What's wrong with unequal wealth distribution? (Was: 2013-12-10 Bitcoin Proves..

[westkybitcoins]

It suggests that if everyone was dirt poor, but equally so, then that situation is preferable to some being dirt-poor and some being "filthy rich."

I never spoked about equal distribution, but showing that equal distribution would eliminate all poors should make clear that a more equal distribution would eliminate povertry also:

let's asume that:
 poor=$1
the most rich man (1 person, on top) gains 10x the income as the poor (which are 10 people)

left side: 10 poor people out of 55
right side (would be socialism; once again: I'm not defending socialism): 55 happy people gaining 3.6x above povertry








now imagine the real piramid where the top gain 1000-100.000 times the value of the poor;
and than imagine if there was a rule that rich only can gain 20 times as much as the poor. should be clear now that noone would be poor anymore

I understand what you're saying.

But are we discussing distribution of wealth, or eliminating poverty? Because it sounds like you're saying the problem with unequal distributions of wealth is that "it causes poverty." (Or perhaps more accurately, that "eliminating unequal distributions of wealth can eliminate poverty.")

If the idea is that poverty can be eliminated by distributing wealth more equally, that's simply not true. True, for the moments that everyone has their state-mandated paycheck (or bill) in hand, there is equal distribution. Yes, there are societies where wealth is more equally distributed, and in many (not by any means all) of those societies there is very little poverty.

But as I pointed out, that does not mean that it was a forced (or even voluntary) redistribution of the wealth that is the cause of the lack of poverty. Rather, wealth inequality develops over time as the natural result of numerous benign and unavoidable causes--although it can also be increased by malicious forces, which shouldn't be tolerated. If a society happens to have both low poverty and more-equal wealth distributions, then those could simply have a common cause, or even be unrelated, depending on the situation.

Here's the point that I was getting at: if the poorest people in a society have adequate wealth to take care of the basics, then why does it matter if there are a few billionaires or even trillionaires around, provided they aren't causing the poorer folk to remain poorer?

If you only advocate a more equal distribution of wealth as a solution to poverty, then the issue that's really at hand is poverty, right? And if that can be fixed without worrying about wealth redistribution, then there's no need to be concerned with unequal distribution... or is there some other issue besides poverty that unequal distribution causes concern over?

[Hawker]

It depends on what we mean by poverty. 

Is poverty being unable to meet basic needs such as housing and food?

Or is poverty being much less well off financially that the others in your society?

Your view on what is wrong with unequal wealth distribution will change depending on which definition you go for.

I tend to the view that poverty is being unable to meet basic needs such as housing and food.  Unequal wealth distribution tends to involve inefficient allocation of capital so if there are many people of good character that are having problems making ends meet that would be an issue.

[westkybitcoins]

Basically, the Bitcoin technology does not address the issue of unequal distribution of wealth. Or does it? If not, what can be done about that?

Wealth will not be equally distributed until intelligence is equally distributed; which unless we start creating generically modified babies that are all equal, will be never.

+1

I find it interesting that in all the forum talk, blog posts, etc. I see about people worried about unequal wealth distribution, no one ever, even once, actually clearly states what the fundamental problem with it is (never mind addressing whether the wealth distribution was the cause or result.)

you must be from north europe to ask that.
I invite you to come here to Brazil where I make you understand very quick

Would you be okay with just stating it in a sentence or two?

you wouldn't understand it as you have suggestions implanted which wouldn't accept my explanations. rarely people in a privilaged situation understand how it is not to be

Privilege is relative.

I ask the question because the idea that wealth-distribution is the problem suggests an absurdity. It suggests that if everyone was dirt poor, but equally so, then that situation is preferable to some being dirt-poor and some being "filthy rich."

Do you believe that to be true? If not, then it's just the overall level of wealth (and the lack of freedom to attain it,) not it's distribution, that's the real problem, yes?

Just saying that extremely unequal wealth distribution is a bad thing, doesn't mean that all wealth has to be distributed equally. I know there is considerable debate on whether or not societies that are more equal are better off over all and in general more harmonious. But brushing that debate off entirely and simply stating it is something we can completely ignore and is always without consequence is at best arrogant.

