The easiest way to show someone getting rich at someone else's expense, is to show that from a certain enterprise, in which there are many actors, one person gets very very rich, and everyone else does not.
Huh?!? How are you getting that? Suppose you invent a way to help would-be buyers and sellers find each other, and you thereby cause ten million sales to take place that otherwise wouldn't have, each seller selling something for $100 that's worth $80 to him and $110 to the buyers, and you receive a 10% commission on each sale. There are 20,000,001 actors;
Only if you managed to design, implement, market, advertise and finish this 'way' with no employees, no capital, no exchange of ideas, no infrastructure, in a vacuum, from your orbital space station.
It's a thought-experiment. It's simplified in order to clarify the issues involved. If you aren't prepared to reason about such scenarios you might as well abandon reasoning altogether and judge each situation by gut feeling with no attempt to ever apply any general principle. (And if it's that important to you that the scenario be possible exactly as stated, then suppose what you invent is a piece of shareware you wrote by yourself on your own PC in your own apartment, that you posted the source code to on download.com, that spread from one P2P site to another advertised by word of satisfied users' mouths, that the buyers and sellers ran on their computers to make contact with each other. The sellers all paypaled you the commissions on the honor system, as specified in the shareware license you included.)
So you make $100,000,000 and the other 20,000,000 actors each wind up $10 better off. There's $30 of net benefit from each trade, split equally among the buyer, seller and inventor. Would you call that "the inventor getting $10 at the expense of the buyer and seller" even though they both came out $10 ahead on the arrangement?
Do you have evidence for the other participants in the processes that made those rich people rich "getting none"? Or are you using "getting none" as a hyperbolic way of saying "getting less"?
If one child gets all the cookies, and the other children get only crumbs, does that change anything?
Of course. The other participants contributed; that implies they had costs, in time if nothing else. If they received nothing then the conclusion that their costs exceeded their payoff is an valid deduction. But if they received crumbs, then whether their costs exceeded their payoff becomes an empirical question and when you claim the enrichment was at their expense you have to supply evidence.
(No doubt your immediate reaction is that crumbs aren't enough to exceed much of anything; but keep in mind that cookies are a metaphor -- the actual topic scaled down a million times -- so you have to scale the other participants' costs down a million times too.)
Bomb#20 said:
Ksen has a tendency to indulge his hostility by saying things about rich people that aren't actually true.
Can you give an example?
Ksen talks about rich people the way antisemites talk about Jews. He says the 1% may very well destroy us all. He says he's pretty sure the children of the 1% are born with jobs. He says the wealthy are fully engaged in class warfare while trying to convince everyone there is no such thing. He say it's the 1% against everyone else.
Suppose a guy expected that Israel will bomb Iran, that the ensuing conflict will go nuclear, that America and Russia will let themselves get sucked into it, and that we'll all freeze to death in nuclear winter. Suppose he expressed this expectation by saying "The Jews may very well destroy us all.". Would you regard him as telling the truth about the Jews?
Bomb#20 said:
I am happy to applaud anyone who makes himself and those around him rich. I am not happy to applaud those who get rich while those working with them do not.
What you do or don't applaud has no bearing on whether profit for the one who gets rich means a loss for someone else -- on whether he got rich by genuine wealth creation or simply extracting money from other people. For that, the criterion is not whether the other people got rich too but whether they got better or worse off than they'd have been without him.
No, it isn't. Otherwise we can have one guy getting all the money, and everyone else getting 1 cent, and that's just as good as one guy getting a cent, and everyone else splitting the money between them. Given that everyone is contributing to a joint enterprise (i.e. a cost), there has to be some level of division of the spoils that isn't appropriate. The criteria you suggest doesn't make the distinction you're arguing for.
I don't think you understand what distinction I'm arguing for. I'm addressing the dispassionate matter of whether wealth was created or simply extracted. I didn't offer any moral judgments, and yet you reply with "just as good" and "isn't appropriate"?!? This is the sort of claim that makes you look like you're seeing the economy as a morality play. You're making "ought" to "is" inferences. You're in effect reasoning as follows:
(1) It's inappropriate to get rich by extracting somebody else's wealth.
