10 ms·

Is the problem inequality or that the income is below a threshold that would guarantee safety and pray of mind?

learnstats2 6y ago
Aren't those the same? If you raised everyone's income above a minimum threshold, that would reduce income inequality by almost any measure. Gini coefficient (the most commonly used inequality measure) effectively uses logarithms in its calculations: so raising incomes away from zero is the most effective way of reducing inequality by this metric (and most other metrics, and, I think, in most people's minds). [Edit: are y'all down-voting because I said something technically wrong, or because you disagree in your mind? I'd like to know.]
- darkerside 6y ago
  What if you did it in a way that makes Bezos even richer? What if you could increase low end incomes while simultaneously worsening inequality? Should we do it? My vote is, of course. But I'm genuinely curious to hear the counter argument.
  - learnstats2 6y ago
    The fact that Bezos can get incredibly richer this year, while other people struggle harder is symptomatic of a system that allows inequality - it's not that Bezos getting richer in itself causes inequality. Bezos's wealth is already effectively unbounded. He has the same wealth as ~50% of the population of United States altogether. That won't immediately change if you uplift poor people's income (since income is not wealth). Why is it important to consider his right to get even richer?
    - WalterBright 6y ago
      > Why is it important to consider his right to get even richer? Because it has a correlation with making a lot of other peoples' lives better. For example, I needed to do some repairs two days ago, and ordered the parts necessary from Amazon, and received the parts yesterday. I didn't have to spend 2 hours driving somewhere to get those parts. That extra 2 hours is a benefit to my life. Amazon, in aggregate, has saved me a great deal of time. Another benefit Amazon provides is selection - I can find much more exactly what I want, rather than accepting whatever the store has.
      - learnstats2 6y ago
        This example is a specific benefit, but not one that Amazon has provided. It's a benefit that online shopping has provided, which Amazon has monopolized, partly via suppressing competition and exploiting labour (which society has to pay for in other ways).
        WalterBright 6y ago
        Amazon utterly revolutionized online shopping, a benefit Amazon provided. There's simply no way it could have otherwise grown to the biggest company in the world from a garage in Bellevue. 25 years later it's easy to assume that online shopping was always like it is today. No way. Nobody even conceived of what it has become. I remember, for example, when ordering by mail meant "allow 3 to 6 weeks for delivery". I'm still astonished by next day delivery - which Amazon created and made ordinary.
        darkerside 6y ago
        I agree. They revolutionized it in a way nobody else was prepared to do. I think there should be regulations to make sure labor is treated fairly, rather than any kind of specific measure to reduce inequality, which seems like a vanity metric to me.
        WalterBright 6y ago
        Yes, nobody is arguing for unfair labor practices. For another example, Sears used to be the king of mail order. Famously, you could even mail order a house! It was delivered on a pallet and you got to put it together. I used to buy lots from the Sears mail order catalog. It was fun just thumbing through it. Amazon wiped it off the map, from a garage.
        learnstats2 6y ago
        > partly via suppressing competition and exploiting labour
  - eeZah7Ux 6y ago
    > What if you could increase low end incomes while simultaneously worsening inequality? That it absurd. If you double the wealth and income of every person on the world, nothing changes. Same gini coefficient, same poverty. The sum of all money and other financial objects might change in numerical value but still represents the current amount of goods and land that exist on the planet.
    - nicoburns 6y ago
      I'd argue that you haven't really increased incomes at all if you simply double the monetary amount. To actually increase wealth/incomes you'd have increase the amount of material goods, services, and realise improvements to their quality of life.
      - andi999 6y ago
        And that exactly happend with globalization for US cititin.
      - eeZah7Ux 6y ago
        > I'd argue that you haven't really increased incomes at all if you simply double the monetary amount That's what I wrote.
    - olalonde 6y ago
      > Same gini coefficient, same poverty. That statement is obviously false. The US and Haiti have about the same gini coefficient. > If you double the wealth and income of every person on the world, nothing changes. The commenter surely meant doubling material wealth (as you put it, the "current amount of goods and land that exist on the planet"), not just some abstract numerical value.
      - eeZah7Ux 6y ago
        >> Same gini coefficient, same poverty. > That statement is obviously false. The US and Haiti have about the same gini coefficient. I'm comparing before the doubling and after, not across different countries. facepalm > The commenter surely meant doubling material wealth That post clearly reads "What if you could increase low end incomes".
  - nicoburns 6y ago
    > What if you could increase low end incomes while simultaneously worsening inequality? If you could increase them more than you would be able to by redistributing wealth, then I think you should. But I can't think of any scenario where this is evenly remotely close to being the case. In practice we have plentiful but finite resources, and by far the easiest and most practical way to increase lower end incomes would be to redistribute our existing wealth.
    - andi999 6y ago
      The size of the cake is not fixed. Excessive redistribution somehow leads to less cake production.
      - nicoburns 6y ago
        It's not fixed, but neither is it unbounded. > Excessive redistribution somehow leads to less cake production. Indeed, but emphasis on excessive. I'd argue that we currently have an excessive lack of redistribution which is also leading to less cake production.
        andi999 6y ago
        Agree, a balance has to be found, I would say most of Europe is in balance. Cake could be (practically) unbounded, since (real) value can increase with actually less consumption of resources.
        nicoburns 6y ago