Then why is that? What is the fundamental problem with significantly unequal wealth distributions? (You'll have to forgive me for replacing your adjective 'extremely' with 'significantly', since the former is pretty arbitrary and the societies with the greatest wealth disparities will always be considered 'extreme' regardless of whether they are or not, depending on how one hashes the numbers.)

The train of thought that when living a protected life of privilege one says that all the masses living in ghetto have only themselves to blame for their misery needs to be substantiated before I'll buy the argument.

I certainly hope few here believe that. It doesn't take much honest looking to recognize that most societies seem to have plenty of means by which people can become impoverished through no direct fault of their own.

In fact there is plenty of evidence showing that there is little class mobility, at least in industrialized nations. That doesn't mean that all poor people are stupid and all rich people are smart, it means that society is NOT meritocratic. Of course the more meritocratic a society is, the easier it would be to accept more glaring inequalities. But then one has to determine what merits will be judged.

I agree, and I'm all for focusing on the lack of meritocracy in societies.

What I'm saying is not that equality is necessarily the most important thing of all, but it is not an issue one should brush off as inconsequential without a reasoned and thorough argument.

I understand, but what I'm saying is that I've concluded that it IS inconsequential, at least enough that it doesn't warrant any serious focus. And it's pretty difficult to reconsider that position when the fundamental problem with wealth inequality--what it causes, or what it requires--is never brought up, and the situation is just treated as an inherently bad one on its own merits, apart from any other considerations.

[westkybitcoins]

I tend to the view that poverty is being unable to meet basic needs such as housing and food.  Unequal wealth distribution tends to involve inefficient allocation of capital so if there are many people of good character that are having problems making ends meet that would be an issue.

YES!

And in this case, significant wealth inequality would simply be an indicator, a signal that something is wrong in the society.

It's not a root problem in and of itself that needs to be corrected. If the *real* root problems are fixed, the inequality will likewise be corrected. To try to suppress the symptom instead of curing the disease seems a waste of effort to me, and a distraction from the real issues.

[cryptasm]

Here's the point that I was getting at: if the poorest people in a society have adequate wealth to take care of the basics, then why does it matter if there are a few billionaires or even trillionaires around, provided they aren't causing the poorer folk to remain poorer?

But that's the problem, most people on this planet do not have enough wealth to cover even basic living standards. The fact that billionaires even exist is a pretty f*cked up example of what's wrong with the world. The only way they could have accumulated so much wealth is by ripping off less fortunate people down the social pecking order.

[Mike Christ]

Here's the point that I was getting at: if the poorest people in a society have adequate wealth to take care of the basics, then why does it matter if there are a few billionaires or even trillionaires around, provided they aren't causing the poorer folk to remain poorer?

The rich are rich because they're profiting from the poor; this can only happen in hierarchical relationships.  The current system is in the shape of a pyramid: the bottom ranks make the most, but they're also the biggest rank, and so divided, they each make far less than the members of the topmost rank, who make the least, but divide that wealth between very few people.  A huge amount of energy is being input by the bottom ranks, while the least amount of energy is being input by the topmost rank; the discrepancy is in why, despite each individual worker providing equal amounts of time and labor, some are paid very little, while others are paid a lot.

Socialism seeks to squash this divide; in the hierarchical system, you have a small group of owners who have the wealth to employ workers who generate more wealth for them; no business owner will ever hire a worker he cannot profit from.  In the non-hierarchical system, each worker holds a stake in the company, and though they perform different jobs of varying intensity, they each get a fair cut in profits generated; if the company does well, they all become richer; if the company does poor, they all become poorer.  This doesn't change the fact that company A can do far better than company B, but it certainly fails to centralize the world's wealth into a very small group of hands: it's not "Bill and Joe profits from Jason's and Lucy's labor", it's "Bill and Jason profit together, and Joe and Lucy compete with Bill and Jason."

I don't see anything wrong with voluntary poverty, don't get me wrong; if a person wants to be impoverished, that's his own business--perhaps he is a writer, or an otaku.  My concern is for the people who work 8+ hour shifts every day and still have to look for more jobs to support themselves and their family, meanwhile those at the top of the system have more wealth than they know what to do with (usually involving empires and lobbying and such.)  I don't find this agreeable; people who input a great amount of work should get a corresponding amount of profit.

