What impact will Bitcoin have on income inequality?

[turvarya]

I thought you guys in the abitcoin thread would know their stuff and why Bitcoin was started in the first place. Satoshi clearly by using a news article as some kind of finger print in abitcoin that related to the BOE printing money then you can be sure he had the expansion of fiat, Central banks, the Federal Reserve and inflation as an agent of inequality in his sights.


The simple fact is governments and big banks inflate the currency for various self serving reasons. Without the ability to print ie sound money we would have deflation, the terrible situation where we have to pay less for the same stuff. The amazing thing is how people have swallowed the idea that that is bad for us! So the poorest at the fringes of society are most affected by inflation, the rich with assets however can increase their wealth. Bingo inequality. But also I want to be clear there will always be inequality and it's not nessecarly a bad thing but the extreme inequality we are seeing today is due to money printing and also even if we have inequality the poorer are more able to live a better life if saving is encouraged and prices for basic goods that the poorest have to buy are not inflated. Inflation is the thief of particularly the middle class who try to save and earn but are on a treadmill of keeping up with inflation. It drives me nuts that the governments twist the figures and say we have almost no inflation when ina few years most people have to pay almost 50% more for the same goods or even more.

 http://imgur.com/O8D4LUV

Deflation also helps the rich much more, than the poor.
You can postpone the purchase of a luxury good, but you can't postpone the purchase of something essential like food or rent.
Either inflation or deflation: The question is, can you afford to save money?
I don't see any difference in either we have inflation and the rich just buys some real estate to increase his wealth over time or we have deflation and the rich keeps his money to increase his wealth over time.

[1715041319]

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[1715041319]

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[1715041319]

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[abyrnes81]

"Income inequality?"  Hope I am not getting lost in semantics but "income inequality" should never be the target.  Equality of opportunity, economic mobility via invisible hand (not in handcuffs) etc. are good.  "Income inequality" sounds like a stepping stone to redistribution/socialism/communism to me. 

http://favimages.net/image/80563/

Income inequality is the direct result of redistribution.

Yes you're  right , the real problem of bitcoin is the first distribution  (in '09 -'10  & '11).

[Flashman]

If tomorrow all of the money and wealth were equally distributed to everyone. Within a generation the wealth distribution would be right back to where it is today.

I'd say that it would "look like" what we've got today, I figure that some of the people with wealth these days got it by good fortune or work of ancestors that they cannot replicate, so probably only 50% of the same folks would get it, and the other 50% (Of the 1% and each other tier) would have spotted chances and got a leg up from below.

Anyway, wouldn't affect a whole lot of the people on the hand to mouth survival level. However, I'm more of a believer in "trickle up" economics than "trickle down" figure to create economic activity you need to make the greedy bastards work for it.

[jbreher]

and for those that think start ups should move to arkansas to pay people at $6.25 or move to africa for $2 a day.. then that act alone proves that greed of companies will always outweigh any attempt to improve world equality.

When businesses move operations from high-wage regions to low-wage regions, that:
- increases the supply of free potential workers in the high-wage region
- increases demand for workers in the low wage region

leading to supply/demand rebalancing resulting in:
- increased wage rate in the low-wage region
- decreased wage rate in the high-wage region

thereby trending toward greater absolute wage equality.

[marhjan]

Equality is a myth and a fool's errand to pursue.   We are NOT equal in basically any respects and we can never be so.   Some are more intelligent or stronger or better chess players or dancers.  I am not the pinnacle of human evolution and neither are any of you - we're all just individuals striving to do the best we can.

This also doesn't mean Asians are better than whites or men are better than women - those are also silly myths

Fuck equality!  Viva la bitcoin....   or something   

[Flashman]

This also doesn't mean Asians are better than whites

Well actually, their IQ distribution is wider and flatter, average is about the same as Caucasians, so they've got smarter smarties but dumber dumbos.

[Soros Shorts]

and for those that think start ups should move to arkansas to pay people at $6.25 or move to africa for $2 a day.. then that act alone proves that greed of companies will always outweigh any attempt to improve world equality.

When businesses move operations from high-wage regions to low-wage regions, that:
- increases the supply of free potential workers in the high-wage region
- increases demand for workers in the low wage region

leading to supply/demand rebalancing resulting in:
- increased wage rate in the low-wage region
- decreased wage rate in the high-wage region

thereby trending toward greater absolute wage equality.

This brings up an interesting question: how would you pay a global team, say a distributed software development team where the members came from countries with vastly different local wages? I was once part of a software team where I made over 3x of what the team manager did because he came from a country with lower prevailing wages. Of course I didn't complain but at the same time it didn't seem fair.

[Flashman]

Although if bitcoin went to mad money valuation right this second now, there would be none of the current 1% in the 1%... because most of the top 5% is Satoshi by himself we suspect (Or about 7% and dropping, since all 21M aren't out yet)

I made over 3x of what the team manager did because he came from a country with lower prevailing wages. Of course I didn't complain but at the same time it didn't seem fair.

Well he was probably able to get a decent place for housing costs of $200 a month, and get a slap up lunch from a roadside vendor for 50c to $1.

[NewLiberty]

in california, a guy working at walmart or mcdonalds gets paid $9 an hour (minimum wage of that state)
in Arkansas, a guy working at walmart or mcdonalds gets paid $6.25 an hour (minimum wage of that state)

that means right now, this second.. it take 57 hours of labour to buy one bitcoin from arkansas
that means right now, this second.. it take 40 hours of labour to buy one bitcoin from california

You fail to take taxes into account as well as the overall labor market of both states.

