This is very well covered by Henry Hazlitt. You can’t just look at cases where a laborer was entirely replaced by a piece of capital. You have to look at the laborer who was employed in making that piece of capital. You have to look at the goods made available by it (most of them consumed by, you guessed it, laborers). And above all you have to look at all the innumerable cases where capital has improved the productivity of laborers instead of replacing them.

Otherwise you’re just pining away for a return to 1720. No one had to worry then about the menace of capital crowding out labor.

Who can’t what? I don’t understand what you’re responding to.

“Capital generates capital, and it’s crushing wages.”

Economic and technological progress change the relative values of things. If it many times twice as much to produce a widget as a whatzit, and someone comes up with a technique for manufacturing widgets so that they cost only a fraction as much as a whatzit, then someone who used to be able to buy several whatzits for each widget he produced will no longer be able to do so. On the other hand, many people will be able to afford a lot more widgets than they otherwise would. Since technological and economic progress occur in many fields, even people whose field of industry has had wages depressed by technological progress in that field, such loss would be offset by the fact that progress in other fields will reduce the costs of many of the other things that person would buy.

The biggest problem is that much of the wealth which is generated is gobbled up by governments, who then redistribute it in ways which are fundamentally destructive. Offering to support people as long as they refrain from trying to escape poverty is fundamentally evil, but that’s what the Dependency Party wants to do. Punish productive people, and reward only those who accept dependence.

“Nobody else has challenged the notion of wealth inequality as a problem.”

You’ve got it wrong on two counts. A couple of people certainly did challenge that notion. But more importantly, it’s the burden of your side to explain why such inequality is a problem in the first place.

You can’t just start with “inequality of wealth is bad because it involves inequality of wealth, which of course is bad.”

Basically, all the decent (and most of the other) Universities are charging £9k/year tuition to domestic students. Up from 3.3k. And the interest rates are increasing by 4-5% per year.

The UK average graduate premium is ~£2,250 per year. VERY low. Students will be coming away with £40k+ in debt (as you have to add living costs on top of the tuition)…that’s over DOUBLE the US average! And you have a MUCH bigger graduate premium!

@25 – Except they can’t. Over three million people in this country (the UK) have stopped or cut down by over 90% on their electricity in the last five years. A million for gas, but that’s now rising rapidly too. Capital generates capital, and it’s crushing wages.

@29 – And it’s now driving millions in more expensive countries into poverty. As in, not being able to eat properly and afford utilities and rent.

Not only that, but some it’s no secret that some politicians want to steal the wealth of those who save for retirement, if they can figure out a way to do so. I wish people would wake up to the fact that the country can only survive if people save for retirement, and that will only happen if they can be confident that any politicians who try to steal their wealth will be tarred and feathered.

rather than a remark she made that everyone concedes the literal truth of.

In economics, such things only exist as perceptions. It is in challenging these ideas that produce major advances in humanity. Challenge the fallacy that wealth disparity is some horrible monster to be managed away.

Building off what Other Sean wrote above, one of the best friends the poor could have is deflation. But the US has clearly stated they will do whatever is needed to ensure there is only inflation–as anyone massively in debt would do. Lots of bubble baths ahead.

Another thing to consider: with interest rates at or under the level of inflation, there’s really no incentive for lower income households to maintain any kind of positive net worth.

The value of current consumption is always higher than the value of future consumption, unless some premium is added to the latter. Right now there is no such premium. People get nothing in return for their savings; in fact they suffer a risk of devaluation that increases with every moment they delay the decision to spend.

So isn’t it simply rational for them to buy more now, and leave the business of worrying about the Walton fortune to someone else.

By the way…none of this is even an accident. It’s a stated goal of government policy to drive up consumer spending by creating incentives to borrow and splurge (a goal and a policy you can be sure Amy Goodman wholly supports).

“I don’t have time to educate you on the number of ways…”

Ah but isn’t that what guys always say when they punk out from a fight. I notice you did still have time to throw out 100 words worth of assertions, after offering that plea. So I guess it’s just the time needed to construct an actual argument or back it up with evidence, that you can’t afford to spare.

Because I’m not actually very worried about deep inequities in the wealth distribution. Not for any reason other than such inequality isn’t something that particularly worries me.

“out of the morass into which they have sunk even as the top .01% speeds vanishingly far away.”