(2) One guy getting vastly more than the other is inappropriate.
Therefore (3) one guy getting vastly more than the other is extracting his wealth.
That's an invalid chain of reasoning. There could be other reasons for a given split to be inappropriate besides it being an extraction of wealth. Maybe a 10,000-1 ratio is just plain unfair. But that moral judgment doesn't magically turn an income into an expense. You can recognize extraction and expense by whether the guy has a negative number on his bottom line for the activity. That criterion makes exactly the distinction I'm arguing for. You appear to be imagining me to be arguing for a different distinction: to be arguing that the observed ratio is good and appropriate. But I'm not making moral claims here. That's all on you and ksen.
Can you explain how a collection of people involved in an enterprise to create wealth could end up with vast disparity of such wealth without some form of wealth extraction?
Assuming you recognize that the economy isn't a zero-sum game and that the Labor Theory of Value is a steaming pile of metaphysical drivel, where's the difficulty? Suppose somebody figures out that the existing pattern of ownership of property is Pareto-sub-optimal by at least $400 million and there's a way to rearrange which rich people own which expensive assets in such a way that a hundred rich people are all better off by $4 million apiece on average. Suppose he and ten of his friends write up a contract agreeing that they will each do assigned parts in a plan to persuade those hundred rich people to trade their assets with one another into the new configuration, in return for $300 million. Suppose the contract specifies a formula for how that payment will be divided among the eleven. They carry out the plan, $400 million of wealth gets created, $300 million gets paid for it, and, based on who did what, the contract specifies that ten guys get $1 million each and one guy gets $290 million.
So which person who became a million dollars better off as a result of this business deal am I supposed to believe wealth was extracted from?
If all the rewards of a joint enterprise go to one person alone, that's enough to be a problem,
Why on earth would you imagine that the level of income/wealth inequality in the threads I cited resulted from joint enterprises in which all the rewards went to one person alone?
They don't need to go to one person alone. The disparity is the point, and the subject of the posts under discussion.
Indeed it is. So does that mean you're changing your argument from "If all the rewards of a joint enterprise go to one person alone, that's enough to be a problem" to "If there's a big enough disparity, that's enough to be a problem"? If so, then how do you figure that supports your contention?
You and I weren't arguing about whether inequality is
a problem. You and I were arguing about whether ksen's "What level of income/wealth inequality is ideal" OP was about people enriching themselves
at the expense of others. I know you and he agree that it's a problem; that's your and his moral judgment and that's not what I'm disputing; but it being a problem does not imply that that wealth wasn't created and was instead extracted at someone else's expense. You appear to be making another "ought" to "is" jump.
Bomb#20 said:
These people generally got rich from joint enterprises with other voluntary participants. Why would those other people have participated if they weren't getting any of the rewards?
There could be any number of reasons, from desperation through to boredom. I'm not sure how this is relevent?
If it's boredom, then they're getting a reward -- an experience they find interesting -- that they value more than the time they're giving up by participating. Participating out of desperation usually means being desperate for a paycheck, which therefore also means the guy is getting a reward. So unless you're suggesting that the guy got rich by
making the other participants desperate, by
threatening them, your proposals don't support your contention. The reason this is relevant is because saying all the rewards of a joint enterprise go to one person alone is an
extraordinary claim.
... as though B extracting less of A's wealth than B wants to extract were the same thing as A extracting wealth from B.
If society is so arranged that B gets more than A, then society can be arranged so that A gets more and B gets less through taxation. I see no problem with seeing those as equivalent.
But those who don't see them as equivalent aren't wrong? I.e., you see the "extract" concept as purely subjective?
I'd also point out that, in your own posts, you are no more or less assuming a definition of the origin than I am.
Well, I'm assuming that "extract" has its common-usage English language meaning, yes. You appear to be applying the Humpty-Dumpty theory of natural language semantics. To my mind, if you ground up some gold, mixed it with some gold ore, heated the mix until it melted, and let it solidify into a rock with higher gold content than the original ore, and then you described what you'd done as "extracting gold from the ore", you would be in error. To your mind, you'd be expressing an equally valid point of view, where what you did counted as extraction because you'd mixed in less gold than the amount you arbitrarily decided was the origin of your gold axis?