        > Cake could be (practically) unbounded, since (real) value can increase with actually less consumption of resources. I don't think this follows. Yes we can make better use of resources, but there's a limit. And given the huge wealth differentials (two or three orders of magnitude) it's feasible and even likely that that limit is lower than the amount of wealth available for redistribution.
        6y ago
  - adsche 6y ago
    Seems to me that everything then would simply become more expensive to sustain Bezos's (or others') wealth?
unishark 6y ago
Or that bad parents also are bad employees and earn less money.
- nerdponx 6y ago
  Are you suggesting that being "bad" is systematically causal for low income? The standard of evidence would be quite high for such a claim.
  - roel_v 6y ago
    What? Why? How is it not self evident that people with poor decision making skills will, on average, have low incomes?
    - justatdotin 6y ago
      because some people earning very high incomes do so by indulging poor decision making.
    - z3t4 6y ago
      Its not about the choises - its about the available options to choose from.
    - mmmmmk 6y ago
      Because that ignores the complexities of the labor market, the economy and life
    - hairofadog 6y ago
      Anecdotally, I see many people with poor decision-making skills prosper because they were born into wealth, and conversely many who make the best decisions available to them yet fail to thrive because of situational challenges (or, for example, the decision to become a schoolteacher in the US). Bad decisions may (may) lead you to financial ruin, but financial ruin is not an indicator of bad decisions.
      - 6y ago
tchalla 6y ago
In my view, the problem is societal outcomes like the one we see in the linked article. The factor that compounds the problem is income equality. Your question is interesting but I'd like to rephrase it a bit. What should the minimum income threshold be that puts reasonable guarantees on desired societal outcomes?
- nicoburns 6y ago
  This should probably be expressed as a proportion of total economic output rather than a dollar amount. Because ultimately money represents a share of societies economic output.
- WalterBright 6y ago
  > the problem is income equality Why should relative levels of income be determinative rather than absolute levels of income?
nicoburns 6y ago
Disproportionately large incomes also cause significant problems to capitalist societies, because our market system is predicated on the idea that we indicate our preferences by spending our money on the things we want. That system breaks down when a significant proportion of the wealth is controlled by only a few people, leading to many of the same problems you get in planned economies that have a similar concentration of power.
- kebman 6y ago
  What you're talking about reminds me of the horseshoe model of politics. I've always found it fascinating how corporatism is so similar to aspects of communism, or how communist bureaus in some ways are very similar to corporations with huge market shares (de facto monopolies, with only token competition being allowed). A corporation of course works under the system of capitalism, which is often said to be the antithesis of communism. Yet the outcome of either model goven monopolist tendencies and largesse is strangely similar.
  - tartoran 6y ago
    Having experienced both I confirm that there are a whole lot of similarities between the two
  - simoom22 6y ago
    In political economy literature, the Soviet Union is often called a "state capitalist" type of economy rather than communist. It functioned as a giant corporation in global capitalism. https://en.m.wikipedia.org/wiki/State_capitalism https://en.m.wikipedia.org/wiki/State_capitalism
- deleted 6y ago
  [deleted]
- bjornsing 6y ago
  You switched from spending money to wealth. That exposed a weakness in the argument: it’s only when wealth is spent that the problem arises (if it exists at all).
kwhitefoot 6y ago
Most likely inequality has an effect in addition to any problems caused by the absolute level of income. Remember that this study was done in Denmark which has a functioning welfare state (no doubt imperfect of course), so not very many of the people in question would suffer severe physical privation. It would be interesting to see a similar study in a country where being in the bottom quintile also meant being absolutely poor.
- deleted 6y ago
  [deleted]
- zozbot234 6y ago
  Is it a real effect, or a mere correlation between relative low income and other kinds of social marginalization and/or lack of social capital? It's not always easy to measure the latter at an individual or household level (hence why relative SES is often used as a correlate), but there's plenty of research highlighting the importance of social capital provision at a broader community scale.
dalbasal 6y ago
>> Is the problem inequality or that the income is below... I'm not sure this is a valid (in a Popperian sense) QUESTION. Income is interrelated to a motherload of other population factors that interact in complex ways. Things can be both cause and effect. You live in a cheap neighborhood because you're broke. Maybe this low income neighborhood or has worse jobs or worse schools. Maybe crime is high. Stress. Mental health. Relationship consequences. Financial consequences Etc. These things are complex in practice and can span communities/societies. I don't think we can understand these things fully or mechanically. There's plenty of evidence, theory, and common sense that such problems stack. No theory or measurement is definitive, IMO. Weather you theorize about the world or deal in data, you're probably not distinguishing between income and income inequality well. They're too tightly interlinked in practice. That said, I doubt that middle-quintile income groups in much poorer countries than Denmark exhibit the same mental health patterns as bottom quintile groups in Denmark. So... "income threshold, not income inequality" probably isn't true in that sense. I wouldn't jump to the opposite conclusion either, that absolute income thresholds don't matter either. I just don't think we can reach conclusions about social issues in perfect isolation from each other. Society doesn't work that way, so it's hard to reach conclusions about it that way. In practice, income and income inequality within societies exist in an interlinked way. We don't generally affect one without the other. We can't easily study/measure it either. Parsed as a strict-sih Popperian question, it just ends up being a moot question. Maybe in a human petri dish it's possible that mental health is totally unrelated to income. Does that even mean anything?
- jiggunjer 6y ago
  what a verbose way to say correlation isn't causality.

