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>The economic arguments adopted by Britain and the US in the 1980s led to vastly increased inequality – and gave the false impression that this outcome was not only inevitable, but good.

In most rich countries, inequality is rising, and has been rising for some time. Many people believe this is a problem, but, equally, many think there’s not much we can do about it. After all, the argument goes, globalisation and new technology have created an economy in which those with highly valued skills or talents can earn huge rewards. Inequality inevitably rises. Attempting to reduce inequality via redistributive taxation is likely to fail because the global elite can easily hide their money in tax havens. Insofar as increased taxation does hit the rich, it will deter wealth creation, so we all end up poorer.

One strange thing about these arguments, whatever their merits, is how they stand in stark contrast to the economic orthodoxy that existed from roughly 1945 until 1980, which held that rising inequality was not inevitable, and that various government policies could reduce it. What’s more, these policies appear to have been successful. Inequality fell in most countries from the 1940s to the 1970s. The inequality we see today is largely due to changes since 1980.

In both the US and the UK, from 1980 to 2016, the share of total income going to the top 1% has more than doubled. After allowing for inflation, the earnings of the bottom 90% in the US and UK have barely risen at all over the past 25 years. More generally, 50 years ago, a US CEO earned on average about 20 times as much as the typical worker. Today, the CEO earns 354 times as much.

https://www.theguardian.com/inequality/2019/jun/06/socialism-for-the-rich-the-evils-of-bad-economics
>>
Any argument that rising inequality is largely inevitable in our globalised economy faces a crucial objection. Since 1980 some countries have experienced a big increase in inequality (the US and the UK); some have seen a much smaller increase (Canada, Japan, Italy), while inequality has been stable or falling in others (France, Belgium and Hungary). So rising inequality cannot be inevitable. And the extent of inequality within a country cannot be solely determined by long-run global economic forces, because, although most richer countries have been subject to broadly similar forces, the experiences of inequality have differed.

The familiar political explanation for this rising inequality is the huge shift in mainstream economic and political thinking, in favour of free markets, triggered by the elections of Ronald Reagan and Margaret Thatcher. Its fit with the facts is undeniable. Across developed economies, the biggest rise in inequality since 1945 occurred in the US and UK from 1980 onwards.

The power of a grand political transformation seems persuasive. But it cannot be the whole explanation. It is too top-down: it is all about what politicians and other elites do to us. The idea that rising inequality is inevitable begins to look like a convenient myth, one that allows us to avoid thinking about another possibility: that through our electoral choices and decisions in daily life we have supported rising inequality, or at least acquiesced in it. Admittedly, that assumes we know about it. Surveys in the UK and US consistently suggest that we underestimate both the level of current inequality and how much it has recently increased. But ignorance cannot be a complete excuse, because surveys also reveal a change in attitudes: rising inequality has become more acceptable – or at least, less unacceptable – especially if you are not on the wrong end of it.
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>False beliefs on the ease of class mobility have steered US/UK politics since the 80s

Inequality is unlikely to fall much in the future unless our attitudes turn unequivocally against it. Among other things, we will need to accept that how much people earn in the market is often not what they deserve, and that the tax they pay is not taking from what is rightfully theirs.

One crucial reason why we have done so little to reduce inequality in recent years is that we downplay the role of luck in achieving success. Parents teach their children that almost all goals are attainable if you try hard enough. This is a lie, but there is a good excuse for it: unless you try your best, many goals will definitely remain unreachable.

Ignoring the good luck behind my success helps me feel good about myself, and makes it much easier to feel I deserve the rewards associated with success. High earners may truly believe that they deserve their income because they are vividly aware of how hard they have worked and the obstacles they have had to overcome to be successful.

But this is not true everywhere. Support for the idea that you deserve what you get varies from country to country. And in fact, support for such beliefs is stronger in countries where there seems to be stronger evidence that contradicts them. What explains this?

Attitude surveys have consistently shown that, compared to US residents, Europeans are roughly twice as likely to believe that luck is the main determinant of income and that the poor are trapped in poverty. Similarly, people in the US are about twice as likely as Europeans to believe that the poor are lazy and that hard work leads to higher quality of life in the long run.
>>
Yet in fact, the poor (the bottom 20%) work roughly the same total annual hours in the US and Europe. And economic opportunity and intergenerational mobility is more limited in the US than in Europe. The US intergenerational mobility statistics bear a striking resemblance to those for height: US children born to poor parents are as likely to be poor as those born to tall parents are likely to be tall. And research has repeatedly shown that many people in the US don’t know this: perceptions of social mobility are consistently over-optimistic.

