0.1% guys hold 50% Bitcoins, that's too CENTRALIZED!

[Elwar]

This chart shows that I need to buy some more Bitcoin so that I am up there with the elite.

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[phillipsjk]

Why do you consider mere income disparity to be a problem?

Isn't the real problem HOW they earned their money (rent seeking behavior), not how much of it they earned?

Income disparity, by itself is not a problem, it is a symptom of structural problems in society. As mentioned in that illustrated essay, income disparity would not be a problem if the "American Dream" of making it big was a reality.

Without upward mobility, you essentially have a caste system. The CEO does not work so much harder than a production worker to justify 300x the wage. The CEO may have some personal liablilty attached, but the whole point of coporations is limited liability for shareholders.

I also think Governments are very useful to society. They allow the population to pool their recources for infrastructure (generally a natural monopoly), dispute resolution, and a social safety net. I think giving money to poor people can stimulate the economy more than giving tax cuts to the rich: the rich are very good at aquiring money. The poor will spend it.

[evoorhees]

I'm sure the Libertarians will come to the conclusion that all of the problems listed (if they actually agree income disparity is a problem) are the result of government intervention.

It does not make sense to discuss income disparity without discussing production disparity. Consider the production disparity between Steve Jobs and the average blue-collar worker. Consider the vast difference in contribution to society and markets made by the two of them.

If you wish to reduce income disparity, you will necessarily have to reduce production disparity - for the former is generally the consequence of the latter in a market economy. Competition for productive resources will drive the price paid for those resources ever higher (encouraging production and ensuring that such production falls upon the most efficient utilizer of such production).

So, unless you can get the productiveness of the blue collar workers raised to the level of Steve Jobs, you will instead have to reduce the productiveness of Steve Jobs down toward the blue collar worker.

Income disparity will diminish to the extent society moves toward universal impoverishment.

[Anonymous]

I'm sure the Libertarians will come to the conclusion that all of the problems listed (if they actually agree income disparity is a problem) are the result of government intervention.

It does not make sense to discuss income disparity without discussing production disparity. Consider the production disparity between Steve Jobs and the average blue-collar worker. Consider the vast difference in contribution to society and markets made by the two of them.

If you wish to reduce income disparity, you will necessarily have to reduce production disparity - for the former is generally the consequence of the latter in a market economy. Competition for productive resources will drive the price paid for those resources ever higher (encouraging production and ensuring that such production falls upon the most efficient utilizer of such production).

So, unless you can get the productiveness of the blue collar workers raised to the level of Steve Jobs, you will instead have to reduce the productiveness of Steve Jobs down toward the blue collar worker.

Income disparity will diminish to the extent society moves toward universal impoverishment.

Well, productiveness isn't the right word. I would consider it value. A blue collar worker does not produce scarce work. Anybody can till a garden or assemble a toy. The labor for this work is readily available and hence cheap. It has nothing to do with productivity. It doesn't matter if a worker optimizes how many toys he churns out per second. It will never reach the scarce value that comes from a facilitator such as Steve Jobs. The management capabilities, the perception and attention-to-detail that comes from such a man is not easily achieved nor always attainable by every man. The fact is Steve Jobs is more valuable to more people than the average blue-collar worker and the price of his time will reflect such.

To say they should have the same income is to say people should be enslaved and forced to value the common man the same as somebody with scarcer skills. It is almost to say that man should not be allowed love discriminately, that he should not be allowed to prefer certain things or to desire at all. It is to tell a man that he should not love.

We love men for their virtues and what they offer. To say we should ignore that and desire nothing and treat everything indiscriminately is to eliminate the purpose of life itself: to be happy and embrace what we desire.

This why this idea of equality is dysfunctional. It will, as you said, leave everyone in an impoverished state of no choice and no ability to love nor desire.

[phillipsjk]

If you wish to reduce income disparity, you will necessarily have to reduce production disparity - for the former is generally the consequence of the latter in a market economy. Competition for productive resources will drive the price paid for those resources ever higher (encouraging production and ensuring that such production falls upon the most efficient utilizer of such production).

Interesting point. The problem is that even leveraging automation, it is impossible for the blue-collar worker to out-produce the CEO because the CEO is deemed to be responsible for all of the production of the workers under him or her. Sometimes CEO bonuses don't even seem to rely or performance measurements.

If income disparity really was tied to productivity, I would not have a problem with it. Workers would naturally gravitate to jobs where they are more productive and thus paid more.

[Anonymous]

If you wish to reduce income disparity, you will necessarily have to reduce production disparity - for the former is generally the consequence of the latter in a market economy. Competition for productive resources will drive the price paid for those resources ever higher (encouraging production and ensuring that such production falls upon the most efficient utilizer of such production).

Interesting point. The problem is that even leveraging automation, it is impossible for the blue-collar worker to out-produce the CEO because the CEO deemed to be responsible for all of the production of the workers under him or her. Sometimes CEO bonuses don't even seem to rely or performance measurements.