And on this I’ve recently pointed out elsewhere (but of course you’re not to know that) that if we are to worry about inequality which inequality is it that we should worry about? That between the top 20% of the world income (or wealth) distribution which is at a guess about where poor Americans are and the top 0.1% of that world distribution?

Or between the bottom 20% of the world income distribution and that top 0.1%?

Globalisation is increasing the incomes of those bottom 20% really rather well: the last 30-40 years have seen the greatest reduction in absolute poverty in the history of our species. We can also ascribe some healthy chunk of that 0.1% roaring away to said globalisation.

And we also know that globalisation is reducing global inequality while increasing in country inequality. If we are to worry about inequality that sounds like a reasonable bargain to me.

Why would you be so nonchalant about deep inequities in the distribution of wealth if it weren’t, in fact, a problem affecting only a small number of soon-to-be-solvent households? It is remotely possible that you think America faces a serious problem, and that action needs to be taken to pull its poorest citizens out of the morass into which they have sunk even as the top .01% speeds vanishingly far away. If this is so, I would be interested to hear from you what types of action you think would help. It seems to me, rather, that you think NO action needs to be taken, and that there is no problem, generally, with the current distribution of wealth in the US. This is more consistent with my reading of your comments in #21, despite the fact that “all x’s are y != all y’s are x,” something that has been brought to my attention in the past.

Other Sean: sorry, I don’t have time to educate you on the number of ways in which the concentration of wealth in the hands of the six Walmart heirs might or might not serve overall American productivity, the extent to which the management and investors of Walmart might or might not have grown their wealth and their business by taking inappropriate advantage of government programs, in he US and abroad, and the merits and problems of the Walmart business model for long term productivity, in the United States and elsewhere. I have a business to get off the ground in an uncertain economy. If you to impute economic illiteracy to Amy Goodman, please point to a specific comment in which she says something untrue or ill-educated, rather than a remark she made that everyone concedes the literal truth of.

Nice comment. Amy Goodman’s remarks and some of the replies offered in support show no evidence their authors are even aware of a production process in which this thing called wealth plays a part. They speak in terms of “owning”, “mobility”, and “disparities”, as if wealth was simply an end product that can be cleanly separated from the process of its creation.

Marxists back in the day at least knew what capital was. They could give you a reasonably correct description of how it worked. In fact they understood there are important advantages to be found in large accumulations of capital.

You won’t find even that level of economic sophistication in the Democracy Now crowd. I mean, do you think Amy Goodman or Michael Moore could name the factors of production if called upon to do so? Not a chance.

It’s shocking to behold, but the Left really has taken some giant intellectual steps backward in the last 100 years.

People who receive marginal wealth, by what ever means, generally use some fraction of it (0% to 100%, inclusive) in such fashion as to generate more wealth, and some faction in some fashion as to not generate more wealth. Wealth which is used to generate more wealth generally benefits many people in the process (e.g. if it’s used toward building a factory, that factory will not only generate wealth for its owner, but will benefit of its workers, suppliers, and customers). In a free society, the people who use a larger portion of their marginal wealth to generate more wealth, will naturally end up with more wealth than those who do not, and each dollar of wealth they acquire will generate more wealth than it would if given to someone who would not use it to generate wealth.

There are two main alleged “problems” with concentrations of wealth that occur via this means (those who more effectively use their wealth to generate more, ending up with more than those who do not). One “problem” is that happiness and well-being are supposedly functions relative wealth rather than absolute; the fact that the poor in this country can afford dwellings with running water and electricity–things which would have been extravagant luxuries 100 years ago–supposedly does not really make them better off since the rich can afford vastly more extravagant luxuries than were available 100 years ago. While it is certainly true that many people have been taught that they’re supposed to be miserable if other people are wealthier than they are, I would suggest that such people are miserable not because of others’ wealth, but because they’ve believe they’re supposed to be miserable.

The second problem is that over-concentration of wealth supposedly leads to over-concentration of political power. While it is true that this can happen to some extent, the effect is made worse by supposed attempts to check it. Such measures always work to the benefit of those who implementing them, who naturally will have the lion’s share of political power. They do not prevent the concentration of political power, but rather serve to protect those who have it from those who might otherwise act to weaken it.

