributed and run like some public company.
> it’s not so clear that redistribution is necessarily a good thing
It's unclear what you mean by "redistribution".
> I feel the people who made money are more likely to make better decisions on their own companies
The majority of publicly-listed companies aren't majority owned by their founders. They're still focused on profits and being competitive.
Instead of "redistribution" the way you imagine it (central planning), what if it was more like a sovereign wealth fund?
The government owns shares in all companies, like an index fund. It acts like a normal institutional investor. In fact I wouldn't mind contracting out the management of these holdings to a sober company like Vanguard. And dividends from these holdings are used to reduce income taxes. Stop penalizing people for working and earning more.
Yeah and if you make US median income you’re in the top 0.3% of worldwide income. I don’t see all these people giving away to the bottom 99.7%, hahaha.
The question is where this will lead and what, if anything will, should or can be done to put the brakes on this wealth (re-)distribution.
It feels as though over the last few decades, all we have seen is a continuing trend of increasing amounts of wealth being amassed by a smaller and smaller circle of people.
What I find incredibly hard to judge is the point at which the current system leading to this will face violent reorganisation.
We've had feudalism, communism and fascism (and even a few attempts at egalitarian democracies long before that), but they all failed. It is tempting to say they all failed because "they could have never worked". That's easy to say with hindsight.
Once the current experiment implodes, will we all be armchair experts, scoffing at the idea that this could have ever worked also? And if so, why isn't anyone looking at the system and trying to change something?
The other systems usually ended in world wars or violent revolution. Often the ruling class became too comfortable / belligerent, just to then be replaced by the same thing (but maybe with a bit of lag. See the 2nd world war's ending. The middle class thrived up until about the 70s/80s).
Would feudalism have stayed if they'd had the levels of surveillance and AI-powered control we are currently facing? How about communism? Could a planned economy work if that is suddenly super-charged with computers and AI (and the necessary oppression to achieve it)?
Capitalism mixed with strong safeguards ensuring that there is a return for productivity for everyone feels like the best attempt we've made at a system that works for everyone until all the safeguards began being dismantled in the 70s.
Can we return to that system or is regulatory capture irreversible and therefore capitalism will always inevitably lead back to feudalism? And what can be done about it once AI and automation ensure the hegemony can't be touched anymore?
Right. Those are the salient questions. Or to put it another way: extreme imbalance resting on actual or strongly arguable misaligned incentives lead to revolutions. At base justice is the issue. I prefer to avoid revolutions.
So, what are bad incentives and what'd we do about it?
Capitalism in the large is fine. In the medium lens tax avoidance by corporations, and those with a litany of cpas is a problem. The idea that the only function of a corporation is to increase share price is a problem. All these derive from a perspective that all that matters is the next reporting cycle or tax return.
I don't like the Chinese goverment, but i do respect the fact that they think longer term. Show me the money; show me the money is not the America we want or need to be.
Complicated tax code is another area the rich hide behind. Another problem is there are different rules for the top 5% and those connected to politicians. Our current administration in the US is a good example of just how bad that is.
Here is the US we have over corrected from the pre-Carter era in favor of the top 5% and corporations.
If you take any ancient or not so ancient civilization or kingdom, all the wealth including land and people's lives belonged to king/imperator which was appointed by god or something like that.
Isn't is exactly the same with the system we have now?
The question we have to ask is about 99% of population of peasants who work 8h a day same as they did in Mesopotamia. Do they have a living standard, healthcare, possibility to have social bonds, possibility to retire. Basically all the things to have a life.
If peasants are able to have all this, I really don't care if some King of ours has 20 trillion or 50 bazillion. In money or in gold.
Peasants worked ~14 hours a day, and they had no healthcare or ability to retire. The reason you work 8 hours a day, have health care, and the ability to retire is because the 19th and 20th centuries saw an unprecedented transfer of wealth and power from the rich to everyone else, which manifested in labor laws, pensions, etc. Unless you can prove otherwise, the default assumption needs to be that consolidation of wealth will lead to all those privileges being erased.
I wish we could ignore some of these what I think as Sensational Topics. In terms of wealth, distribution etc. There is only one question to be asked and solve which will fix 90% of the problem.
Housing.