Do you want me to believe that A, who has to work four days a month on the king's corvee, is extracting wealth from B, who only has to put in two days a month but still bitches about A not doing his fair share?
Of course not, but it is disingenuous of you put that up as an example when you're not suggesting any measure based on days of effort. You're surely not suggesting that the guy who earns $20 worked one day a week, and the guy who earned $100 million worked 5 million days a week? Why make a comparison you know to be false?
If you're trying to get me to change my mind about you being interested in serious discussion, that's as good a way to do it as any. Have I been wasting my time trying to reason with you? Do you only participate in this forum in order to slander your opponents enough to give yourself permission to dismiss their arguments without thinking about them? If that's the case, say so now and I'll go find a different religious zealot to try to deprogram.
I understand that what I wrote seems unreasonable to you; and I understand you aren't prepared to seriously entertain the possibility that the reason it seems unreasonable to you is because you've made an error -- like most people, you appear to reserve critical thought for other people's opinions. So, as a second best solution, might I humbly recommend that you NOT go into a discussion taking for granted that the other person already knows you're right, and that you NOT assume if he says something you disagree with he's a liar who's just being a dick about admitting you're right, and assume instead that when you encounter a person who says something that seems unreasonable to you it's because he's an idiot. That way you can have a substantive discussion of why you think what he said is idiotic, and then he can explain what error he thinks you've made.
No, I did not make a comparison I know to be false. That comparison is spot on. So if you really are interested in serious discusson, go ahead, tell me why I'm an idiot. What trivial bit of reasoning do you have in mind that should have gotten me from the obviously correct premise "You're surely not suggesting that the guy who earns $20 worked one day a week, and the guy who earned $100 million worked 5 million days a week" to the apparently absurd conclusion that it would be idiotic for me to be "suggesting any measure based on days of effort"? Why do you feel there's something wrong with an analogy between a guy who pays $20 million in taxes on earnings of $100 million, and working for the king four days out of four five-day weeks? Why do you feel there's something wrong with an analogy between a guy who pays $5000 in taxes on earnings of $50,000, and working for the king two days out of four five-day weeks? Because their daily incomes are different? So what? Where the hell do you get the theory that I don't get to measure taxes based on days of effort unless I make believe that a day of one guy's effort is equivalent to the same number of dollars as a day of another guy's effort? Back when corvee was a standard method of taxation, do you think every subject accomplished as much for the king in a day's work as every other subject?
Then tell me, is "who is extracting wealth from whom" a subjective matter or an objective matter? If it's subjective, then why should anyone change his mind based on your opinion?
Depends on the other person. Showing that their opinion involves violating their own principles and values is generally a tried and tested method. That's why I asked about the examples of the child with the cookies, and presumably why you've consistently refused to give me an answer. Because you are suspicious that I might use such an example to demonstrate that you're being inconsistent in your thinking.
Oh for pete's sake! I'm being inconsistent with
your thinking! What the bejesus principle do you think
I have that I'm being inconsistent with? You've been making ridiculous cookie analogies and I've been pointing out reasons they don't fit what we're talking about instead of going along with the fiction that they're good analogies and thereby handing you rhetorical victories you haven't earned. But if you're going to try to turn that into a rhetorical victory you haven't earned too, fine, we'll revisit the cookies.
It's the same way, when children are eating cookies, one child getting all the cookies and everyone else getting none implies some kind of power disparity between them.
On what planet would it imply any such thing? What it most likely implies is that one parent sent her child to school with cookies in his lunch and the other parents didn't.
Again, if one kid gets all the cookies, and none of the others get any, is he being enterprising and thrifty, or just a greedy bully?