[capoeira]

Here's the point that I was getting at: if the poorest people in a society have adequate wealth to take care of the basics, then why does it matter if there are a few billionaires or even trillionaires around, provided they aren't causing the poorer folk to remain poorer?

But that's the problem, most people on this planet do not have enough wealth to cover even basic living standards. The fact that billionaires even exist is a pretty f*cked up example of what's wrong with the world. The only way they could have accumulated so much wealth is by ripping off less fortunate people down the social pecking order.

thanks, I don't need to answer topic after this at all.


one question I have though: why are middle class "capitalists" always defending the right of millionairs and billionairs? are you realy all thinking you will be one of them (that's what I call the "hollywood suggestion")? you would ALSO benifite from a more equal distribution

[westkybitcoins]

Here's the point that I was getting at: if the poorest people in a society have adequate wealth to take care of the basics, then why does it matter if there are a few billionaires or even trillionaires around, provided they aren't causing the poorer folk to remain poorer?

But that's the problem, most people on this planet do not have enough wealth to cover even basic living standards. The fact that billionaires even exist is a pretty f*cked up example of what's wrong with the world. The only way they could have accumulated so much wealth is by ripping off less fortunate people down the social pecking order.

thanks, I don't need to answer topic after this at all.


one question I have though: why are middle class "capitalists" always defending the right of millionairs and billionairs? are you realy all thinking you will be one of them (that's what I call the "hollywood suggestion")? you would ALSO benifite from a more equal distribution

Because it's immoral to steal from someone who has done no wrong, regardless of how much money he may have.

If he has done wrong, then that is the issue that should be addressed. Suggesting someone should be OK with theft just because they would profit more than others is a pretty disturbing form of pandering. 

(And surely no one actually believes that every rich person only got rich through wrongdoing. Not only does a single counter-example disprove such a theory, but the idea smacks of collectivism, and is just as bad as "every poor person is only poor because of their own actions and inactions.")

[Mike Christ]

Because it's immoral to steal from someone who has done no wrong, regardless of how much money he may have.

If he has done wrong, then that is the issue that should be addressed. Suggesting someone should be OK with theft just because they would profit more than others is a pretty disturbing form of pandering. 

(And surely no one actually believes that every rich person only got rich through wrongdoing. Not only does a single counter-example disprove such a theory, but the idea smacks of collectivism, and is just as bad as "every poor person is only poor because of their own actions and inactions.")

This is also a very important distinction to make: I'm tired of socialist wannabes who say silly things like "We need to steal from the rich and give to the poor!"  All this does is move the money straight back into the hands of the rich   And this is ignoring that it's immoral to take from a person who got his money through acceptable means; if you give all your money to a person and later realize you want that money back, you can't just demand that he give it back with the threat of violence because you're now broke.  If you allow yourself to be duped, you deserve what you get; only thing we can do is learn from the mistake, but we never seem to do it.

[westkybitcoins]

Here's the point that I was getting at: if the poorest people in a society have adequate wealth to take care of the basics, then why does it matter if there are a few billionaires or even trillionaires around, provided they aren't causing the poorer folk to remain poorer?

But that's the problem, most people on this planet do not have enough wealth to cover even basic living standards. The fact that billionaires even exist is a pretty f*cked up example of what's wrong with the world. The only way they could have accumulated so much wealth is by ripping off less fortunate people down the social pecking order.

You honestly believe that to be true, in every case? You're not just collectivizing all wealthy individuals, right?

Regardless, it's true that most of humanity could probably be considered as living in poverty. And that's mainly the result of oppressive systems that keep it that way, systems that are typically run by fairly rich individuals.

But simply attacking their wealth isn't going to change that system; even if they just gave it all away they'd have it right back a generation later. Changing the system to remove the oppressive restrictions and tributes must come first, then the "problem" of wealth inequality will fix itself.

[Hawker]

Here's the point that I was getting at: if the poorest people in a society have adequate wealth to take care of the basics, then why does it matter if there are a few billionaires or even trillionaires around, provided they aren't causing the poorer folk to remain poorer?