European countries have, on average, more redistributive tax systems and more welfare benefits for the poor than the US, and therefore less inequality, after taxes and benefits. Many people see this outcome as a reflection of the different values that shape US and European societies. But cause-and-effect may run the other way: you-deserve-what-you-get beliefs are strengthened by inequality.

Psychologists have shown that people have motivated beliefs: beliefs that they have chosen to hold because those beliefs meet a psychological need. Now, being poor in the US is extremely tough, given the meagre welfare benefits and high levels of post-tax inequality. So Americans have a greater need than Europeans to believe that you deserve what you get and you get what you deserve. These beliefs play a powerful role in motivating yourself and your children to work as hard as possible to avoid poverty. And these beliefs can help alleviate the guilt involved in ignoring a homeless person begging on your street.
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This is not just a US issue. Britain is an outlier within Europe, with relatively high inequality and low economic and social mobility. Its recent history fits the cause-and-effect relationship here. Following the election of Margaret Thatcher in 1979, inequality rose significantly. After inequality rose, British attitudes changed. More people became convinced that generous welfare benefits make poor people lazy and that high salaries are essential to motivate talented people. However, intergenerational mobility fell: your income in Britain today is closely correlated with your parents’ income.

If the American Dream and other narratives about everyone having a chance to be rich were true, we would expect the opposite relationship: high inequality (is fair because of) high intergenerational mobility. Instead, we see a very different narrative: people cope with high inequality by convincing themselves it is fair after all. We adopt narratives to justify inequality because society is highly unequal, not the other way round. So inequality may be self-perpetuating in a surprising way. Rather than resist and revolt, we just cope with it. Less Communist Manifesto, more self-help manual.

nequality begets further inequality. As the top 1% grow richer, they have more incentive and more ability to enrich themselves further. They exert more and more influence on politics, from election-campaign funding to lobbying over particular rules and regulations. The result is a stream of policies that help them but are inefficient and wasteful. Leftwing critics have called it “socialism for the rich”. Even the billionaire investor Warren Buffett seems to agree: “There’s been class warfare going on for the last 20 years and my class has won,” he once said..
>>
>Dick Cheney Incomin

This process has been most devastating when it comes to tax. High earners have most to gain from income tax cuts, and more spare cash to lobby politicians for these cuts. Once tax cuts are secured, high earners have an even stronger incentive to seek pay rises, because they keep a greater proportion of after-tax pay. And so on.

Although there have been cuts in the top rate of income tax across almost all developed economies since 1979, it was the UK and the US that were first, and that went furthest. In 1979, Thatcher cut the UK’s top rate from 83% to 60%, with a further reduction to 40% in 1988. Reagan cut the top US rate from 70% in 1981 to 28% in 1986. Although top rates today are slightly higher – 37% in the US and 45% in the UK – the numbers are worth mentioning because they are strikingly lower than in the post-second-world-war period, when top tax rates averaged 75% in the US and were even higher in the UK.

Some elements of the Reagan-Thatcher revolution in economic policy, such as Milton Friedman’s monetarist macroeconomics, have subsequently been abandoned. But the key policy idea to come out of microeconomics has become so widely accepted today that it has acquired the status of common sense: that tax discourages economic activity and, in particular, income tax discourages work.

This doctrine seemingly transformed public debate about taxation from an endless argument over who gets what, to the promise of a bright and prosperous future for all. The “for all” bit was crucial: no more winners and losers. Just winners. And the basic ideas were simple enough to fit on the back of a napkin.

One evening in December 1974, a group of ambitious young conservatives met for dinner at the Two Continents restaurant in Washington DC. The group included the Chicago University economist Arthur Laffer, Donald Rumsfeld (then chief of staff to President Gerald Ford), and Dick Cheney (then Rumsfeld’s deputy, and a former Yale classmate of Laffer’s).
>>
You have to read this book:
https://press.princeton.edu/titles/10921.html
Not green texted for ease of read...
How only violence and catastrophes have consistently reduced inequality throughout world history

Are mass violence and catastrophes the only forces that can seriously decrease economic inequality? To judge by thousands of years of history, the answer is yes. Tracing the global history of inequality from the Stone Age to today, Walter Scheidel shows that inequality never dies peacefully. Inequality declines when carnage and disaster strike and increases when peace and stability return. The Great Leveler is the first book to chart the crucial role of violent shocks in reducing inequality over the full sweep of human history around the world.