Who's making the cookies in this scenario? If a child makes himself some cookies and takes them to school in his lunch and eats them, he's being enterprising. If the other children see them and come take them away and eat them without his consent, they're being greedy bullies. If his mother makes the cookies and puts them in his lunch, and he eats them, he's neither enterprising nor a bully, just one lucky kid. If the cookies are made by Keebler Elves and brought in by the teacher, then what are the teacher's criteria for who gets to eat them? Are they to be shared? Then if one kid eats them all he's a greedy bully. Are they rewards for winning contests? Then does the kid who eats them all eat them all because he grabs them from all the winners or because he wins all the contests? If the former, then he's a greedy bully. If the latter, then he's enterprising, and if the other kids demand the cookies then they're greedy bullies. So what makes you imagine you included enough information in your scenario for it to have a generalized answer? You appear to be treating children's cookies as the same leftish morality play you treat a whole economy as.
So what inconsistency in my thinking do you feel the above answers reveal?
If it's objective, then give an objective criterion, i.e., a criterion that doesn't depend on how much somebody wants somebody else to contribute.
Fair enough - do you subscribe to the idea that paying some people more than others is a useful feature of society because it acts as a motivation?
You say that as though this is an active choice by society rather than something that just happens spontaneously. You might as well ask if having some people with longer hair than others is a useful feature of society. I'll answer instead about the policy of not actively preventing people from being paid more than others; let me know if that doesn't adequately capture your intent.
So clarify. Useful to whom? There are some people it isn't useful to at all -- mostly people who would join the ruling party and rise to positions of great power over others in a society where everyone was paid the same. For the rest of us, the practice of not preventing people from being paid more than others is a useful feature of society for a variety of reasons. That such a policy would demotivate people is one of those reasons, yes.
What do you suppose happens to that effect when the gaps between the richest and poorest get too large?
I'm not following. The motivating effect comes from the difference between what you'll be paid if you do your job well or poorly, if you learn new skills or don't, if you consume your whole paycheck or invest part of it, and so forth. It's localized to your own situation. Why would the global circumstance that another guy is paid a hundred times more than you and some third person is paid a hundred times less than you change your own incentives?
Do you agree that rewards should be distributed evenly unless there is reason to do otherwise, and if not what principle do you believe to be more important?
Huh? There's always a reason for whatever reward anyone receives. How could there be no reason? What are you opposing here, the policy of opening Shroedinger's wage box and letting the collapse of the quantum wave function control what each person is paid?
If you mean, do I think rewards should be equal unless there's a
good reason for them not to be, "good" according to what criterion? Do you mean good according to
me? Sure, two people should get the same unless I think one should get more; likewise, one should get more unless I think they should get the same. Everyone should always do what I think is right. That's pretty much what it means to think something is right. Do you feel this has any implications other than that humans are naturally judgmental?
Why is it, do you suppose, that giving one child all the cookies than leaving the rest with crumbs is not seen as a good idea?
Um, because people nake hasty generalizations and think in stereotypes, so they imagine some scenario in which giving one child all the cookies would be unfair, and then evaluate whatever real world situation they're faced with by ignoring its complexity and the factors that make it different from their imagined scenario. Sometimes giving one child all the cookies is a good idea and sometimes it isn't. And sometimes that question doesn't even come up, because the cookies aren't yours to give, so it's a question not of giving the cookies but of taking them.
The fact that he is being awarded 290 million dollars and other people are not, from the same joint enterprise, means that the income from their enterprise is going to him and not to them. Why is that not a problem? Can you explain?
Your mathematical reasoning puzzles me. You don't know how much the total income from their enterprise is, do you? You don't know how many other people were in the enterprise, do you? Then how could you possibly deduce that "the income" is "going to him and not to them"? How do you know they didn't jointly make 2.9 billion dollars, which would mean only 10% of the income is going to him and 90% is going to them?
Why would that matter? I'm trying to work out what value there could be in one person being paid millions of times more than another. Does he need the extra money for something?
Probably not. Why would that matter? We're talking about whether the income disparity
is a problem. What does "what value there could be" have to do with that? I don't see how there could be any value in girls getting ankle tattoos, but that doesn't make them a problem. Do you regard it as a problem when other people do stuff you don't value?
(Or perhaps you're not talking about how little you value one person being paid millions of times more than another. Are you suggesting that value is objective? That a situation where A is paid X and B is paid Y has some factual value, entirely apart from how much some person values that situation? If that's what you have in mind, that sounds metaphysical. Can you explain how the objective value of a situation is observable?)
