Poor rich people

[Mr. Tea]

Yeah of course, that's what I said:
Income inequality is a non-issue. Absolute or chronic poverty is the real issue.

Yes, and *I* and agreeing with *you*!
I was just pointing out that you seemed to be on the verge of a straw-man argument, i.e. that people who desire a reduction in income inequality would be perfectly happy if all the rich people had their money taken away, without any more money actually going to the poor.

Of course, the number of pounds or dollars printed on your paycheque means nothing in itself, it's what you can buy with it that counts. The current bugbear of the UK economy, house prices, is being driven by a small number of extremely wealthy people who are gradually making it virtually impossible for anyone who isn't on a pretty high salary to own a home.

I am dead against it, but you're missing the point, which is (in this instance) that protectionism only keeps people poor, it doesn't make them poor. Anyway, I'm not talking about trade liberalisation.

That's a pretty facile point, if I may say so. If it's contributing to keeping people in poverty, it is a Bad Thing. (Though of course you acknowledge that, fair enough.)

Actually, open source is pretty much the polar opposite of communism.

Sure, I was parodying the attitudes some idiots have that Microsoft is a 'good, honest, American' company and that open-source is for anarchists, 'hackers', paedos etc.
(Some people really do think this, btw.)

 

[Mr. Tea]

Socialism (or any other form of collectivism) is chattel slavery.

And free healthcare is not actually free, as should be obvious to anybody.

I'm not a socialist, of any stripe. I do, however, believe in the welfare state and the regulation of the market economy.

Naturally I meant 'free to the person using it, at the point of dispensation'. I am well aware drugs do not grow on trees (well, some do, obviously ) and doctors and nurses do not work for nothing.

 

[borderpolice]

Windows?

Windows was not a novel technology when it was developed. It was a rather crappy rip-off of other existing operating systems.

Inferior according to what measures? Isn't it just a standardised platform?

According to almost any measure you like: stability, speed, ease of use, security, software structure ... Yes it was a standard, but any other choice would have been a better. Windows has held back the computer industry for years.

Which is why I'm happy to use him as an example.

I don't understand what you mean.

 

[vimothy]

Yes, and *I* and agreeing with *you*!

Ok, sorry

I was just pointing out that seemed to be on the verge of a straw-man argument, i.e. that people who desire a reduction in income inequality would be perfectly happy if all the rich people had their money taken away, without any more money actually going to the poor.

Yes, it's ridiculous, but I don't think it's a straw man argument because there are plenty of people who are incensed about inequality and about growing inequality. Indeed, it's surely the driver of wealth redistirbution, right?

Of course, the number of pounds or dollars printed on your paycheque means nothing in itself, it's what you can buy with it that counts. The current bugbear of the UK economy, house prices, is being driven by a small number of extremely wealthy people who are gradually making it virtually impossible for anyone who isn't on a pretty high salary to own a home.

In London, do you mean?

That's a pretty facile point, if I may say so. If it's contributing to keeping people in poverty, it is a Bad Thing. (Though of course you acknowledge that, fair enough.)

I was trying to bring that point back to the inequality between individuals rather than states side of the argument. Protectionism in markets (state intervention, nationalisation of industries, government subsidies) always contributes to keeping people poor. Wealth has to be grown, not impeded.

(Oh yeah, and based on what you've said in other threads, I assumed you were against free trade).

Sure, I was parodying the attitudes some idiots have that Microsoft is a 'good, honest, American' company and that open-source is for anarchists, 'hackers', paedos etc.
(Some people really do think this, btw.)

Hairy muff

 

[vimothy]

Windows was not a novel technology when it was developed. It was a rather crappy rip-off of other existing operating systems.

But it's not the same today as it was 1985, hence it has been "developed".

According to almost any measure you like: stability, speed, ease of use, security, software structure ... Yes it was a standard, but any other choice would have been a better. Windows has held back the computer industry for years.

It works fine for me. If other systems are so much better, how come windows is successful? (What OS do you use, btw?)

I don't understand what you mean.

If Gates is an example of the worst excesses of capitalism, then he's a imortant in that respect.

 

[vimothy]

Also worth noting:

Microsoft's Bill gates, the very personification of modern capitalism, himself devotes more to the campaign against disease in the developing countries than the American government does. Between November 1999 and 2000, through the $23 billion Bill and Melinda Gates Health Fund, $1.44 billion went to vaccinate children in developing countries for common diseases and to fund research into HIV/AIDS, malaria, and TB, for example, in developing countries. That is a quarter of what all industrialized nations combined devote to combating disease in the developing countries. So the fact that Bill Gates is worth more than $50 billion should give the poor and the sick of the world reason to rejoice. Clearly they would stand to gain more from a handful of Gateses than from the whole of Europe and another couple WHOs.​

 

[borderpolice]

But it's not the same today as it was 1985, hence it has been "developed".

I didn't say it was. But (1) gate's financial success is dependent on IBM's early 80s decision to sell their PC with MS-DOS, and MS-DOS was a crap rip-off, (2) the subsequent versions of MS-DOS/Windows have mostly been inferior to to offers of the competition. Only recently MS has been putting some serious efforts into R&D, largely because of the security desasters Windows brought to the world. Current MS products tend to be competitive with or better than the competition. But thats a recent developmetn.