Aren't those the same? If you raised everyone's income above a minimum threshold, that would reduce income inequality by almost any measure. Gini coefficient (the most commonly used inequality measure) effectively uses logarithms in its calculations: so raising incomes away from zero is the most effective way of reducing inequality by this metric (and most other metrics, and, I think, in most people's minds). [Edit: are y'all down-voting because I said something technically wrong, or because you disagree in your mind? I'd like to know.]

darkerside 6y ago
What if you did it in a way that makes Bezos even richer? What if you could increase low end incomes while simultaneously worsening inequality? Should we do it? My vote is, of course. But I'm genuinely curious to hear the counter argument.
- learnstats2 6y ago
  The fact that Bezos can get incredibly richer this year, while other people struggle harder is symptomatic of a system that allows inequality - it's not that Bezos getting richer in itself causes inequality. Bezos's wealth is already effectively unbounded. He has the same wealth as ~50% of the population of United States altogether. That won't immediately change if you uplift poor people's income (since income is not wealth). Why is it important to consider his right to get even richer?
  - WalterBright 6y ago
    > Why is it important to consider his right to get even richer? Because it has a correlation with making a lot of other peoples' lives better. For example, I needed to do some repairs two days ago, and ordered the parts necessary from Amazon, and received the parts yesterday. I didn't have to spend 2 hours driving somewhere to get those parts. That extra 2 hours is a benefit to my life. Amazon, in aggregate, has saved me a great deal of time. Another benefit Amazon provides is selection - I can find much more exactly what I want, rather than accepting whatever the store has.
    - learnstats2 6y ago
      This example is a specific benefit, but not one that Amazon has provided. It's a benefit that online shopping has provided, which Amazon has monopolized, partly via suppressing competition and exploiting labour (which society has to pay for in other ways).
      - WalterBright 6y ago
        Amazon utterly revolutionized online shopping, a benefit Amazon provided. There's simply no way it could have otherwise grown to the biggest company in the world from a garage in Bellevue. 25 years later it's easy to assume that online shopping was always like it is today. No way. Nobody even conceived of what it has become. I remember, for example, when ordering by mail meant "allow 3 to 6 weeks for delivery". I'm still astonished by next day delivery - which Amazon created and made ordinary.
        darkerside 6y ago
        I agree. They revolutionized it in a way nobody else was prepared to do. I think there should be regulations to make sure labor is treated fairly, rather than any kind of specific measure to reduce inequality, which seems like a vanity metric to me.
        WalterBright 6y ago
        Yes, nobody is arguing for unfair labor practices. For another example, Sears used to be the king of mail order. Famously, you could even mail order a house! It was delivered on a pallet and you got to put it together. I used to buy lots from the Sears mail order catalog. It was fun just thumbing through it. Amazon wiped it off the map, from a garage.
        learnstats2 6y ago
        > partly via suppressing competition and exploiting labour
- eeZah7Ux 6y ago
  > What if you could increase low end incomes while simultaneously worsening inequality? That it absurd. If you double the wealth and income of every person on the world, nothing changes. Same gini coefficient, same poverty. The sum of all money and other financial objects might change in numerical value but still represents the current amount of goods and land that exist on the planet.
  - nicoburns 6y ago
    I'd argue that you haven't really increased incomes at all if you simply double the monetary amount. To actually increase wealth/incomes you'd have increase the amount of material goods, services, and realise improvements to their quality of life.