Ever since humans began to farm, herd livestock, and pass on their assets to future generations, economic inequality has been a defining feature of civilization. Over thousands of years, only violent events have significantly lessened inequality. The "Four Horsemen" of leveling—mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues—have repeatedly destroyed the fortunes of the rich. Scheidel identifies and examines these processes, from the crises of the earliest civilizations to the cataclysmic world wars and communist revolutions of the twentieth century. Today, the violence that reduced inequality in the past seems to have diminished, and that is a good thing. But it casts serious doubt on the prospects for a more equal future.

An essential contribution to the debate about inequality, The Great Leveler provides important new insights about why inequality is so persistent—and why it is unlikely to decline anytime soon.

Walter Scheidel is the Dickason Professor in the Humanities, Professor of Classics and History, and a Kennedy-Grossman Fellow in. he has published widely on premodern social and economic history, demography, and comparative history.
>>
>Above post not included in article, but worth checking out.

While discussing Ford’s recent tax increases, Laffer pointed out that, like a 0% income tax rate, a 100% rate would raise no revenue because no one would bother working. Logically, there must be some tax rate between these two extremes that would maximise tax revenue. Although Laffer does not remember doing so, he apparently grabbed a napkin and drew a curve on it, representing the relationship between tax rates and revenues. The Laffer curve was born and, with it, the idea of trickle-down economics.

The key implication that impressed Rumsfeld and Cheney was that, just as tax rates lower than 100% must raise more revenue, cuts in income tax rates more generally could raise revenue. In other words, there could be winners, and no losers, from tax cuts. But could does not mean will. No empirical evidence was produced in support of the mere logical possibility that tax cuts could raise revenue, and even the economists employed by the incoming Reagan administration six years later struggled to find any evidence in support of the idea.

Yet it proved irresistible to Reagan, the perennial optimist, who essentially overruled his expert advisers, convinced that the “entrepreneurial spirit unleashed by the new tax cuts would surely bring in more revenue than his experts imagined”, as the historian Daniel T Rodgers put it. (If this potent brew of populist optimism and impatience with economic experts seems familiar today, that might be explained in part by the fact that Laffer was also a campaign adviser to Donald Trump.)

For income tax cuts to raise tax revenue, the prospect of higher after-tax pay must motivate people to work more. The resulting increase in GDP and income may be enough to generate higher tax revenues, even though the tax rate itself has fallen.
>>
Although the effects of the big Reagan tax cuts are still disputed (mainly because of disagreement over how the US economy would have performed without the cuts), even those sympathetic to trickle-down economics conceded that the cuts had negligible impact on GDP – and certainly not enough to outweigh the negative effect of the cuts on tax revenues.

But the Laffer curve did remind economists that a revenue-maximising top tax rate somewhere between 0% and 100% must exist. Finding the magic number is another matter: the search continues today. It is worth a brief dig into this research, not least because it is regularly used to veto attempts to reduce inequality by raising tax on the rich. In 2013, for example, the UK chancellor of the exchequer George Osborne reduced the top rate of income tax from 50% to 45%, arguing Laffer-style that the tax cut would lead to little, if any, loss of revenue. Osborne’s argument relied on economic analysis suggesting that the revenue-maximising top tax rate for the UK is about 40%.

Yet the assumptions behind this number are shaky. Let’s begin with the underlying idea: if lower tax rates raise your after-tax pay, you are motivated to work more. It seems plausible enough but, in practice, the effects are likely to be minimal. If income tax falls, many of us cannot work more, even if we wanted to. There is little opportunity to get paid overtime, or otherwise increase our paid working hours, and working harder during current working hours does not lead to higher pay. Even for those who have these opportunities, it is far from clear that they will work more or harder. They may even decide to work less: since after-tax pay has risen, they can choose to work fewer hours and still maintain their previous income level. So the pop presumption that income tax cuts must lead to more work and productive econ activity turns out to have little basis in either common sense or economic theory.
>>
Okay, For your own sake I won't post more of the article. Its still a bit longer. From today. Read the source in my opinion.
>>
What's the /news/ policy on communist propaganda?
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>>408604
t.didn't read the article
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>>408608
Read and rejected.
>>
>>408521
>>408608
How old are you, 50? 60?
>>
Get a job, commie
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>the guardian