It works fine for me.

So what? Anecdotal evidence! Please take into account the global administrative costs that have been caused by the crappy windows design over the years.

Moreover, if windows works fine for you, then the competing products would have been good for you too.

If other systems are so much better, how come windows is successful?

I have used various OSes, more than you will have heard off. I have designed my own. I was offered a high-powered job at MS a few years ago, in their core operating systems division.

MS-DOS was initially successful because it was tied to IBM hardware, and managers bought IBM products, so the initial choice to by MS was not at all influenced by the MS product. later, MS stayed dominant because the costs of switching from MS products to competition would have been too high (or were perceived as such).

Hence the economic success of MS and BG has in effect nothing to do with the quality of their products.

If Gates is an example of the worst excesses of capitalism, then he's an imortant example.

I don't understand. Your point seems to be this: unrestrainded ("Libertarian") capitalism is good because it leads to technological advances which reduce poverty. But gates has impeded technological progess.

 

[Mr. Tea]

I'm in favour of trade that's as free as it can be without facilitating economic exploitation, if that makes sense.
Capitalism to generate wealth and a welfare state to harness some of that wealth for the good of all, with state-owned companies providing the infrastructure (utilities, public transport etc.).

Also, I'm not knocking Gates personally, I know he gives a lot to charidee...

 

[vimothy]

Well DUH, that's because they've got shitloads of money! That statistic reflects more on the sheer volume of their incomes than on the percentage of their incomes they pay as tax.

So the rich contribute more to the state coffers than the poor, which is to say the rich contribute more (in monetary terms) to society than poor people, so it is better to have a rich population than a poor population. Therefore you should encourage people to become rich, not to stay poor.

 

[Mr. Tea]

*sigh*
I'm not trying to 'encourage people to stay poor'. I'm not advocating 90% income tax for anyone above middle management.

I'm saying that rich people have often got rich (or, if they were born into money, stayed rich) by exploiting others. Not always, but often. Have you used one of our extortionate inter-city rail services lately? The guys who run those companies earn more in a year than you or I will in a lifetime. How is that not exploitation?

 

[borderpolice]

So the rich contribute more to the state coffers than the poor, which is to say the rich contribute more (in monetary terms) to society than poor people, so it is better to have a rich population than a poor population. Therefore you should encourage people to become rich, not to stay poor.

The point is that the rich have a tendency to invest their wealth in non-productive ways: yachts private planes fast cars, champagne. If that money was taxed off, it could be spent more productively, in infrastructure, research, develpment aid, education.

 

[vimothy]

I don't see capitalism as the perfect model it purports to be. I think most people will have seen lots of evidence of people in high positions who are there because of previous achievements (and not how productive they are NOW), sycophancy, 'playing the game', 'fitting the mould' etc. To suggest that most businesses are ruthless models of efficiency is laughably contrary to experience.

Capitalism isn't a perfect model, it is the best model.

If it's so easy to hold leadership positions in large corporations, why don't you get a job as a CEO? It's clearly not that easy to manage any group of people, whether it be teenagers, software developoers, construction workers or whatever.

As for "ruthless efficiency", it depends on what you'e comparing it to, doesn't it? Lots of buninesses aren't efficient in any sense. That's why they fail.

2/ It wasn't meant as rhetoric, just shorthand for the argument you presented - it's just the theory that giving the 'top people' the opportunity to earn megabucks entails that all of society will eventually benefit. Think Nozick (one of Thatcher's favourites) coined the term, IIRC.

I don''t feel that the phrase "trickle-down" describes my argument very well.

3/ re lots of vital jobs paying abysmally/not being respected - where shall we start? Binmen, nurses, teachers, blah blah blah. All more vital to a well-functioning society than many people paid way more.

In order to pay these people the money they actually deserve, we would have to liberalise their industries.

 

[vimothy]

The point is that the rich have a tendency to invest their wealth in non-productive ways: yachts private planes fast cars, champagne. If that money was taxed off, it could be spent more productively, in infrastructure, research, develpment aid, education.

Their money is taxed off, in huge amounts. So huge that plenty of them take their money somewhere else. The problem that you have with redistributing all the money that the rich waste (benefiting wine merchants, ship builders, truffle hunters or whatever), is that the rich would no longer have any incentive to be rich. Just like the welfare state provides an incentive to stay at home and not bother trying to get a low paid job, so prohibitive taxes discourage individuals from trying to earn large amounts and companies from paying them. You can easily find figures that show positive correlation between tax cuts and increased amounts of income tax going to the state.

 

[Mr. Tea]

Also, I don't think anyone here is advocating that high earners shouldn't be allowed to enjoy the fruits of the labours; as I'm sure Vim is about to point out, if you take away all incentive to make lots of money, no-one would bother doing it and there'd be no rich people to tax at all. But at the same time, the more you have, the more you can afford to part with. Is your quality of life really any different if you have a disposable income of 3 million quid a year as opposed to 4 million?

