record inequality

[ASH]

Re: record inequality

ASH,

If you were Average, would you rather have Stronger adhere to your value system . . . or mine?

If he follows your system, you die (if I understand you correctly).
If he follows mine, you live.

If I were Average in the parable, I would prefer that Stronger adhere to your value system, based upon my practical needs. That doesn't seem very controversial to me.

The next step in this construction is usually to invoke Rawls's "veil of ignorance" or some such. As I understand it, Rawls's proposition is roughly that the "best" rules for society would be those chosen by its members in advance, if they were unaware of what role they would play in that society, and what advantages or disadvantages they might have. Rather than launching into a critique of Rawls without knowing for sure if this is where you are going, I'll wait for your response.

But I will mention that my hypothetical preference that Stronger adhere to your value system, were I Average in the parable, doesn't cause me any logical discomfort. I've already stated that I view moral preferences both as subjective and distinct from practical preferences, so what I would prefer on a practical basis were I someone else is largely disconnected from my concept of what "morality" means.

[raja]

Re: record inequality

If I were Average in the parable, I would prefer that Stronger adhere to your value system, based upon my practical needs. That doesn't seem very controversial to me.

The next step in this construction is usually to invoke Rawls's "veil of ignorance" or some such. As I understand it, Rawls's proposition is roughly that the "best" rules for society would be those chosen by its members in advance, if they were unaware of what role they would play in that society, and what advantages or disadvantages they might have. Rather than launching into a critique of Rawls without knowing for sure if this is where you are going, I'll wait for your response.

But I will mention that my hypothetical preference that Stronger adhere to your value system, were I Average in the parable, doesn't cause me any logical discomfort. I've already stated that I view moral preferences both as subjective and distinct from practical preferences, so what I would prefer on a practical basis were I someone else is largely disconnected from my concept of what "morality" means.

If you were Stronger, would you prefer my value system, or would prefer you value system and let Average starve? (If I am understanding your value system correctly -- that Stronger can gather more coconuts so he deserves them regardless of the well being of his fellow islanders.)

If you were Smarter, would you prefer my value system, or would you prefer to see Average starve?

[Rajiv]

Re: record inequality

Also

Matthew 19:24, Mark 10:25, Luke 18:25 "Again I say to you, it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God."

[flintlock]

Re: record inequality

Maybe you should think that through again.

http://pensionpulse.blogspot.com/200...th-bubble.html



Seems he found some other way to lose his money.

Apparently so. The company that bears his name still sucks.

[ASH]

Re: record inequality

If you were Stronger, would you prefer my value system, or would prefer you value system and let Average starve? (If I am understanding your value system correctly -- that Stronger can gather more coconuts so he deserves them regardless of the well being of his fellow islanders.)

If you were Smarter, would you prefer my value system, or would you prefer to see Average starve?

I see what is causing the confusion. I have been applying my value system to judge the hypothetical actions of the island inhabitants, based upon my understanding of what you said their motivations and decisions are. That is different from saying what my motivations would be if I was on the island. You said "Stronger will do this" and "Smarter will do that", and I said whether I thought those decisions were moral. Now you ask "What would you do if you were Stronger or Smarter?", and that is a different matter.

In my value system, were I in the position of Stronger or Smarter, I would likely help Average out. Whether or not I would help Average depends upon hypotheticals which you did not stipulate in your original statement of the problem, but in general I like people and feel empathy for them, and I wouldn't let somebody starve just because I thought they deserved to starve. I think it would be moral to let Average starve, under the circumstances, but unlike the characters in your parable, I think the dis-utility of Average starving would outweigh the marginal utility of extra coconuts (and this doesn't count any of the practical reasons I might need Average around if the island was a more complicated place). If, however, Average lived on an entirely different island, I had never met him, and I didn't have to see him starve... well, then, I would likely allow him to starve in order to enjoy my coconuts. My point is that the reason I would help Average out has little to do with broadly applicable principles of morality. I would go so far as to posit that my instinct to cooperate with Average is tied to the general possibility of forming a community on mutually-beneficial terms, and that this is also the reason why I care less about him if I'm unlikely to interact with him.

[unlucky]

Re: record inequality

If a person earns 155,000$ a year by producing goods that improve the lives of others and that others willingly pay for, then I would say he's entitled to it even if everyone else is only earning 20,000$ a year. The only way to stop him earning so much would be to stop him producing said goods, thereby impoverishing everyone.

But there's a big problem when workers collectively produce more over time but don't see their wages keep pace. This is what has happened to average workers in the US over the last 25 years. And in the last 10 years the phenomenon has spread from blue-collar to white-collar workers. Conventional economists have lots of labored explanations for it but it seems to me there's a part of the puzzle they haven't grasped, just as they didn't grasp the impending FIRE implosion...