Concentration of wealth, when such concentration is the result of honest people making the best use of their resources, is a good thing. To be sure, concentration of wealth can sometimes follow as a consequence of concentrated political power, and that is a bad thing, but as noted before, efforts to prevent that by preventing concentration of wealth merely serve to reinforce the concentrations of political power, making the situation worse.

Again, however, it’s not a 1st amendment issue…

1) The USC was an agreement between the states…

USC no longer in effect… {astonishment mine}

Wholly Jeebus, Len – not again.

Please PLEASE back this very spurious and unique claim – namely, that the United States Constitution does not apply to all of these United States. Even in the case at hand, the American Civil Liberties Union intervened on behalf for the very reason that school faculty member(s) violated the student’s 1st Amendment rights.

I know you’re a smart guy – you’ve told us so in no uncertain terms – but, for the life of me, I want to understand this very unusual interpretation of the authority of the Constitution over the states that you keep claiming. So, if you could find it your clearly-more-full-of-truth mind of yours to explain this, I’d appreciate it.

I really want to understand why you feel the Constitution doesn’t apply to the states and you keep saying “because I said so”. If it doesn’t apply, why, again, were the following cases, all adjudicated by the Supreme Court, Constitutional challenges to the local/state laws:
- McDonald v. Chicago
- Heller v. DC
- Kelo v. New Haven
- Dover v. Kitzmiller
and even
- Brown v. Bd of Ed

Every single one of these cases were decided by simply asserting that the local- or state-level law/ruling violated someones’ rights guaranteed by the US Constitution. IOW: the states can’t just do what they want. They are bound.

If you can identify one – just one – single case heard and judged by SCOTUS that didn’t on a constitutional challenge, I’d have to consider the possibility that I’m in error here. So far, though, you just keep up the “USC doesn’t apply…blah blah blah… Linconln…I know and you don’t so do you keep challenging me…having spent years studying the USC…”

Please, Bro – throw me a bone. Make me think about it. Or else, accept every bit of criticism you get when you assert something so absolutely foreign to all the rest of our way of thinking.

Leaving aside the whole dispute about what money actually buys in politics…

There is no connection between concentrated wealth and political power. The NRA doesn’t need billionaires to be one of the biggest lobbying groups in the world. The teachers unions have captured an entire political party just by humbly scraping together the dues of several million salaried thousandaires.

In fact, you’ve got it backwards: it’s not private millions but public membership organizations that hold fearsome sway over the political process.

An Arkansas Republican can get elected whether the Walton family likes him or not (it might make things unnecessarily difficult, but he can still do it). But a California Democrat cannot win office without say so from that blue-blooded redoubt of plutocracy known as the California Correctional Peace Officers Association?

No Ms. Waring, I do not posit that.

Rather, I state that someone with such education debt is likely to be in that group which has a negative net worth. This is a very different statement than what you attribute to me, the idea that most of those with that negative wealth are in such a position.

Position x puts you in group y is not the same as stating that most in group y are in position x.

However, since you’ve raised that point it would be interesting to examine it.

“Two-thirds of college seniors graduated with loans in 2010, and they carried an average of $25,250 in debt.”

http://projectonstudentdebt.org/pub_view.php?idx=791

It will depend on a number of factors: how many such recent graduates are defined as being their own households for example. How many such recent graduates have assets greater than their debts (not all that many would be my guess).

If we do define recent graduates as being households then my best guess would be that two thirds of them have a negative net worth. In the way that we measure these things that is, for we don’t count that degree as a financial asset despite the obvious value that some of them have (A BA in Finance having one, a Masters in Puppetry perhaps another).

“Sadly, US social mobility has fallen from its peak, is dramatically lower than mobility in Sweden or France or Denmark,”

I am well aware of this: although as an Englishman I do not define economic mobility as being the same as social mobility.

Without doing anything so boring as trying to look up any facts what I would posit about the wealth distribution is that those with high negative net worth are likely to be exactly those who have borrowed to improve their human capital. Because by the way we measure these things we see the debt but do not count the asset as a financial asset.

Those who we would count as poor in the more traditional sense I would expect to have a *small* negative or positive net wealth. A small positive for of course if it were large then we wouldn’t consider them poor. A small negative because access to the sort of lending which leads to a large negative is one of those things that the poor tend not to have access to.