Learn to code faggots
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>>408639
Get a job, hillbilly.
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>>408614
I know you didn’t read the article. It’s not about supporting socialism t.intellectually stunted boomer. You just read the word socialism in the title and your one floating brain cell for forming new thoughts immediately clumped into your concentrated and extremely limited network of retarded boomer talking points.
>>
>>408509
Elizabeth Warren is a make-pretend Indian.
>>
>>408947
*then everyone clapped*
>>
>>408833
>I know
>It’s not about
>You just
>your one floating brain cell
>your concentrated and extremely limited network of retarded boomer talking points
"The problem with our liberal friends is not that they're ignorant, it's that they know so much that isn't so."
>>
>>408961
>>408520
>>408510
>>408509
>bernie warren
>cites the fucking guardian
wow its not like you have a bias or anything
not even going to bother to read
>>
>>408509
>More generally, 50 years ago, a US CEO earned on average about 20 times as much as the typical worker. Today, the CEO earns 354 times as much.
*Bootlicker posts intensified*
>>
>>409029
*INTENSIFIED*
>>
>>409036
>*INTENSIFIED*
never mind the overwhelmingly liberal leanings of the majority of ceos, or obamas blatant pandering to them.
just keep on republiposting you worthless subhuman
>>
Bump because this is the truth that Republican policies are destroying America
>>
>>408509
LEFT-CENTER BIAS
These media sources have a slight to moderate liberal bias. They often publish factual information that utilizes loaded words (wording that attempts to influence an audience by using appeal to emotion or stereotypes) to favor liberal causes. These sources are generally trustworthy for information, but may require further investigation. See all Left-Center sources.

Overall, we rate The Guardian Left-Center biased based on story selection that moderately favors the left and High for factual reporting due to proper sourcing and a clean fact check record.
Detailed Report
Factual Reporting: HIGH
Country: United Kingdom
World Press Freedom Rank: UK 40/180
>>
>>410367
https://mediabiasfactcheck.com/the-guardian/
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>>410367
Better ignore all the facts laid out in the article then. Must all be lies. No way it's simply describing objective facts in a left-leaning light such that an intelligent critical reader could take the facts presented and make a reasonable argument the other way.
>>
What's wrong with inequality?
>>
It's impossible to read theguardian.com on income inequality with a straight face, really

>>408521
>>
>>410446
nothing in principle but when it gets too bad crime gets worse and the plebs riot and shit.
>>
>>410451
>what's wrong with inequality?
>nothing in principle
sure
>>
>>410446
It's an exhausted epithet that doesn't communicate successfully anymore, is one possible answer, senpai lad m8.
>>
I just saw the Chernobyl movie on HBO. This was the same USSR Bernie spent his honeymoon in. The same USSR that Bernie touts has being great. What a god damned fool.
>>
>>410453
You shouldn't assume something's bad just like that.
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>>410462
>>410446
The point of the article was that inequality is too high currently, not that inequality is always bad. I think it's correct.
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>>410463
But why is it too high? Why not too low? What's the criteria?
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>>410464
*republicans appear in alley with ignorant arguments with complete disregard for US history*

*sigh* here we go again
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>>410446
Nothing, really. It's just that people are becoming irate because they can't afford what they want. Envy and greed is pervasive in the lower social strata. Shit gets wacky when they try to implement a system of economics that results in mass starvation though.
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>>410465
When you have an article about inequality and "the evils of bad economics" the least that can be expected is to explain why it's bad, which is nowhere to be found.
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>>410470
Real wages in comparison to CPI are raw numbers you can look up yourself, but I’ll tell you that A) real wages have gone up exactly zero percent for the middle class since 1970, B)real GDP has gone up exponentially since 1970, C)CPI has gone up greatly in comparison to real wages. But why care, you ask?

Why bother fighting exploitation of middle class workers? Because that’s what men do. If we don’t fight for ourselves, our politicians surely won’t. We’ve been fighting neocons since Reagan for a thankless pile of shit class who does nothing but vote in neocons to make it substantially worse.
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>>410474
I love how Republicans simultaneously fuck over the white middle class and claim that they're the only ones who care about it. We're in an abusive relationship with an entire half of our political system, and nobody's any wiser to it. It's fascinating.
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>>410474
Liberal arts students and college commies are not men.
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>>410464
The article discusses numerous measures of inequality and makes comparisons over time, so that'd be a good place to start.