 

[borderpolice]

In order to pay these people the money they actually deserve, we would have to liberalise their industries.

This statement suggests that you have an objective measure of how much a worker deserves. Can you explain this measure to me please?

 

[vimothy]

*sigh*
I'm not trying to 'encourage people to stay poor'. I'm not advocating 90% income tax for anyone above middle management.

No, of course not, but subsidising unemployment discourages people from looking for work, and taxing succesful businesses or individuals discourages people from earning a lot.

I'm saying that rich people have often got rich (or, if they were born into money, stayed rich) by exploiting others. Not always, but often. Have you used one of our extortionate inter-city rail services lately? The guys who run those companies earn more in a year than you or I will in a lifetime. How is that not exploitation?

I think that the theory of exploitation is actually a Marxist misreading of value and profit.

On the rail services, that industry is crippled by stupidly inefficient government regulation and bureaucracy.

 

[vimothy]

This statement suggests that you have an objective measure of how much a worker deserves. Can you explain this measure to me please?

Not objective - I'm a libertarian! I say that the market would give a fairer valuation than the government, based on the intersection of supply and demand.

 

[borderpolice]

Their money is taxed off, in huge amounts. So huge that plenty of them take their money somewhere else.

If there is the possibility of taking money somewhere else, it is nto really taxed off.

The problem that you have with redistributing all the money that the rich waste (benefiting wine merchants, ship builders, truffle hunters or whatever), is that the rich would no longer have any incentive to be rich.

Not so fast.

1. tax structure can be such that there is some wage differentiation but not too much. In primary school I wanted to be the best pupil, despite there being only six degrees of differentiation. And countries like japan, or scandinavia prove pretty convincingly that you can have powerful economies (with less absolute poverty) despite smaller wage differentials than in the libertarian ideal.
   
2. Moreover, unrestrained libertarianism does not provide the poor with real incentives to be productive, because they are so preoccupied with the struggle for survival that they cannot develop their abilities.
   
3. There are not enough rich in the world. The real bulk of taxes always comes from the middle classes. Hence, if you want to really increase the wealth of a society, you need to broaden that group.
   

Just like the welfare state provides an incentive to stay at home and not bother trying to get a low paid job,

That is true, but is more than balanced by the opportunities it gives the less fortunate to develope their abilities and be productive.

You can easily find figures that show positive correlation between tax cuts and increased amounts of income tax going to the state.

In all third world coutries, the very rich are effectively not taxed at all, the poor really live in pure and unrestrained capitalistic competition that is not distorted by welfare, and the wage differential is way bigger than in the industrialised world. so why are these countries so poor?

 

[borderpolice]

Not objective - I'm a libertarian! I say that the market would give a fairer valuation than the government, based on the intersection of supply and demand.

I know that, but that just beggs the question. You said:

In order to pay these people the money they actually deserve, we would have to liberalise their industries.

Hence what you are saying really is this: What people deserve is what "the intersection of supply and demand" pays them. So you in effect equate one's due with one's factual income, aka Norms = facts.

Why should "the intersection of supply and demand" give a good or even reasonable criterion for what somebody should earn?

Moreover, when you say: "the market would give a fairer valuation than the government, based on the intersection of supply and demand" then you are stipulating an objective criterion of fairness otherwise you would not be able to say that the market is fairer than whatever else you have in mind. so what is this objective criterion according to which the market makes these fairer decisions?

 

[vimothy]

If there is the possibility of taking money somewhere else, it is nto really taxed off.

Some take it off-shore (I think Bono does), but like I said, in the US (for e.g.) the top 20 percent of income earners pay 80 percent of total federal income taxes. The rich pay a lot of tax already.

tax structure can be such that there is some wage differentiation but not too much.

But that's bad on a moral level and bad on an economic level.

In primary school I wanted to be the best pupil, despite there being only six degrees of differentiation. And countries like japan, or scandinavia prove pretty convincingly that you can have powerful economies (with less absolute poverty) despite smaller wage differentials than in the libertarian ideal. Dont forget: tax structure can be such that there is some wage differentiation but not too much.

Scandanavian economies are hardly what I would call "powerful". As I think I've already noted, if Sweden were a US state, it would be the poorest in the Union. If it were an ethnic group in the US, it would be at the very bottom.

Moreover, unrestrained libertarianism does not provide the poor with real incentives to be productive, because they are so preoccupied with the struggle for survival that they cannot develop their abilities.

Not so - no one needs to fight to survive. We have a labour shortage due to our aging populations. There is plenty of work for those that want it.

There are not enough rich in the world. The real bulk of taxes always comes from the middle classes. Hence, if you want to really increase the wealth of a society, you need to broaden that group.

Well, I agree with that. Let everyone make money!

That is true, but is more than balanced by the opportunities it gives the less fortunate to develope their abilities and be productive.

It doesn't give anyone opportunities, it just perpetuates Britain's moronic class structure. It's why social mobility is so poor in this country.

In all third world coutries, the very rich are effectively not taxed at all, and the wage differential is way bigger than in the industrialised world. so why are these countries so poor?

The Mystery of Capital