If income disparity really was tied to productivity, I would not have a problem with it. Workers would naturally gravitate to jobs where they are more productive and thus paid more.

That's the thing: it was never about productivity. It's about the value of the person to others.

If it was tied to "productivity", people would have to be forced to value based on the arbitrary metric of how many units of something was accomplished. Do you really want a world where people dig bottomless ditches with no use at all?

[phillipsjk]

You missed my point about the caste system. Some people are considered more valuable because of their class, not their skills.

[Anonymous]

You missed my point about the caste system. Some people are considered more valuable because of their class, not their skills.

That's a cultural problem not an economic one. It doesn't justify slavery by a central authority telling people who's to be valued for certain tasks and who's not.

[nighteyes]

Possibly relevant to most of the free market/government intervention discussion:
In the case of bitcoin, I'm not sure if the apparent disparity will really be a problem in the long run. The network (and markets based on it) are not able to distinguish between a hoarded Bitcoin and a lost bitcoin. The value of bitcoin will always be based on coins actually in circulation. The biggest risk is that some of the large holders suddenly decide to sell everything, crashing the price (by putting more coins in circulation).
The profit-maximising hoarder would be wise to sell their coins as slowly as they can; unless they expect the value to eventually drop to zero (I think it will approach that within about 25 years, but not the near term). Selling coins puts them back in ciculation: likely spreading them out among more holders.

Its already a potential game ending problem....not many are going to work for the 75% hoarder community like Immanuel Go who sit on azz.

Contribute $1 million and you get 13 cents reward(and declining). Dont worry, Immanuel Go et al will take credit for rise in bitcoin price too. If you disagree, you are just a "hater" of the "ballerz". Your haterade is just jealously to them.

[Anonymous]

Possibly relevant to most of the free market/government intervention discussion:
In the case of bitcoin, I'm not sure if the apparent disparity will really be a problem in the long run. The network (and markets based on it) are not able to distinguish between a hoarded Bitcoin and a lost bitcoin. The value of bitcoin will always be based on coins actually in circulation. The biggest risk is that some of the large holders suddenly decide to sell everything, crashing the price (by putting more coins in circulation).
The profit-maximising hoarder would be wise to sell their coins as slowly as they can; unless they expect the value to eventually drop to zero (I think it will approach that within about 25 years, but not the near term). Selling coins puts them back in ciculation: likely spreading them out among more holders.

Its already a potential game ending problem....not many are going to work for the 75% hoarder community like Immanuel Go who sit on azz.

Contribute $1 million and you get 13 cents reward(and declining). Dont worry, Immanuel Go et al will take credit for rise in bitcoin price too. If you disagree, you are just a "hater" of the "ballerz". Your haterade is just jealously to them.

People who have a good portion of the blockchain aren't stealing from anybody. In order to hire people or buy things, they have to provide equitable value. There's no coercion as far as I see. The amount they have is useless if they aren't spending it and the demand for them to spend it will only increase. They will inevitably have to bring value to the economy.

The only potential vice I see is the envy that may come with the increasing value of their wealth.

[phillipsjk]

You missed my point about the caste system. Some people are considered more valuable because of their class, not their skills.

That's a cultural problem not an economic one. It doesn't justify slavery by a central authority telling people who's to be valued for certain tasks and who's not.

Economics is "The study of how people allocate their scarce resources to satisfy their wants." You can not separate the study of economics from the study of culture. The "reasonable assumptions" taught in micro-economics break down when applied on the macro scale.

[Anonymous]

You missed my point about the caste system. Some people are considered more valuable because of their class, not their skills.

That's a cultural problem not an economic one. It doesn't justify slavery by a central authority telling people who's to be valued for certain tasks and who's not.

Economics is "The study of how people allocate their scarce resources to satisfy their wants." You can not separate the study of economics from the study of culture. The "reasonable assumptions" taught in micro-economics break down when applied on the macro scale.

Religion and superstition is a disease. What else can I say? The fact is once the under-caste learns that their religion is bullshit, they can ditch the label and work where they wish and how they wish. The only thing that is keeping them down is their mentality. Nobody is forcing them to do anything except their imaginary gods.

[evoorhees]

If you wish to reduce income disparity, you will necessarily have to reduce production disparity - for the former is generally the consequence of the latter in a market economy. Competition for productive resources will drive the price paid for those resources ever higher (encouraging production and ensuring that such production falls upon the most efficient utilizer of such production).

Interesting point. The problem is that even leveraging automation, it is impossible for the blue-collar worker to out-produce the CEO because the CEO is deemed to be responsible for all of the production of the workers under him or her. Sometimes CEO bonuses don't even seem to rely or performance measurements.

You say the CEO is "deemed" to be in charge as if it's an arbitrary, random assignment?  In general, he or she is deemed so because of their proven track record as the best producers.