There are all kinds of criteria one could apply. I'd go with intergenerational social mobility first. I'm sure you'd agree that, say, feudalism is an example of inequality being too high. While we're certainly not at that level, we're trending in that direction and being able to precisely articulate and quantify the ways in which that is the case isn't necessary if you take the statistics in the article as true. At the end of the day the allowable level of inequality is a political/social value judgment, but I like to think of it like this: If you could design a society with any level of inequality and social mobility, from "one god-emperor and everyone else is slaves" to "everyone-in-an-identical-concrete-cube perfect equality," and then had to be born to random parents that society, what kind of society would you choose? Would it be identical to the US in 2019?

I'm guessing you'll respond with a "liberals just act based on feelings and not logic and reason!" type argument, so I'll try to address that one now by simply saying that a utilitarian worldview can be rational and a debate about whether or not it is rational is philosophy and really far afield from talking about wealth inequality.
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>>410474
You haven't said anything about inequality.
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>>410479
I want a society where everyone has realised its full potential, the closest we are to that objective the better.
The level of inequality that represents is of no concern to me because I don't think inequality is inherently bad. I haven't been given any reason to think otherwise.
If the level of inequality is over or below that which would be if everyone has realised its full potential then something would be wrong, not because its unequal but because then it's certain that there's someone who hasn't realised its full potential.
The same applies for feudalism. The problem of feudalism never was inequality being too high.
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>>410485
I thought I unsubbed from Jordan Peterson
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>>410489
If you're looking for people to lick your ass or blindly accept your assumptions reddit is just around the corner.
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>>410485
>If the level of inequality is over or below that which would be if everyone has realised its full potential then something would be wrong,

In that case something has clearly gone wrong, unless you want to argue that everyone in the US is fully realizing their potential. Also if you think material circumstances don't affect people's potential I don't know what to say because it's pretty obvious that potential is a function of wealth. You seem to think of "potential" as some kind of god-given attribute that is reflected in, but not affected by, both absolute and relative wealth and that's simply incorrect.
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>>410512
Not everyone in the US if fully realising their potential, of course. That doesn't mean that the level of inequality if that were the case would be lower, higher or the same.
Fully realising one's potential is maximising his performance. Doing the best one is able in other words.
What we want is the position of A (and B, C, etc) to be the highest possible. The (highest possible) position of A is not affected by the distance between A and B. The reason for this is because both can do the best they are able without impeding the other to do the same.
The relative distance between A and B is what we call inequality and tells us nothing about the actual positions of those points.
What we want to do is achieving a distribution that is as closely to the hypothetical highest A-B-C as possible.
How do we do that? Obtaining the actual A-B-C that minimises the integral from actual A-B-C to hypothetical A-B-C.
So we have to shift the A-B-C we have in t=1 to that new A-B-C we have determined in t=2. This doesn't tell us of there has been an increase or decrease in relative distance when moving form t=1 to t=2.
That's why, even considering that some things you say are correct which they are, it doesn't tell us anything about inequality.
Consider for example the case of those who aren't able to study because they don't have money, which I think might be what you were aiming at. You could say, if they could study they would be closer to achieve their full potential and if we take money from rich people to pay their studies we would be reducing inequality. I believe this is shortsighted. At the end of the day the thing you know is that you would be closer to the objective but there's no theoretical necessity that makes it so the shift would be reducing inequality. Perhaps you're educating some geniuses and some idiots and you end up with higher inequality than you had before.
I can make you a graph if you wish.
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>>410522
brother of Kim Jong-un was killed by CIA on direct order of Hilary Clinton.