The rich are rich because they're profiting from the poor; this can only happen in hierarchical relationships.  The current system is in the shape of a pyramid: the bottom ranks make the most, but they're also the biggest rank, and so divided, they each make far less than the members of the topmost rank, who make the least, but divide that wealth between very few people.  A huge amount of energy is being input by the bottom ranks, while the least amount of energy is being input by the topmost rank; the discrepancy is in why, despite each individual worker providing equal amounts of time and labor, some are paid very little, while others are paid a lot.

Socialism seeks to squash this divide; in the hierarchical system, you have a small group of owners who have the wealth to employ workers who generate more wealth for them; no business owner will ever hire a worker he cannot profit from.  In the non-hierarchical system, each worker holds a stake in the company, and though they perform different jobs of varying intensity, they each get a fair cut in profits generated; if the company does well, they all become richer; if the company does poor, they all become poorer.  This doesn't change the fact that company A can do far better than company B, but it certainly fails to centralize the world's wealth into a very small group of hands: it's not "Bill and Joe profits from Jason's and Lucy's labor", it's "Bill and Jason profit together, and Joe and Lucy compete with Bill and Jason."

I don't see anything wrong with voluntary poverty, don't get me wrong; if a person wants to be impoverished, that's his own business--perhaps he is a writer, or an otaku.  My concern is for the people who work 8+ hour shifts every day and still have to look for more jobs to support themselves and their family, meanwhile those at the top of the system have more wealth than they know what to do with (usually involving empires and lobbying and such.)  I don't find this agreeable; people who input a great amount of work should get a corresponding amount of profit.

The debate about inequality is all about winners and losers and while I see what you are saying, I'd like to point out how things look from the winner's point of view.

I used import container loads of electronics, mainly LCD TVs, to the UK from China.  A container took 12 weeks to get from China to the UK.  By the time it arrived, all the stock was sold and was scheduled for delivery to homes in the UK.  It cost me more to get the TVs from the docks to a person's home than it cost to have the TV assembled and transported to the UK.  And the driver of that cost is the UK labour cost.

To my innocent mind, it is clear that the UK labour cost will be forced down to compete with the Chinese labour cost.  It doesn't matter about hierarchies or about how hard a man works.  The container revolution began in 1974 or so.  Since then, every worker in the world has had to compete on a level playing field and those workers who live in Western countries are going to see their incomes fall.  

As I say, this is the point of view of someone who wins from the container revolution.  Every penny taken off my UK workers wages went directly to my bank account.  But I don't see how those wage cuts can be avoided.  So a certain amount of inequality is inevitable.

However that does not mean poverty, defined as being unable to afford food and housing, is inevitable.  The same technologies that force down wages are also forcing down the prices of food and of consumer goods.  If healthy people of good character (not drug addicts for example) are not able to make ends meet, then the political system is doing something seriously wrong as we live in an age of abundance.

[FCTaiChi]

The real problem is that many wealthy people create the laws that control how wealth is handled, and disturb the order to the point that the ability for others to maintain the standard lifestyle is destroyed.  Then they propagandize and create their own order in society, destroying education, and creating a mindless subservient class that thinks they have a chance at the same privilege.

[capoeira]

Here's the point that I was getting at: if the poorest people in a society have adequate wealth to take care of the basics, then why does it matter if there are a few billionaires or even trillionaires around, provided they aren't causing the poorer folk to remain poorer?

But that's the problem, most people on this planet do not have enough wealth to cover even basic living standards. The fact that billionaires even exist is a pretty f*cked up example of what's wrong with the world. The only way they could have accumulated so much wealth is by ripping off less fortunate people down the social pecking order.

thanks, I don't need to answer topic after this at all.


one question I have though: why are middle class "capitalists" always defending the right of millionairs and billionairs? are you realy all thinking you will be one of them (that's what I call the "hollywood suggestion")? you would ALSO benifite from a more equal distribution

Because it's immoral to steal from someone who has done no wrong, regardless of how much money he may have.

If he has done wrong, then that is the issue that should be addressed. Suggesting someone should be OK with theft just because they would profit more than others is a pretty disturbing form of pandering.  