I said this during UBI discussions, wealth distribution and the Anti-Big Tech and it is still not getting any attention. Anywhere between 400T to 700T in the world today are Real Estate Assets. The biggest and easier way to solve wealth distribution is allowing Real Estate or average house / home prices to slowly return to 1990s level. Or with 4-5x multiple of average yearly salary.
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[ 2.7 ms ] story [ 40.9 ms ] threadImportant context: here debt is counted as negative. This means a person with no debt but zero wealth also owns more wealth than bottom 20% or so cumulatively because the debts of people cancel out with others wealth. I think this is misleading.
It’s not like they are using their wealth on frivolous consumption. Which means redistribution would only change who controls the investment and not the actual consumption patterns of people. Implication is that poor people will consume the same as before after redistribution with perhaps some extra assets. So nothing materially changes other than some security. Poor people will continue to consume the same as before.
Bigger problem is it’s not so clear that redistribution is necessarily a good thing because I feel the people who made money are more likely to make better decisions on their own companies. I don’t know how companies would fare if for example Amazon were redistributed and run like some public company.
It's unclear what you mean by "redistribution".
> I feel the people who made money are more likely to make better decisions on their own companies
The majority of publicly-listed companies aren't majority owned by their founders. They're still focused on profits and being competitive.
Instead of "redistribution" the way you imagine it (central planning), what if it was more like a sovereign wealth fund?
The government owns shares in all companies, like an index fund. It acts like a normal institutional investor. In fact I wouldn't mind contracting out the management of these holdings to a sober company like Vanguard. And dividends from these holdings are used to reduce income taxes. Stop penalizing people for working and earning more.
It feels as though over the last few decades, all we have seen is a continuing trend of increasing amounts of wealth being amassed by a smaller and smaller circle of people.
What I find incredibly hard to judge is the point at which the current system leading to this will face violent reorganisation.
We've had feudalism, communism and fascism (and even a few attempts at egalitarian democracies long before that), but they all failed. It is tempting to say they all failed because "they could have never worked". That's easy to say with hindsight.
Once the current experiment implodes, will we all be armchair experts, scoffing at the idea that this could have ever worked also? And if so, why isn't anyone looking at the system and trying to change something?
The other systems usually ended in world wars or violent revolution. Often the ruling class became too comfortable / belligerent, just to then be replaced by the same thing (but maybe with a bit of lag. See the 2nd world war's ending. The middle class thrived up until about the 70s/80s).
Would feudalism have stayed if they'd had the levels of surveillance and AI-powered control we are currently facing? How about communism? Could a planned economy work if that is suddenly super-charged with computers and AI (and the necessary oppression to achieve it)?
Capitalism mixed with strong safeguards ensuring that there is a return for productivity for everyone feels like the best attempt we've made at a system that works for everyone until all the safeguards began being dismantled in the 70s.
Can we return to that system or is regulatory capture irreversible and therefore capitalism will always inevitably lead back to feudalism? And what can be done about it once AI and automation ensure the hegemony can't be touched anymore?
I have no answers, only questions...
So, what are bad incentives and what'd we do about it?
Capitalism in the large is fine. In the medium lens tax avoidance by corporations, and those with a litany of cpas is a problem. The idea that the only function of a corporation is to increase share price is a problem. All these derive from a perspective that all that matters is the next reporting cycle or tax return.
I don't like the Chinese goverment, but i do respect the fact that they think longer term. Show me the money; show me the money is not the America we want or need to be.
Complicated tax code is another area the rich hide behind. Another problem is there are different rules for the top 5% and those connected to politicians. Our current administration in the US is a good example of just how bad that is.
Here is the US we have over corrected from the pre-Carter era in favor of the top 5% and corporations.
Isn't is exactly the same with the system we have now?
The question we have to ask is about 99% of population of peasants who work 8h a day same as they did in Mesopotamia. Do they have a living standard, healthcare, possibility to have social bonds, possibility to retire. Basically all the things to have a life.
If peasants are able to have all this, I really don't care if some King of ours has 20 trillion or 50 bazillion. In money or in gold.
Housing.
I said this during UBI discussions, wealth distribution and the Anti-Big Tech and it is still not getting any attention. Anywhere between 400T to 700T in the world today are Real Estate Assets. The biggest and easier way to solve wealth distribution is allowing Real Estate or average house / home prices to slowly return to 1990s level. Or with 4-5x multiple of average yearly salary.