CA generally has a much higher tax burden so just because their minimum wage is higher does not mean that a worker has more after-tax income. Plus there are several federal transfer payment programs that fade away as income increases, making someone's effective tax rate >100% once the net effect of these transfer payments are taken into account.

Plus very few people earn minimum wage so this is a bad comparison (even for workers who work at MCD or WMT)

1. people on minimum wage are not on that much of a tax rate no matter what state/country they are in.
2. the difference between $6.25 and $9 is over 40% difference in income.. again tax differences wont offset the spread
3. if you think that not many people work for minimum wage, check out the news, in regards to mcD wage protests (which gave me the idea)
4. example: californias state website shows someone under $28k/year pays only $300 in income tax
more importantly
5. if EVERYONE was on the same value minimally world wide that ensured no matter where you lived your income was above "living costs" then there would be equality. $15 is the highest 'living cost' minimal thus i think it fair to set that as a fair market value for a bitcoin employee.

and for those that think start ups should move to arkansas to pay people at $6.25 or move to africa for $2 a day.. then that act alone proves that greed of companies will always outweigh any attempt to improve world equality. unless businesses treat the sweat of one mans labour the same no matter what zip code they are under, inequality will continue

Different locations have different state burdens (the mandatory "services" that you must accept and pay for).  These affect cost of living, not just through taxes but also through pricing, building regulations (making building expensive) and all sorts of regulatory intrusions.

It isn't so much a dichotomy between greed vs equality as government market distortions (which minimum wages are also an example of).  It is however fostering freedom to pay people in areas (like Arkansas and Africa) without these burdens, so do your start up there if you like.

Increasing Minimum wage in the USA is pretty much baked in to the economic pie for other reasons (the Fed needs to create inflation, which is the hidden taxation).  So don't be fooled...the USA will get higher minimum wages, but it has NOTHING to do with creating equality.  It is instead about how to enrich the central banking and government tax base.

[brian_23452]

No appreciable impact at all.  Why would you expect it to have any impact on income inequality?

Income inequality is exacerbated by the wealthy manipulating the state for their benefit. Fiat is either controlled by the government or by the wealthy bankers themselves(with some regulation) as seen in the US. Decoupling those levels of controls allow individuals to fail or succeed to a greater degree on their own merits.

Income inequality will always exist . Bitcoin may nudge it back where it wasn't so extreme however.

The wealthy elite use their power and influence to control the means of production.  The specific currency in use has nothing to do with it.  Nor does the ability to control the currency (in point of fact, the rise of capitalist systems occurred during a period of time when most governments backed their currency with gold or silver).  On the contrary, inflation is actually a [very very small] check on income inequality.  But it makes little difference; historically the rate of return on capital investment has vastly outpaced inflation (i.e., bankers aren't making their money printing dollar bills).

Just using your own example of the United States, if manipulation of the currency is a significant cause of income inequality, one would expect that income distribution would have been much more even prior to the USA changing over to fiat.  And yet we see that reality is the exact opposite. 

[NewLiberty]

Really.... who cares if it has any impact or not on income inequality?
This isn't the problem that Bitcoin is meant to solve.
It is entirely external to the protocol.

[railyako]

I think this will decrease income inequality as it can bridge the gap between the seller and buyer and can remove the middle man. Reducing costs and probably gaining more for the seller.

[moirasheeran29]

I think it will have a positive impact when it comes to income inequality. The seller can now have a direct trasaction to the buyer with easier and more efficient payment method.

[faithofb]

There can not be any impact unless the gap between the rich and d poor can be bridge, then bitcoin can as well make an impact. We might invested the same way but our income can never be d same whatsoever equipment we used.

[Nelly.G0211]

Will things get better?  Worse?  No impact at all?

Well we all know there are "whales" in crypto market, and they earn huuuge money by investing miilions of dollars. But still. Let's look at people who bought BTC for 2k, people who participated in Storm ICO, Kyber, Quarkchain, Icon. Lots of people earned great money. I don't know for sure, has this situation become better or not, I just know that lots of people with ordinary amount of money in their pockets earned lots of money with the help of crypto.

[BagzMM]

Will things get better?  Worse?  No impact at all?

Maybe in the sense of reducing income inequality it is because it provides people to earn and have good profit. It develops the confidence of every investors to take every risk.

[micher143]

Will things get better?  Worse?  No impact at all?

Well, inequality of income are one of the problem in the community. We need to admit that mostly of us are when it comes to profit or income are considered as a big issue especially in our work. However, I think that because of bitcoin and it's system it may lessen the income inequality because it may help us to gain financial freedom much easily and much fastest way.

[kent47400]

I keep learning to be the best.
besides trading Bitcoin with Altcoin or Bitcoin with Fiat, I continued to learn to follow the bounty campaign.

there are videos, blogs, translators, social media etc. In addition to the income from trading, I benefited from Bounty as well.

[account78]

Bitcoin now implies income of many people.
For me, they probably occupy my working time the most and it governs quite a lot my earnings way in a month.
Actually they help me earn a lot of money, but also robbed me of not a lot of property.

[Askend]

Yes, this will surely happen, even this imbalance will occur between two people who have the same position (level of education and economy), and then, one of the two people has knowledge of bitcoin and bitcoin trading. while the other does not, there we can see that the two people will have a different amount of income.