[flintlock]

Re: record inequality

If a person earns 155,000$ a year by producing goods that improve the lives of others and that others willingly pay for, then I would say he's entitled to it even if everyone else is only earning 20,000$ a year. The only way to stop him earning so much would be to stop him producing said goods, thereby impoverishing everyone.

But there's a big problem when workers collectively produce more over time but don't see their wages keep pace. This is what has happened to average workers in the US over the last 25 years. And in the last 10 years the phenomenon has spread from blue-collar to white-collar workers. Conventional economists have lots of labored explanations for it but it seems to me there's a part of the puzzle they haven't grasped, just as they didn't grasp the impending FIRE implosion...

I think its pretty simple. I think at least part of the reason for stagnant wages is the natural leveling you get with increasing globalism. With less barriers these days, any job that can be done by cheaper labor will be done by cheaper labor. Good jobs get replaced by lower paying service jobs. Its a bigger playing field now, and when the average wage is lower throughout the world than in the US, it's only natural US wages will drop to seek out the equilibrium point. In the past countries traded products and raw materials. Now they trade labor as well.

Picture two buckets of water connected by a pipe with a closed valve. One is almost full, the other almost empty. Open the valve and the water will end up the same level in the two buckets. We are in the process of this self leveling now. Anyone not part of the Rentier class or the political elite will eventually be subject to this phenomena. The higher up the skills and education ladder you are the less this will affect you. But it has to affect everyone in some regard. Even it its just because no one can afford to pay your fees anymore or buy the products your company sells. America's consumer based economy needs consumers who can afford to buy things. The crazy lending of the past was an attempt to prolong the party but now the party is over.


The American worker never realized how good he had it before the valve was opened. The foreign worker never realized how BAD he had it.

[cjppjc]

Re: record inequality

Also

Matthew 19:24, Mark 10:25, Luke 18:25 "Again I say to you, it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God."

Would it not be good to enlist the help of the materially well off even if they are spiritually bankrupt to effect change? cjppjc 5:18

[marvenger]

Re: record inequality

when i was abstracting to try to understand the world a while back it seemed to me that yeah you've got followers and you've got leaders. The followers are generally looking for some safety and something in it for them. You can get altruistic leaders or leaders that are basically greedy and want to gain power and do so by giving their followers what they want in return for substantial control over them(think this is how the magic of capitalism works), the greedy leaders tend to dominate. The power and reward for followers is a delicate balancing act, with the powerful always trying to understand just how much they can squeeze out. The powerful also cannot be too altruistic or they lose the source of their power by being able to offer protection.

I don't want to be a follower or a leader cjppjc, what a stupid game. It's bloody hard trying to be your own man, but i think you're right about change having to come from within, people have to stop wanting protection and stop wanting something for themselves, just be yourself, that's the only way the stupid game will end.

[cjppjc]

Re: record inequality

I don't want to be a follower or a leader cjppjc, what a stupid game. It's bloody hard trying to be your own man, but i think you're right about change having to come from within, people have to stop wanting protection and stop wanting something for themselves, just be yourself, that's the only way the stupid game will end.

Of course it's bloody hard to be your own man. Anything worthwhile is hard. I think for you to see the truth about REAL change is wonderful. Once a person SEES and remembers he is never the same. As someone once said if change begins in the social structure, then of course I am with you. What you say about followers is what leads people to want change to begin in the social structure. It is easier than to change yourself. I have a better chance of changing my surroundings than to really change myself.


At 3:20 an awesome thought.

http://www.youtube.com/watch?v=WEIfM...eature=related

[ASH]

Re: record inequality

But there's a big problem when workers collectively produce more over time but don't see their wages keep pace. This is what has happened to average workers in the US over the last 25 years. And in the last 10 years the phenomenon has spread from blue-collar to white-collar workers. Conventional economists have lots of labored explanations for it but it seems to me there's a part of the puzzle they haven't grasped, just as they didn't grasp the impending FIRE implosion...

Is there any way to determine if the productivity of labor increased because of capital improvements like better equipment, versus some factor inherrant to labor itself (education)? If labor productivity increased because of capital, then the owners of the capital have defensible grounds to pocket the increase rather than passing it along to workers. But even if it is defensible, it is another advantage that accrues to capital, which is inconvenient if you want a more uniform distribution of wealth. I tend to agree with those who commented elsewhere in this thread that compounding interest is another, similar factor which benefits capital over time.

