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Economics question: How much is healthy for the 1%?

The question sort of becomes how much excess wealth do you need to have in order to easily manipulate politics, corner markets, and do all the undesirable things normally associated with wealth concentration. I can't think of an easy way to test that empirically.
 
We now live in a world where 1% of the population control 50% of the wealth. (in the USA its more like 40%) Most wise people consider this to be too much.

So my question is: What is the healthy amount for the richest to control? And why?

A good place to start might be to look back to a period of great economic growth and see how much wealth the 1% controlled then.

I lived through the Nixon wage and price control period. So did our entire society at the time. While that was not a major redistribution of wealth it was a bit of an exercise in futility. Economic growth also was claimed during the bubble economies in the 80's and 90's. They were illusions.

Also, lets say again there is a maximum a person can control of $1,000,000, what happens to a person who resides in a $40 million dollar home? or owns a small cap factory? There are implications at every turn in the road.
 
I also would caution that economic growth is not necessarily all we are looking for. If the economy grows 10% and all that 10% vanishes into a few people's pockets, with no other positive change to be found, is there any value to that 10% growth? (not really a hypothetical question, is it?)
 
We now live in a world where 1% of the population control 50% of the wealth. (in the USA its more like 40%) Most wise people consider this to be too much.

So my question is: What is the healthy amount for the richest to control? And why?

A good place to start might be to look back to a period of great economic growth and see how much wealth the 1% controlled then.

1860 to 1900 is the 40 year period generally agreed to be the period with the fastest economic growth in the history of the country.
 
I suspect the change should lie in INCOME CONTROL...ie. taxation rather than absolute wealth confiscation. During part of the Roosevelt administration, personal incomes were capped at $100 K. We and the fantastically wealthy survived that.:thinking:
 
So my question is: What is the healthy amount for the richest to control? And why?

Seems the overall tenor of posts here are on control and principles.

In order to determine what is a healthy amount for the richest (in whatever dimension one chooses) to control. One must determine control and what determines how it is measured. I'd use this to get at principles since determination of how wealth is measured depends on this society values and that depends on what is important to the society.

Now this is going to get a bit of a convoluted journey because we need to build structures before we can determine what is wealth,how it is used, and what is that amount of it that tips good to bad.

My first concern is how we come to resolution of what is wealth since this is the lynch pin of the entire issue. For me anything planned from the top has to fail because it's view is likely to be from near the top of the wealth dimension. Such a view has to focus on material wealth rather than social wealth which is a shame. Social wealth can be invested in everybody whilst material wealth depends on external means for control and acquisition.

I prefer principles base in the person rather in any institution. The problem then is coming to some sort of understanding and consensus by most on what are the personal social principles and how they play into a governing mix.

Oops I just got ahead of myself by positing a governing mix. So lets consider that first. If the person is the focus then the person must be the instrument through which governing and change is decided meaning some sort of democratic governance. That established I'll get back to what I think are relevant personal social principles.

Responsibility for oneself and consideration of others is critical. With out responsibility there can be no governance since there is nothing to back decision. The degree of self responsibility, it seems to me, must include living and safety at least. The degree of personal consideration for things including others will fill the spaces between elements of personal social wealth. By that I mean when one understands what one means by self responsibility for life and safety.

Ones life in a society must start with persons taking responsibility for how and why they live and stay safe and for pursuing and caring for ones desires for life and safety. These operators, protecting and nourishing one's life and securing one's life in the presence of others, become the basis for metrics of personal self responsibility. One can measure how one goes about protecting and nourishing oneself thereby constructing the first element of a wealth measurement system.

Rather that construct the entire model which will take way more than anyone has time to read,much less digest, I'm going to concentrate on measuring one's wealth in life responsibility only. Such takes into account things like trust of others, self assertion, respecting others, and integration of one's responsibility with others in one's society.

For me one's wealth is satisfactory if one needn't think about personal safety. This is so because one can trust that others will respect one's personal responsibilities and in turn they can respect their own personal responsibility will not be diminished. Something like my freedom to do as I please ends when I touch another. One can extend personal responsibility to sustenance, movement, accumulation of material wealth, power, etc.

Most of what governments and individuals do today in modern democracies routinely take away ones responsibility for oneself and intrudes one upon others. I find not allowing one to be responsible for oneself is a major flaw in these governments. This flaw reflects a lack of trust by others that one can make good decisions, that one has had a good education, or that one can make even the most limited decisions with respect to their commerce with others. I'm pushing back with responsibility demands against failure of groups to trust individuals to do the right thing.