I'd also like to know what part of my position you see as a 'morality play', with examples please.
Any time you draw inferences about what the economy does from moral judgments about what it ought to do, you are force-fitting it into a script. When you analogize the economy to one child getting all the cookies, that's a morality play. When you infer from unequal rewards that one person's gain is at someone else's expense, that's a morality play. When you say the guy paying the most tax is "extracting from others" because you think the excess he pays over what others have to pay ought to be even more than it is, that's a morality play.
Assuming we accept the premise that the guy with $290 million has too much money because inequality is immoral so he should have to give most of it away, why the devil should the people he has to give it away to be Americans?
It depends on whether you're arguing your position based on a priori morality, as you seem to be doing, with your references to religious groups, sin, and abstract moral laws, or whether you support your position on practical grounds, as I tend to do.
You mean there's some practical benefit to equalizing income within a society that doesn't follow from equalizing income worldwide? A practical benefit
to whom? If you mean that's practically beneficial to poor Americans, yes, it is. Is there a reason policy ought to be based on what's best for that subset of humanity?
The main reason the richest .01% are growing their wealth so much faster than the $29,000 folks are is that so many of them have taken up jointly making cookies with poor Chinese instead of with middle-income Americans.
Well, let's be accurate. They don't typically
make cookies with the Chinese. In many cases they do nothing other than seek rent for the capital they provide to the Chinese, and exercise power over who ends up with what cookies.
What makes you think the rent seeking and the power over who ends up with what doesn't help the Chinese make stuff? "Leftish" economic beliefs are the world's biggest cargo cult. You guys tried getting rid of the capitalists and prosperity plummeted. But that didn't make you question your faith. You all went right on thinking that when you're trying to replicate the success of capitalist production, the stuff will still get produced provided you include each element of the production system
for which you can see why that element matters. That's pretty much the same thinking that led the Melanesians after WWII to build runways and control towers and wooden radios, so that American airplanes full of cargo would keep on coming. Do you guys ever spend ten seconds contemplating the hypothesis that there's something going on that you don't understand?
Actually, according to your figures, some people are getting 14.5 cookies, with others are getting one millionth of a cookie each (290million to 20=14.5million to 1). At which point the suggestion that most people need more cookie than that, while the person with 145 is going to struggle to eat even a fraction of that amount, comes more sharply into focus.
Quite right. So focus. Are you arguing for redistribution on the grounds that the guy with the $290 million extracted the wealth instead of creating it and got it at the expense of others, or on the grounds that he has it and other people need it? Or are you arguing that those are the same argument, inferring that he got it at their expense because they need it more than he does? If that's what you're arguing, that's a morality play.
The human inequality index has dropped to about its lowest level in human history,
Which figures are you relying on for that please?
Sorry, I don't have a link to the chart I saw. But the arithmetic is pretty obvious -- you can't make a billion of the world's poorest people ten times as rich without it resulting in a massive drop in the GINI coefficient.
Here's an article on the phenomenon.
Well, what difference does it make which society a person is a member of? What the heck is supposed to be so morally superior about tribalism?
Tribalism is often considered morally superior to individual greed.
Indeed it is. The question is, why? If you refused the 300,000 pound first offer for your house and instead sell it to the guy offering 250,000 pounds, because the first buyer was black and the second one is white and you live in an all-white neighborhood and having a black family move in will upset your neighbors and reduce the market prices of their homes, and you're putting loyalty to your fellow white people above maximizing your own profit on the sale, then sure, your neighbors will probably consider that you made the morally superior choice. Well, did you?
If you're going to insist that resources be equalised on a global basis, then I shan't stop you, but I suspect you're just trying to build a smokescreen here.
And those are the only two possibilities that occur to you, are they? That's a morality play too -- now it's me you're trying to force-fit into a script. I am arguing against equalization on any basis. And I'm doing it by blowing away the smokescreen of hypocrisy built by people who want equalization of resources on a within-nation basis. Maybe when they realize equalization doesn't actually benefit the people they want to benefit they'll get past the facile "thinking" that made them believe in equalization in the first place.