If CEO pay doesn't correspond to performance, then don't invest in that company - for clearly it manages its own funds poorly. In a capitalist marketplace, those companies which pay excessive amounts for sub-par performance will be out-competed long-term. So it's a self-correcting problem.

Of course, when the government bails out the failures, all bets are off, and the foolishness of unproductive CEO's becomes the unfortunate expense of society.

[Anonymous]

If you wish to reduce income disparity, you will necessarily have to reduce production disparity - for the former is generally the consequence of the latter in a market economy. Competition for productive resources will drive the price paid for those resources ever higher (encouraging production and ensuring that such production falls upon the most efficient utilizer of such production).

Interesting point. The problem is that even leveraging automation, it is impossible for the blue-collar worker to out-produce the CEO because the CEO is deemed to be responsible for all of the production of the workers under him or her. Sometimes CEO bonuses don't even seem to rely or performance measurements.

You say the CEO is "deemed" to be in charge as if it's an arbitrary, random assignment?  In general, he or she is deemed so because of their proven track record as the best producers.

If CEO pay doesn't correspond to performance, then don't invest in that company - for clearly it manages its own funds poorly.

Exactly, if he wants to achieve his own society, he can start his own mutual fund that invests in companies that he finds morally acceptable. If the desire for his moral world is truly there, he will be pretty successful.

[evoorhees]

You missed my point about the caste system. Some people are considered more valuable because of their class, not their skills.

Again, companies which hire based on anything but productive performance will be out competed in a free market system. Take two firms, if one of them promotes based on "caste" and the other based on skills, who would you rather bet on? Such bets occur in the equity markets, and companies who make poor decisions will find their share price falling, impoverishing the shareholders until they correct their course.

To the extent that I am wrong, the company will fall apart and fail... and so who cares?  The only reason to care in today's society is because the government prevents this failure through subsidy, bailouts, and monetary manipulation... it perpetuates incompetence and inefficiency.

[rainingbitcoins]

Interesting point. The problem is that even leveraging automation, it is impossible for the blue-collar worker to out-produce the CEO because the CEO is deemed to be responsible for all of the production of the workers under him or her. Sometimes CEO bonuses don't even seem to rely or performance measurements.

I like when they get a huge bonus for making the company extra money by cutting worker salaries and benefits or shipping jobs across the world. It takes a true visionary to come up with a plan like that. That's scarce value right there. And if you somehow fail at that, hey, golden parachute.

Religion and superstition is a disease.

The only true god is the free market.

To say they should have the same income is to say people should be enslaved and forced to value the common man the same as somebody with scarcer skills. It is almost to say that man should not be allowed love discriminately, that he should not be allowed to prefer certain things or to desire at all. It is to tell a man that he should not love.

Equality = slavery & money = love. Gotcha.

[Anonymous]

Religion and superstition is a disease.

The only true god is the free market.

...and the free market is the desires of the people. Yes, what the people want is god. Now you're getting it.

The only true god is the free market, indeed.

[phillipsjk]

Religion and superstition is a disease.

The only true god is the free market.

...and the free market is the desires of the people. Yes, what the people want is god. Now you're getting it.

The free market relies on the price system. It imperfectly approximates the desires of the population. It ingores externalities that are not easy to price. To blindly honour the free-market is just as dangerous as blindly following any other religion.

[Anonymous]

Religion and superstition is a disease.

The only true god is the free market.

...and the free market is the desires of the people. Yes, what the people want is god. Now you're getting it.

The free market relies on the price system. It imperfectly approximates the desires of the population. It ingores externalities that are not easy to price. To blindly honour the free-market is just as dangerous as blindly following any other religion.

Oh and you are so wise and virtuous that you know what perfect is.

The free market relies on what people desire and what they are willing to pay for it. It's my damn birthright to solicit trades as I please for whatever value that is dictated in said trades. You think you have a better system to determine the prices? You think somebody knows better than we do? What you are saying is that I and other men don't know what's best for ourselves and that you or some other leader does! You say we aren't smart nor good enough to trade among ourselves!

Externalties? So, you're saying regular people can't measure these supposed coercions and only "special" authorities can and are capable of stopping them. Again, man is an irrational animal to you and only your whims know best!

To hell with you! You make me want to vomit!

To blindly follow the whims of a central regime or man is slavery! That is what you advocate! Slavery!

I swear on my life that I will not follow your whims, morality nor authority! I live for the right for every man to own himself and what he produces! You will not take what I produce away from me nor anybody else as long as I can help it!

I spit on your entire idea of tyranny.

[phillipsjk]

The free market relies on what people desire and what they are willing to pay for it. It's my damn birthright to solicit trades as I please for whatever value that is dictated in said trades. You think you have a better system to determine the prices?

I think the free market is ideal for determing prices. The difficulty is that the free market "knows the price of everything and the value of nothing."

I generally advocate a mixed economy. I have no problem with natural monopolies being under state control since any corporation in charge of such a monopoly would have government powers anyway.