Too much.

yeah.
 
I think what fromderinside is saying is that about $10,000,000 in controlled wealth is good enough. Anything above that should be punitively taxed and invested back into society.
 
I think what fromderinside is saying is that about $10,000,000 in controlled wealth is good enough. Anything above that should be punitively taxed and invested back into society.

arkirk says $100,000 (income) cap is good enough.
 
Versus what cure?

Brugge1862.JPG

This set France back decades.
 
There is no magic number.

120914-oecd-findings.jpg




The findings show that the biggest issue is when the gap between the bottom 40% and the rest is especially large, and finds this as the reason:

The evidence is strongly in favour of one
particular theory for how inequality affects
growth: by hindering human capital
accumulation income inequality undermines
education opportunities for disadvantaged
individuals, lowering social mobility and
hampering skills development.

http://www.oecd.org/els/soc/Focus-Inequality-and-Growth-2014.pdf

Sorry, but they rigged their health stats to support UHC.
 
There is no magic number.

120914-oecd-findings.jpg




The findings show that the biggest issue is when the gap between the bottom 40% and the rest is especially large, and finds this as the reason:



http://www.oecd.org/els/soc/Focus-Inequality-and-Growth-2014.pdf

Sorry, but they rigged their health stats to support UHC.

What? This was about the relationship between income inequality and economic growth. Unless you are saying that the UHC benefit was included in income? Where did you see that part?
 
There is no magic number.

120914-oecd-findings.jpg




The findings show that the biggest issue is when the gap between the bottom 40% and the rest is especially large, and finds this as the reason:

The evidence is strongly in favour of one
particular theory for how inequality affects
growth: by hindering human capital
accumulation income inequality undermines
education opportunities for disadvantaged
individuals, lowering social mobility and
hampering skills development.

http://www.oecd.org/els/soc/Focus-Inequality-and-Growth-2014.pdf
That's bullshit becuase it's opposite - lack of growth cause inequality.
 
That's bullshit becuase it's opposite - lack of growth cause inequality.

Not at all, a stable economy is able to provide all the needs of a stable population. Just a matter of ratio.

What society values, entertainment, etc, which generates huge revenues, and incomes are structured, executive pay scales, bonuses, and so on, are some of the main contributors to inequity in wealth distribution.
 
Sorry, but they rigged their health stats to support UHC.

What? This was about the relationship between income inequality and economic growth. Unless you are saying that the UHC benefit was included in income? Where did you see that part?

I'm saying they rigged the UHC rankings (20% of the raking is "fairness"--defined as UHC) which means I don't trust other ratings they produce.
 
How much is healthy for the 1%?

There shouldn't be a 1% of the population with a large percentage of the worlds wealth in their hands if we are ever to build a fair and equitable society. High income earners salary capped at $500k and personal wealth of twenty million seems reasonable enough.
 
Well, what is the purpose of wealth inequality?

The main driver appears to be some sense that people will only strive if they are rewarded in some way - wealth as a motivator. But how much wealth do we really need to motivate people? Do we need to raise the pay of a Car company chairman from 9 million dollars a year to 11 million dollars a year, in order to make him feel excited about coming into the office? Why does a miuch smaller increase motivate the janitorial staff? Is it really 'harder' to be a middle manager than a nuclear physicist, and if not, then why do we pay the middle manager more?

We have this weird spiral whereby some items, such as property, dimanonds, and race horses, cost more simply because rich people buy them. The price is set at what they can afford, and their pay is set so that they can afford them.

One idea might be to take our cue from business. Here a great deal of time and energy is spent keeping wages low. If it's good to limit the income of the workers, for the sake of the company, then it must equally be good to limit the income of the owners, for the sake of the economy. So you remove wages from market forces entirely and set them as a proportion of GDP. By all means give a bonus to people who do particularly well, and by all means have payment bands which can rise and lower depending on how short of staff a particular job is. But in general we do what companies do - work how much we can spend on wages, and set that as a budget. There's no reason to have the differences more than it takes to have people 'feel' the difference - 15% or 20% between the top and bottom paid should be ample.

What we need to get rid of is the idea of wages as being a sign of social status or inherent worth. As long as they are pegged to esteem, we'll never get rid of inequality.
 
A good place to start might be to look back to a period of great economic growth and see how much wealth the 1% controlled then.

1860 to 1900 is the 40 year period generally agreed to be the period with the fastest economic growth in the history of the country.

Yeah! That was the period when the U.S. murdered off all the Indians an took their lands and pushed them onto reservations...out of the mainstream. Bright idea!
 
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