https://www.n-tv.de/politik/Kim-Jong-Nam-arbeitete-wohl-fuer-die-CIA-article21078396.html
>>
>>410500
autism.
>>
>>409038
The Koch brothers say hello. So does the entire petroleum and defence industry. A conservative mindset is mandatory in those fields.
>>
>>410367
>Factual reporting: HIGH
So what exactly is the issue here? Why don't you post the assessment for Fox and see how well it does in the facts department?
>>
>>410546
Right back atcha buddy
>>
>>410366
We were kind of right behind them on that one.
>>
Not far from where I live is a plaque to a great great grandfather of socialism. He was not poor. It is a gated community almost totally private and they are massive houses. It's just that he owned a factory really. Socialism! That's it. He ran a factory , housed them in poverty and berated them for drinking. Socialism!
>>
The ultrawealthy have long past abandoned ideologies of high/low taxes ir big government vs small government. They let the rest of us tear ourselves apart over the question because they are foremost pragmatists and realize how tenuous their power is. Generally they aren't openly hostile to the well being of the working class, probably because they feel some responsibility and because of their legacy and because they don't want people to notice the growing power imbalance since wealth is easily taken. But any policy they promote, whatever else it does, must reinforce the status quo and further entrech their wealth. This is why Brazilian Lula da Silva who promoted some fairly weak redistribution of wealth from Brazil's elites is now rotting in Brazilian solitary confinement while Bolsonaro is in power.
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>>410583
>must reinforce the status quo and further entrech their wealth
It's similar here, money has to go to people that have money and if it doesn't then its distractions are going to be snuffed out.
>good economic policy, trashed in the name of the poor who weren't educated on the propaganda against it.
Eventually it's that the political parties have factions across them that , well you already know all this.
>>
>>410366
Though to be kind President Trump did see off the threat from China /North Korea and Russia. That inside America [all the rest of it] it was a stand down on America's part. What with President Obama's aftermath.

Enter the 2020s Woo Hoo.!
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>>410522

>At the end of the day the thing you know is that you would be closer to the objective but there's no theoretical necessity that makes it so the shift would be reducing inequality.

Yes, the model you proposed however:

>both can do the best they are able without impeding the other to do the same.

I don't think this underlying assumption is a safe or practical one to make, though it's necessary for the neat model you laid out.
>>
The amount of people in this thread applauding and unapologetically defending the economic system that is steadily catapulting them and their ancestors into a permanent underclass is astounding.
>>
Id entertain some of the positions held by the right in this thread, but not one of the republicans ITT read the article. I can tell because they didn’t address any of the finer points in the article.

Conservatives are so goddamn stupid i basically come here just to watch it like watching a group of toddlers huddled around learning the formation of language and socialization. It’s similar to that.

Keep giving me the epic entertainment. My goal isn’t to win you over - you’re lost, pathetic, and deserve a bullet.
>>
>>410709
>I don't think this underlying assumption is a safe or practical one to make
I assumed it because is what I use in my daily life. If A is doing his best B should be able to do it too, there is nothing contradictory on that. This doesn't negate material constraints which may affect the output.
Correct me if I'm wrong.
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>>410716
remember when you were earnestly trying to tell people that they could become wonderful people like you if they only uncritically believed all the retarded shit you tell them

it was like last week or something
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>>410822
Some traps set themselves
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>>408509
>theguardian.com

Too left, to have a valid opinion mate.
>>
>>411009
Ok. Nice downvote.
>>
>>411097
Imagine being so buttblistered that you impersonate a tripfag, thereby becoming a tripfag yourself.
Human race is fucking doomed.
>>
>>411102
Your using the term incorrectly new friend
There are no tripfags in this thread
>>
>>411102
I'm just a standard namefag. Your point still stands kek.
>>
I am a huge faggot, please rape my face.
>>
>>411161
I like your name bro.
>>
>>410446
Yeah why not just have one person who owns everything
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>>411386
The issue with this is not inequality but that everyone except one own nothing.
Imagine if there are three persons A, B and C. A and B own 0 each and C owns 3. Absolute inequality between A and C would be 3 and relative maximum, same with B.
Now imagine A has 1, B has 1 and C has 500,000,000. Absolute inequality between A and C would be 499,999,999 and relative inequality virtually maximum.
I think we can both agree the second scenario of greater inequality is much better, because we care about the positions of A, B and C with respect to their hypothetical ones, not the distance between them.
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>>411408
Different here
>the issue is not inequality
Yes it is.
When there are 500,000,002 cows, why the should C own practically all the cows. What makes him so special? A and B herd them and do most of the work. C just manages the herding. He does a job too but its not worth 499 999 cows more even if he owns the cows. He takes the fruit of other people doing the jobs.

And like with other analogies, it's very stupid. You really can't compare unrelated things. Cows=/=money. Money means more power. That means problems even for democracy, justices system etc. Cows don't. You can't buy votes with cows. Unless the cows ARE the money. Then C can threaten to take even the last two cows away buy paying D, E, F, G, H and making them steal the the 2 cows. UNLESS A and B does EVERY fucking thing C wants.