(And surely no one actually believes that every rich person only got rich through wrongdoing. Not only does a single counter-example disprove such a theory, but the idea smacks of collectivism, and is just as bad as "every poor person is only poor because of their own actions and inactions.")

I'm not saying that every rich person only got rich through wrongdoing, BUT it can't be denied, not by anyone, that they are rich (indirectly or directly, doesn't matter) because thare are billions of people who are paid $5 a month.

--

to make the situation more clear for some minds which are kind of closed:

imagine, back in the days, humans lived in caves, hunting mammoths. They have a leader, some people are better at hunting than others, some are even to old to hunt or have no ability at all.
so they go out to hunt. the leader is making a good job, best hunters are making a good job too, even te worse hunters are helping.
so they got a mammoth, everybody happy.
if we look at animals, probably the leader cut his meat first, than the best hunters, and so on. people with no ability to hunt cut their peaces at last. nothing wrong with this.
now let's translate the situation to modern world: leader takes half of mammoth, much much more he can ever eat. best hunters take all the rest of the good meat. worse meat for the rest of the hunters; all hunters take more meat than they can ever eat.
the rest (more than half of the clan) gets fat and peaces which rested at the bones.

(this doesn't even include the fact that in our world you can have ability of being the best "hunter" in the world, but you will never be a "hunter", simply because you were born poor)

[westkybitcoins]

Here's the point that I was getting at: if the poorest people in a society have adequate wealth to take care of the basics, then why does it matter if there are a few billionaires or even trillionaires around, provided they aren't causing the poorer folk to remain poorer?

But that's the problem, most people on this planet do not have enough wealth to cover even basic living standards. The fact that billionaires even exist is a pretty f*cked up example of what's wrong with the world. The only way they could have accumulated so much wealth is by ripping off less fortunate people down the social pecking order.

thanks, I don't need to answer topic after this at all.


one question I have though: why are middle class "capitalists" always defending the right of millionairs and billionairs? are you realy all thinking you will be one of them (that's what I call the "hollywood suggestion")? you would ALSO benifite from a more equal distribution

Because it's immoral to steal from someone who has done no wrong, regardless of how much money he may have.

If he has done wrong, then that is the issue that should be addressed. Suggesting someone should be OK with theft just because they would profit more than others is a pretty disturbing form of pandering.  

(And surely no one actually believes that every rich person only got rich through wrongdoing. Not only does a single counter-example disprove such a theory, but the idea smacks of collectivism, and is just as bad as "every poor person is only poor because of their own actions and inactions.")

I'm not saying that every rich person only got rich through wrongdoing,

That's good to hear (I've come across that idea many times.)

BUT it can't be denied, not by anyone, that they are rich (indirectly or directly, doesn't matter) because thare are billions of people who are paid $5 a month.

Ah, well, I guess I'll deny it.

This seems to be a common misconception, that the pie of wealth is fixed, and the best we can do is to cut that pie into pieces that are more fairly sized for people. Of course, were the analogy accurate, it would imply that for someone to receive more of the pie, someone else, somewhere, has to receive less.

The truth is that wealth, when allowed to be created (that's critical) can lead to a larger pie. This means that it's possible for *everyone* to receive bigger pieces. And it's even possible for the smaller pieces to grow larger at a much faster rate than the larger pieces do. The technology industry, including Bitcoin, is IMO the most obvious example of this.

Wealth redistribution, on the other hand, creates incentives and situations that suppress the growth of the pie of wealth.

It makes more sense to (1) ensure that the playing field is fair and open, and (2) to allow wealth to be freely created and legitimate progress (social and technological) to occur unimpeded.

--

to make the situation more clear for some minds which are kind of closed:

imagine, back in the days, humans lived in caves, hunting mammoths. They have a leader, some people are better at hunting than others, some are even to old to hunt or have no ability at all.
so they go out to hunt. the leader is making a good job, best hunters are making a good job too, even te worse hunters are helping.
so they got a mammoth, everybody happy.
if we look at animals, probably the leader cut his meat first, than the best hunters, and so on. people with no ability to hunt cut their peaces at last. nothing wrong with this.
now let's translate the situation to modern world: leader takes half of mammoth, much much more he can ever eat. best hunters take all the rest of the good meat. worse meat for the rest of the hunters; all hunters take more meat than they can ever eat.
the rest (more than half of the clan) gets fat and peaces which rested at the bones.