We are in the process of this self leveling now. Anyone not part of the Rentier class or the political elite will eventually be subject to this phenomena. The higher up the skills and education ladder you are the less this will affect you. But it has to affect everyone in some regard. Even it its just because no one can afford to pay your fees anymore or buy the products your company sells. America's consumer based economy needs consumers who can afford to buy things. The crazy lending of the past was an attempt to prolong the party but now the party is over.

The American worker never realized how good he had it before the valve was opened. The foreign worker never realized how BAD he had it.

+1 (although it is clear to me by now that I agree with your analysis of many things)

I have been thinking that my wife and I have about 1 generation in which to take our family from "highly-credentialed, specialized labor" to "junior rentier" before we lose pricing power on our labor. Or, you know, maybe some sort of "reset" happens first. But I could definitely envision losing our grip on the middle-class lifestyle if we don't shift more of our income from labor to capital.

[unlucky]

Re: record inequality

I think its pretty simple. I think at least part of the reason for stagnant wages is the natural leveling you get with increasing globalism. With less barriers these days, any job that can be done by cheaper labor will be done by cheaper labor. Good jobs get replaced by lower paying service jobs. Its a bigger playing field now, and when the average wage is lower throughout the world than in the US, it's only natural US wages will drop to seek out the equilibrium point. In the past countries traded products and raw materials. Now they trade labor as well.

Globalization is a big part of the "conventional" explanation for the phenomenon, and I guess if your perspective is that globalization is (was?) based on the worldwide roll-out of efficient free markets, then it's a plausible one.

But under the hood that perspective doesn't add up, to my mind at least. In actuality globalization has involved the growth of huge trade imbalances founded on unsustainable vendor financing (economic MAD, as EJ puts it). US household consumption continued to grow during the period in spite of increasing pressure on household incomes, and was the primary driver of global demand growth, without which exports from "cheap labour" economies could not have grown at the pace they did. The necessary counterpart to the increasing flow of goods into the US was an increasing flow of debt products from the US to the exporting economies. We now know that this increased flow of debt was not well founded - the "financial innovation" that underpinned it was in fact a gigantic fraud. To my way of thinking, it follows that the mirror image flow of goods into the US was not well-founded either.

What would have happened if the financial ponzi scheme had never existed? US households would not have been able to fund consumption through credit, and as they faced increasing competition from foreign workers their pace of consumption growth would have been limited. This might have meant:

1. US corporations would not have been able to grow thier profits as fast as they did (by selling foreign manufactured goods to credit-financed US households). As a result, wages would have retained a relatively higher proportion of GDP and income inequality might have been substantially lower.

2. Foreign economies could not have grown as fast as they did by relying on exports alone. To achieve the same growth they would have had to grow their domestic consumption at a facer pace, creating more opportunities for US exporters and hence reducing the jobs pressure on US workers.

I'm not an economist and I can't pretend to analyze these questions in any detail. However, I have lost faith in conventional economists who do not seem to understand the role of FIRE in the economy, and who have a rose-tinted view of globalization that ignored or glossed over the massive trade imbalances and unsustainable financing.

My personal context for understanding economic questions has evolved from "competition in efficient free markets explains everything" to "something stinks here... even if I can't quite put my finger on it"

[flintlock]

Re: record inequality

My personal context for understanding economic questions has evolved from "competition in efficient free markets explains everything" to "something stinks here... even if I can't quite put my finger on it"

That's pretty much what has happened to me as well. It's slowly dawning on me that a lot of what I learned in college about economics has not played out the was it was supposed to.

[c1ue]

Re: record inequality

I have been thinking that my wife and I have about 1 generation in which to take our family from "highly-credentialed, specialized labor" to "junior rentier" before we lose pricing power on our labor.

ASH,

There ain't no such thing as a 'junior rentier'.

There's big prey for rentiers, and little prey.

[ASH]

Re: record inequality

ASH,

There ain't no such thing as a 'junior rentier'.

There's big prey for rentiers, and little prey.

Huh. I figure a rentier is one who makes their livelihood from economic rent (income from owning something), as distinct from one who makes their livelihood primarily from their labor for others. By my definition, a "junior rentier" is someone who collects a level of income similar to what I earn today, only from passive sources. I estimate that a net worth of several million dollars would be sufficient (although plenty of people worth millions of dollars still 'work', in many cases the work involved is managing their capital for their own benefit rather than performing a service for someone else). Why "junior"? Because there are also folks who collect much larger sums in passive income.

I don't care what we call it, though. My point is simply that I think I have about one generation to decouple my income from the value of my labor to others. That's not much different from someone who seeks to retire on a nest egg that is large enough they don't have to draw down the principal (even inflation-adjusted). The only caveat is I'm thinking in terms of supporting a family off of passive income, rather than just a retired person.