    - andi999 6y ago
      And that exactly happend with globalization for US cititin.
    - eeZah7Ux 6y ago
      > I'd argue that you haven't really increased incomes at all if you simply double the monetary amount That's what I wrote.
  - olalonde 6y ago
    > Same gini coefficient, same poverty. That statement is obviously false. The US and Haiti have about the same gini coefficient. > If you double the wealth and income of every person on the world, nothing changes. The commenter surely meant doubling material wealth (as you put it, the "current amount of goods and land that exist on the planet"), not just some abstract numerical value.
    - eeZah7Ux 6y ago
      >> Same gini coefficient, same poverty. > That statement is obviously false. The US and Haiti have about the same gini coefficient. I'm comparing before the doubling and after, not across different countries. facepalm > The commenter surely meant doubling material wealth That post clearly reads "What if you could increase low end incomes".
- nicoburns 6y ago
  > What if you could increase low end incomes while simultaneously worsening inequality? If you could increase them more than you would be able to by redistributing wealth, then I think you should. But I can't think of any scenario where this is evenly remotely close to being the case. In practice we have plentiful but finite resources, and by far the easiest and most practical way to increase lower end incomes would be to redistribute our existing wealth.
  - andi999 6y ago
    The size of the cake is not fixed. Excessive redistribution somehow leads to less cake production.
    - nicoburns 6y ago
      It's not fixed, but neither is it unbounded. > Excessive redistribution somehow leads to less cake production. Indeed, but emphasis on excessive. I'd argue that we currently have an excessive lack of redistribution which is also leading to less cake production.
      - andi999 6y ago
        Agree, a balance has to be found, I would say most of Europe is in balance. Cake could be (practically) unbounded, since (real) value can increase with actually less consumption of resources.
        nicoburns 6y ago
        > Cake could be (practically) unbounded, since (real) value can increase with actually less consumption of resources. I don't think this follows. Yes we can make better use of resources, but there's a limit. And given the huge wealth differentials (two or three orders of magnitude) it's feasible and even likely that that limit is lower than the amount of wealth available for redistribution.
        6y ago
- adsche 6y ago
  Seems to me that everything then would simply become more expensive to sustain Bezos's (or others') wealth?

unishark 6y ago

Or that bad parents also are bad employees and earn less money.

nerdponx 6y ago
Are you suggesting that being "bad" is systematically causal for low income? The standard of evidence would be quite high for such a claim.
- roel_v 6y ago
  What? Why? How is it not self evident that people with poor decision making skills will, on average, have low incomes?
  - justatdotin 6y ago
    because some people earning very high incomes do so by indulging poor decision making.
  - z3t4 6y ago
    Its not about the choises - its about the available options to choose from.
  - mmmmmk 6y ago
    Because that ignores the complexities of the labor market, the economy and life
  - hairofadog 6y ago
    Anecdotally, I see many people with poor decision-making skills prosper because they were born into wealth, and conversely many who make the best decisions available to them yet fail to thrive because of situational challenges (or, for example, the decision to become a schoolteacher in the US). Bad decisions may (may) lead you to financial ruin, but financial ruin is not an indicator of bad decisions.
    - 6y ago

tchalla 6y ago

In my view, the problem is societal outcomes like the one we see in the linked article. The factor that compounds the problem is income equality. Your question is interesting but I'd like to rephrase it a bit. What should the minimum income threshold be that puts reasonable guarantees on desired societal outcomes?

