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Ok. Here's a response to his central argument: pg argues we shouldn't attack inequality itself because inequality has both good and bad causes and is thus amor

by tkiley 11y ago

Ok. Here's a response to his central argument: pg argues we shouldn't attack inequality itself because inequality has both good and bad causes and is thus amoral. He argues we should focus on the bad causes instead. I disagree. Inequality may have good and bad causes, but it is not amoral. Persistent transgenerational inequality is, by definition, the breakdown of democracy, meritocracy, and universal opportunity, and it is bad, even if it is caused by good things. Inequality is a bad side effect of (usually) good processes. We already have an economic term for this: It's a negative externality - like environmental pollution. The similarities between inequality and pollution give me considerable pause for thought. Both can grow or dissipate over time in the right conditions. Both are growing much too quickly right now, threatening to cause severe damage to our biological and economic ecosystems. It is important that we recognize inequality as categorically bad, even when it is caused by good things like entrepreneurship. This allows us to have real discussions about how we keep inequality - like pollution - under control. Ironically, this will preserve the democratic and meritocratic tendencies that have made the past 50 years such a great time for startups.

TheOtherHobbes 11y ago
That's a very insightful analogy. But the concept of "externalities" only applies because the game of acquisition is loaded in ways that - literally - doesn't account for social and environmental damage. There would be much less inequality, and much less pollution, if the effects of both were costed accurately. Free-marketers always argue that there would be much less innovation too. I think that's nonsense. You maximise growth by lowering the cost of entry to new markets as far as it will go, and making business-building as attractive as you can make it to anyone who has a service or product to offer. Traditionally this is rationed by very limited access to capital. In an innovation economy, with more equality, much wider access to capital would not only increase economic participation for most of the population, it would also make entrepreneurial activity a lot more possible. This is the opposite of the current model, where you can only access capital by being born into the oligarchy, or being persuasive enough to talk your way into it past the gatekeepers, or - much too rarely - having the talent and energy to bootstrap a successful business from a cold start. Inequality is a form of rationing. It's inexcusably stupid and self-destructive in any culture that considers itself economically civilised.

by tkiley 11y ago

TheOtherHobbes 11y ago

That's a very insightful analogy. But the concept of "externalities" only applies because the game of acquisition is loaded in ways that - literally - doesn't account for social and environmental damage. There would be much less inequality, and much less pollution, if the effects of both were costed accurately. Free-marketers always argue that there would be much less innovation too. I think that's nonsense. You maximise growth by lowering the cost of entry to new markets as far as it will go, and making business-building as attractive as you can make it to anyone who has a service or product to offer. Traditionally this is rationed by very limited access to capital. In an innovation economy, with more equality, much wider access to capital would not only increase economic participation for most of the population, it would also make entrepreneurial activity a lot more possible. This is the opposite of the current model, where you can only access capital by being born into the oligarchy, or being persuasive enough to talk your way into it past the gatekeepers, or - much too rarely - having the talent and energy to bootstrap a successful business from a cold start. Inequality is a form of rationing. It's inexcusably stupid and self-destructive in any culture that considers itself economically civilised.