This is the fucking problem with analogies. You are trying to eversimplify things with some other thing but it actually makes them more confusing. Different things are different and work in a different way. Cows=/=money.
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>>411438
I'm not arguing for what C, A or B should own. Nor I have specified where it comes from.
What I am arguing for is that inequality is not bad per se.

If that which they own is illegitimately obtained is a different question to that of inequality.

Also notice it's not an analogy, it's a theoretical model in which all our population is composed by A, B and C.
In this model whatever it is we are measuring would work the same way (maybe I should be more precise here). It could be money, it could be cows or it could be how fast they run, etc.

It's not really related but the point you're making about democracy is not about inequality either. Assuming everything you say it's right, C would be able to do so regardless of the inequality between the amount owned by A, B and itself wouldn't he? Unless A and B owned more which would enable them to pay more for the same service; the problem would still persist.
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>>410564
I'm just letting people know about exactly that
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>>410820
>I assumed it because is what I use in my daily life.

That's fine. I just wanted to point out that there's a fundamental assumption one has to believe for your model to work, assuming the goal is maximizing utility.

>>411408
>>411455
The second scenario is preferable to the first, but is optimal only if A and B getting 1 was only made possible by the C getting 500k. Cows have diminishing marginal utility.
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>>411472
I don't understand what you're saying.
A third scenario in which A and B get 1 and C keeps the 3 it had would be better than the first but worse than the second.
They would rank 1>3>2>X>Y
X being the scenario in which, given material constraints an A-B-C is selected from all the possible options with the lesser area between itself and the hypothetical which would be the scenario Y.
X would be the optimal.

If there was a fourth scenario in which A, B and C each one got (500k+2)/3 cows it would be better to the second scenario, and this would be a scenario of greater equality.
If that's what you're saying, I agree with you on that. But this is only the case because the thing we are concerned with are not the cows but rather the utility we get from them, be it the amount of milk or happiness they get for having more cows.
Now imagine we apply the model to those things: The pervious choice is clear without having to add equality into the mix.

I think there may be a problem in the case that two different options are given the same rank. The hypothetical A-B-C is 3-3-3. In world 1 we have 1-2-3 and in world 2 we have 2-2-2.
Both would rank the same according to our hypothetical-actual criteria. But if we had to choose what second order criteria would we pick?
I don't think this is very common in real life but is interesting to examine nonetheless. I believe there is a case to be made for equality on this one, but also for the opposite. You could also argue that the better world is that in which everyone has a minimum but that again only pushes the equality decision to third order.
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>>411472
>>411505
I think I made the same mistake I was pointing out.
You usually wouldn't need to make use of those second and third order criteria because the assumption that each particular case does not affect the outcome, hypothetical or not, of the others.
But even in case you do you still wouldn't use equality as a value.
Imagine you have a race. First you want everybody to run as fast as possible (there would be only one option because someone running slower won't make another run faster but let's continue), then you'd prefer everyone to run at least at a minimum velocity, then you'd prefer the race to be competitive (This would imply equality but keep in mind: You want it to be competitive because it's more fun that way. Equality in this case is the slave of enjoyment, it is contingently so not necessarily.) - the most fun possible.
I am struggling to find any inherent value in equality.
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>>411455
Inequality makes markets work and it is needed for growth and progress. But too much inequality hampers growth and progress too. No one is calling for thier to be no inequality, just flattening that crazy curve some.

