[HN Gopher] Adam Smith didn't accept inequality as a necessary t...
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Adam Smith didn't accept inequality as a necessary trade-off for a
rich economy
Author : paulpauper
Score : 49 points
Date : 2021-09-12 21:07 UTC (1 hours ago)
(HTM) web link (blogs.lse.ac.uk)
(TXT) w3m dump (blogs.lse.ac.uk)
| 1cvmask wrote:
| The biggest reason we have mass inequality in America is low
| interst rates (leading to an asset bubble), the Covid wealth
| transfer to the rich (including free government subsidies and
| handouts), and mass immigration of low skilled people which
| increases competition and diminishes the earnings at the bottom
| end (although it benefits the rich who hire maids and employers
| like restaurants).
|
| For other developed countries there multi-generational rich like
| the Wallenbergs and Ikea of Sweden. My guess is they are much
| wealthier as percent of GDP than America than American oligarchs.
| However the total 1% in the US is slightly more:
|
| https://www.economist.com/business/2016/03/10/a-nordic-pyram...
|
| "Credit Suisse, in its annual report on global wealth in October,
| pointed to findings that the richest 1% of Swedish households
| control 24% of the population's total wealth, making it only a
| bit less unequal than India (25.7%). In contrast, Spain's 1%
| control 16.5% of the wealth, and Japan's only 4.3%."
| lotsofpulp wrote:
| What about all the cheaper labor in other countries with more
| lax environmental and labor laws, not to mention being cheaper
| simply due to being further back on the development timeline?
| And automation obviating roles quicker than people can or are
| willing to be retrained to more in demand roles?
| pessimizer wrote:
| > The biggest reason we have mass inequality in America is low
| interst rates (leading to an asset bubble), the Covid wealth
| transfer to the rich (including free government subsidies and
| handouts), and mass immigration of low skilled people which
| increases competition and diminishes the earnings at the bottom
| end (although it benefits the rich who hire maids and employers
| like restaurants).
|
| Mass inequality predates all of these things by a significant
| amount of time. Covid is like 2 years old, and low interest
| rates like 15. Mass immigration of low-skilled people is
| something that's happened throughout the entire lifespan of the
| US, although I don't know that you're specifically talking
| about the US. There's no time of a lack of low-skilled
| immigration to compare to. If you're American, and not a native
| or the descendant of a slave, you are 98% likely the result of
| low-skilled immigration.
| WalterBright wrote:
| Nobody has ever succeeded in having a rich economy without
| inequality, though many countries have tried it.
|
| For just one example, SpaceX would not exist without inequality.
| Nor that supercomputer in your pocket.
| [deleted]
| protoman3000 wrote:
| Nobody has ever succeeded proving an all-quantified statement
| by showing only one example.
| [deleted]
| sjburt wrote:
| On the contrary, GINI vs per capita GDP show a negative
| correlation (really, more of an L shape with the US as an
| outlier). The US is the only country with a GINI over .4 and a
| per-capita GDP over $35k.
|
| https://www.businessinsider.com/goldman-sachs-chart-shows-us...
|
| Much of Western Europe has similar GDP per-capita and much less
| inequality.
| bjornsing wrote:
| > Much of Western Europe has similar GDP per-capita and much
| less inequality.
|
| And also no SpaceX.
| pessimizer wrote:
| Other countries aren't smart enough to run up a massive and
| increasing trade deficit, year after year, forever and ever,
| amen.
| throw0101a wrote:
| Further, the more inequality exists (>GINI), the less social
| mobility there seems to be:
|
| * https://en.wikipedia.org/wiki/Great_Gatsby_curve
| ZeroGravitas wrote:
| Which countries tried it? I'm struggling to think of one, never
| mind "many".
| temp8964 wrote:
| Most of those discussions are not quantifiable, not following
| restrict logical, so they can easily dilute to playing word
| games.
|
| For example: "Wages are not the simple product of supply and
| demand in Smith; bargaining asymmetries are key." -- "key"? How
| is this key? If bargaining asymmetries are the key, why not low
| skill workers get paid $1million and the management get paid $1k
| instead, since workers are out numbers and they can easily win
| the bargaining fight? Of course, supply and demand is the key,
| and bargaining is simply a side factor.
|
| The whole article does not have a clear methodology, totally
| driven by the author's perdetemined conclusion, just picking
| arguments from here and there. Seem useless to me.
| pclmulqdq wrote:
| Adam Smith also believed in a society where rich people would
| endow institutions for everyone to enjoy. Now that we believe
| that is solely the rule of the state, that assumption is gone.
| rubyist5eva wrote:
| um...no?
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