nicoburns 6y ago
This should probably be expressed as a proportion of total economic output rather than a dollar amount. Because ultimately money represents a share of societies economic output.
WalterBright 6y ago
> the problem is income equality Why should relative levels of income be determinative rather than absolute levels of income?

nicoburns 6y ago

Disproportionately large incomes also cause significant problems to capitalist societies, because our market system is predicated on the idea that we indicate our preferences by spending our money on the things we want. That system breaks down when a significant proportion of the wealth is controlled by only a few people, leading to many of the same problems you get in planned economies that have a similar concentration of power.

kebman 6y ago
What you're talking about reminds me of the horseshoe model of politics. I've always found it fascinating how corporatism is so similar to aspects of communism, or how communist bureaus in some ways are very similar to corporations with huge market shares (de facto monopolies, with only token competition being allowed). A corporation of course works under the system of capitalism, which is often said to be the antithesis of communism. Yet the outcome of either model goven monopolist tendencies and largesse is strangely similar.
- tartoran 6y ago
  Having experienced both I confirm that there are a whole lot of similarities between the two
- simoom22 6y ago
  In political economy literature, the Soviet Union is often called a "state capitalist" type of economy rather than communist. It functioned as a giant corporation in global capitalism. https://en.m.wikipedia.org/wiki/State_capitalism https://en.m.wikipedia.org/wiki/State_capitalism
deleted 6y ago
[deleted]
bjornsing 6y ago
You switched from spending money to wealth. That exposed a weakness in the argument: it’s only when wealth is spent that the problem arises (if it exists at all).

kwhitefoot 6y ago

Most likely inequality has an effect in addition to any problems caused by the absolute level of income. Remember that this study was done in Denmark which has a functioning welfare state (no doubt imperfect of course), so not very many of the people in question would suffer severe physical privation. It would be interesting to see a similar study in a country where being in the bottom quintile also meant being absolutely poor.

deleted 6y ago
[deleted]
zozbot234 6y ago
Is it a real effect, or a mere correlation between relative low income and other kinds of social marginalization and/or lack of social capital? It's not always easy to measure the latter at an individual or household level (hence why relative SES is often used as a correlate), but there's plenty of research highlighting the importance of social capital provision at a broader community scale.

dalbasal 6y ago

>> Is the problem inequality or that the income is below... I'm not sure this is a valid (in a Popperian sense) QUESTION. Income is interrelated to a motherload of other population factors that interact in complex ways. Things can be both cause and effect. You live in a cheap neighborhood because you're broke. Maybe this low income neighborhood or has worse jobs or worse schools. Maybe crime is high. Stress. Mental health. Relationship consequences. Financial consequences Etc. These things are complex in practice and can span communities/societies. I don't think we can understand these things fully or mechanically. There's plenty of evidence, theory, and common sense that such problems stack. No theory or measurement is definitive, IMO. Weather you theorize about the world or deal in data, you're probably not distinguishing between income and income inequality well. They're too tightly interlinked in practice. That said, I doubt that middle-quintile income groups in much poorer countries than Denmark exhibit the same mental health patterns as bottom quintile groups in Denmark. So... "income threshold, not income inequality" probably isn't true in that sense. I wouldn't jump to the opposite conclusion either, that absolute income thresholds don't matter either. I just don't think we can reach conclusions about social issues in perfect isolation from each other. Society doesn't work that way, so it's hard to reach conclusions about it that way. In practice, income and income inequality within societies exist in an interlinked way. We don't generally affect one without the other. We can't easily study/measure it either. Parsed as a strict-sih Popperian question, it just ends up being a moot question. Maybe in a human petri dish it's possible that mental health is totally unrelated to income. Does that even mean anything?

jiggunjer 6y ago
what a verbose way to say correlation isn't causality.