Productivity is 250+% of 1970 levels per hour worked.
Real wages are at 117% of 1970 levels per hour worked.
Clearly something has gotten out of whack. We are in a new gilded age and the wood behind the gold leaf has dry rot to the core
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>>411675
>Inequality makes markets work and it is needed for growth and progress. But too much inequality hampers growth and progress too.
Can you back any of those claims? From my point of view the level of inequality shouldn't affect growth, other things do.
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>>411685
not him. Centralized power makes things stagnate. Cant compete when few companies dont let others have things. Workers have no work to do. Less choice.
Maybe these sentences help you get started.
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>>411685
If you make widgets or sell yak milking services and only 1% of the population can afford your product your customer base is smaller. Hence lower competition to open yak milking facilities. Moreover if all capital investment is held by the 1% it limits the opportunity for new entry to markets for the lower classes who don't need yak milking and instead need chicken wranglers. Even if you do start your chicken wrangling business one of two things will happen when you get successful either the yak milking company buys you and starts selling chicken wrangling by yak milkers or they start thier own cat wrangling service and use government lobbying and the courts to push you out of buisness.
High wealth inequality can only exist in a market economy with support from the existing power structures, it is antidemocratic and anti free market
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>>411685
https://www.oecd.org/social/Focus-Inequality-and-Growth-2014.pdf
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>>411725
Thank you for this. The issue I see with this is that is not inequality the one that is to blame and I think the OECD agrees with me on that. There has been a correlation between rising inequality and lower growth in OECD countries. But correlation is not causation. They make emphasis on the access to education of children of those in the lowest 40%, which is not an issue of inequality. As I have pointed out before if you make it so those people can develop their potential you'd be obtaining a better result overall but while in the short term this might cause inequality to decline in the long term you could have an increase which you wouldn't have otherwise.
They are also comparing rises in inequality with withing the same countries and the change of growth rate in them. If they were to check among all the countries the level of inequality by country with its growth rate I think - I haven't made the calculations - that the correlation would dissapear or at least not be that strong.
That is because you have countries which are more ethnically rich which tend to have greater levels of inequality and at the same time high growth rates: the US, Singapore.
And others with low inequality and low growth rates: Mexico, France, Italy.
Check also Sweden where a huge increase in inequality didn't generate lower growth rates. Their increase in inequality didn't hinder human capital accumulation because education opprtunites, social mobility and skill development weren't affected.
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>>411689
>>411689
>Centralized power makes things stagnate
This one deserves further consideration. I will think about it.
>companies dont let others have things
Not inequality.
>Workers have no work to do
No idea where that comes from.
>Less choice.
You mean everything is more equal?

>>411697
>only 1% of the population can afford your product
This is not an issue about inequality between the customers but rather the distance between them and the price of your product. A more unequal customer base could have a 'more equal' access to your product, that means more of them can buy it and the more money you get.

Both of you are right in some aspects and it's clear that my model is not good enough as it is. I feel if I were to continue with it I would be forcing it.
I will reconsider if I can adjust it or add complexity or if I have to discard it altogether.
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>>411632
If instead you assume that A's outcome in part determines B's outcome, such that there is nothing B can do to reduce the affect of A's outcome on his own, and that outcome is a determinant of utility, it can make sense to artificially adjust outcomes if the result increases overall utility. The big caveat is that outcome is not the only determinant of utility and artificial adjustments could make things worse if the other determinants are too negatively affected.
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>>411822
>companies dont let others have things
>Not inequality.
It's exactly inequality. When companies don't give workers more money for their raised productivity and work, but give more to the owners, it's inequality. You know like workers don't get more money and owners get more money, that raises inequality.

>Less choice.
>You mean everything is more equal?
No. That's not what it means. If workers have less choice, owners get to dictate everything, which means inequality.

You must be a troll. Nobody's this fucking stupid.
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>>413077
>nobodies this stupid.

Finally you’ve reached the same conclusion
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>>413024
If A can determine B's outcome then B should be able to determine A's.
Anyway, we already assumed they cannot affect each other's outcome: A's doing his best cannot stop B doing so.

The thing is we have a set of hypothetical outcomes when each one is doing his best without any other influence.
The actual outcomes however must be lower than this because even if they're doing their best they are facing some constraints (limited but transferable, inherent are already taken into account) we have to adjust for.
This combined with the application of decreasing marginal results which is applied independently to A, B and C.
So if you wanted to maximise output you should take those material factors and start allocating them were the marginal productivity is higher.
This would have the same effect as minimising the area procedure.

>>413077
Would you care if companies did give more money to their workers but gave much more to the owners?
Or said differently: Would you prefer if both workers and owners didn't get more?

I thought you were making a more complex point about the impact of inequality say between A, B and C on X, Y and Z and vice versa being those competing populations where their outcomes could affect one another and small increase in one's output could be associated with a greater decrease in overall output - e.g. a monopolistic or oligopolistic situation.

Less choice for A, B and C as a population in the precious scenario would be result of 1. lower inequality between A, B and C; 2. higher inequality between X, Y and Z; 3. higher output of A, B and C relative to that of X, Y and Z.
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>>414042
Incredibly fake Econ lessons ITT



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