I see what you are saying, but I think the analogy is flawed. When talking about the poor, we aren't talking about invalids who cannot provide for themselves, even when given the means to. And if the hunters in this analogy all have some reasonable ability to hunt, then shouldn't the question of "How did this state of affairs come about?" be broached? Because again, if the system that maintains this state of affairs isn't addressed, any attempts to modify the outcome is going to be short-lived.

The disparity in the outcomes should be a clue that something deeper is going on; fix the deeper issue, and the outcomes will fix themselves. Attempting to focus on the outcome as the means to an end will leave the underlying problem alone, and will eventually undo all the work done to adjust the outcome to one's liking.

[cryptasm]

You honestly believe that to be true, in every case? You're not just collectivizing all wealthy individuals, right?

Regardless, it's true that most of humanity could probably be considered as living in poverty. And that's mainly the result of oppressive systems that keep it that way, systems that are typically run by fairly rich individuals.

But simply attacking their wealth isn't going to change that system; even if they just gave it all away they'd have it right back a generation later. Changing the system to remove the oppressive restrictions and tributes must come first, then the "problem" of wealth inequality will fix itself.

Yes in most cases I think that's true. It doesn't matter if you're the CEO of Dow Chemical who poisoned thousands of people in Bhopal or the multi-millionaire CEO of some charity, there is no need to accumulate such ridiculous amounts of wealth. People should be rewarded for hard work, if that were the case, all of the slaves working 60 hours a week @ $2 a day to make our clothes/consumer goods/food etc would be relatively wealthy. US Macdonald's employees work ~50/60 hours a week, their wages are so low that they still have to claim foodstamps to feed their families yet they're still vilified by the media/society as scroungers. Guaranteed the CEO of MacDonalds has never flipped a burger in his/her life and probably smarmed and backstabbed his way to the top of the corporation, that motherfucker enforces policies that fire workers who try to unionise/ask for higher wages etc.

Corporations dictate what salaries their workers get paid, I don't care whether their workforce is outsourced to some corrupt third-party, they are still the people who decide, not oppressive regimes. No doubt there are some nasty countries who exploit their workers more than the West, but we're supposed to lead by example in the 'developed' world. Working conditions in the factories that make Apple/Mac goods etc are so bad that they've put nets under all the windows to stop their workforce from commiting suicide, juxtapose that with the happy/glossy family adverts you see on TV for Apple products. How is it right that there are people who earn more than a hour than I can make in year?

[capoeira]

cryptasm is the man

i wanted to respond the topic but someone on facebook fed me with new thoughts, so my quickresponse to that question: " What's wrong with unequal wealth distribution?" is: If you ask that you have to study: history (focus on colinalism), sociology and ethics



so here is my new food for thoughts:

once BTC is dominant currency, and 95% of BTCs are in the hand of 5% of world population. why would those 95% who got the rest stay with Bitcoin? they will abandon it and simply adopt another coin, wouldn't they? BTC will have only value between the richs, which would make them useless.
(just beginning to think about this, a guy on facebook gave me that "food" 10min ago; sharing this "food" with you guys)

[Hideyoshi]

If rich value them and use them to trade, why would they be useless? Can you trade 1 kilogram bars of gold? No. But I bet you wish you could.

[capoeira]

If rich value them and use them to trade, why would they be useless? Can you trade 1 kilogram bars of gold? No. But I bet you wish you could.

'cause they can't pay them "slaves" nor "bread"

[Hideyoshi]

If rich value them and use them to trade, why would they be useless? Can you trade 1 kilogram bars of gold? No. But I bet you wish you could.

'cause they can't pay them "slaves" nor "bread"

I do not understand.

[Mike Christ]

If rich value them and use them to trade, why would they be useless? Can you trade 1 kilogram bars of gold? No. But I bet you wish you could.

'cause they can't pay them "slaves" nor "bread"

I do not understand.

You're not alone