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Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains.

But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that's not a misprint.

Just to give you a sense of who we're talking about: the nonpartisan Tax Policy Center estimates that this year the 99th percentile will correspond to an income of $402,306, and the 99.9th percentile to an income of $1,672,726. The center doesn't give a number for the 99.99th percentile, but it's probably well over $6 million a year.

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Many poor people in the US, and even in Canada and Western Europe, lack what is called "food security".

Katrina certainly showed up huge differentials in access to proper housing, or any housing at all. Here in Montréal, housing and especially rental costs were relatively low, but they are increasing rapidly now, and we are seeing a lot of overcrowding and poor access to stable housing.

There is a ten year difference in life expectancy between Westmount and St-Henri/the Point, (atop and beneath our so-called "mountain").

If conservatives are concerned with this issue, it is because it does have an impact on economic prospects as well as social peace.

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It is true that the Gini numbers remain a lot lower in most other developed countries. Recent figures for Japan have been 0.249, for Germany 0.283, for France 0.327. But those countries have paid heavy prices for their relative income equality. Just about all of them have had lower growth rates than the U.S., and most of them (an exception is Japan) have far higher unemployment rates. The reality is that in democratic free-market societies, more inequality tends to mean more growth.

...

The driving force behind income inequality has been meritocracy, i.e., workers get what they're worth. And in periods of boundless technological innovation, like the present, brains and talent are suddenly worth a lot more. The demand for mental skills has exploded.

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The center doesn't give a number for the 99.99th percentile, but it's probably well over $6 million a year.

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Thanks but no thanks.

[ 27 February 2006: Message edited by: VanLuke ]

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None of these statisitcs matter one whit. What matters is whether or not people at all income levels are fed, sheltered and healthy. If the top cats make huge incomes that has no effect on the bottom cats.

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Oh really! I thought that "the market" was the correct mechanism for making social decisions. At least, that's what libertarians always say!

But if the market is made up of ten people with 100 million dollars each, and another thousand with $100,000.00 each, there is a huge skewing effect.

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eanuts. I hear tell that the CEOs of the Big Pharma corpses are making annual salaries of $85 million.

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The 1993 Gini Index is estimated at 0.454. By 2000, it had risen to .460, an increase of 0.006. By 2002, it had increased to .466, another increase of 0.006. I don't know what the current value is to three decimal places (and I'm not convinced that such precision is warranted) but the steady upward climb over the years is pretty clear.

Source: US Census figures

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NOTE: Change in data collection methodology suggests pre-1993 and post-1992 estimates are not strictly comparable.

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Originally posted by VanLuke:
What a wonderful link rici. They want two bucks for their propaganda.

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Originally posted by lagatta:
Here's another twist on the proverbial inability to walk and chew gum at the same time: Oops! Bush falls while trying to cycle, wave and shout.

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The original report, in Scotland on Sunday (registration required, but you can google for it if you really want it) added a couple of details:

-- The victim was off work for 14 weeks as a result of the collision with "a moving/falling object" (i.e. the leader of the free world and his bicycle).

-- Such carelessness would usually lead to the laying of charges in Scotland.

Unfortunately, not all of Bush's mishaps can be sorted out with a simple "oops, sorry."

[ 27 February 2006: Message edited by: rici ]

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Originally posted by libertarian:
If Bill gates is worth $1 trillion what does thet matter. As I said, what matters is an absolute measure: do all people have access to food, shelter etc. How does Bill Gates net worth or income effect people at the bottom?

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Did all people in Louisiana have access to food, shelter, etc. last fall? Do all Native people in Canada have access to food, shelter, etc.?

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Originally posted by libertarian:
And by the way it is reported that Fidel Castro is worth quite a bit. Why no complaints here about that?

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Originally posted by rici:

Really? It shows up for me without any demands for money, and I certainly would never give them any. Sorry.

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That's weird, isn't it?

No problemo

As it said, the Scottish police constable was off work for 14 weeks. That sounds like a serious injury, not just a few scrapes. Wouldn't like to think what would happen to me if I seriously injured a police officer as a result of a negligent action.

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Originally posted by libertarian:
As I said, what matters is an absolute measure: do all people have access to food, shelter etc.

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Originally posted by libertarian:
As I said, what matters is an absolute measure: do all people have access to food, shelter etc.

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I know that on the issue of inequality and health, there have been studies done on the impact of systemic racism on the high rates of high blood pressure and related disease found among African-Americans, while West Africans of similar genetic background (the only difference being that the US Blacks could have some white and some Aboriginal background) have very low rates of hypertension, although it is obvious that most US Blacks have several times the absolute income of their West African cousins.

[ 27 February 2006: Message edited by: lagatta ]

But this "libertarian" is such a plodding, unoriginal thinker, that I can't see the point of it.

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Originally posted by libertarian:
And I ask again: what does the net worth of rich people have to do with the Katrina victims? Are they hoarding food and gyproc?

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Well, aside from the fact that some people are getting rich by jacking up the price of gyproc, some already rich people resent that they will have to pay for the post-Katrina recovery:

Wealth After Katrina
Affluent taxpayers may end up financing the government's open-ended disaster relief commitments

Spotted the March 2006 issue of Worth magazine on the rack for the first time today. Seems to be all about wealth and how to keep it and get more of it.

Anyway, the cover story by Elizabeth Harris on who is going to pay for the Katrina relief and cleanup effort caught my eye--and opened them wide. The article is not available on-line so I jotted down a few quotes that pretty mush sum it up.

Alex Van Rensselaer [successful and no doubt wealthy entrepreneur] as quoted in the article:

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So many conservative groups are trying to reduce the size of government and exposure to government programs everywhere, and this is just the opposite.

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Yeah, they've sure done a heckuva good job of reducing the size of government, alright.

Oh right, I forgot that's code for eliminating social programs.

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Obviously any huge new spending like this is going to put more pressure on Congress to resist the permanent Bush tax cuts that we are looking for--pressure to justify new taxes.

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And we can't have that, can we. Are there no pup tents for the survivors? Are there no cardboard boxes?

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And our side is constantly looking for ways to lower taxes to drive the economy--and this is exactly where we don't want to go.

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Oh, I'm sure Mr. Van Rensselaer doesn't want to go there.

Does this asshat not realize that the cost of Katrina pales when compared to Son of Bush's excellent little Iraqi adventure?

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Originally posted by libertarian:
And I ask again: what does the net worth of rich people have to do with the Katrina victims? Are they hoarding food and gyproc?

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Let's assume that in 1972, capitalists (meaning people who "earn" (ha!) their money from capital accumulation, not just anyone who engages in the capitalist system) are only getting their just due from their stock shuffling, getting far, far more wealth from the system annually than the workers who actually create all this wealth. It would still mean that between now and then the share they are receiving has skyrocketed dramatically, way out of line with the growth of the economy itself. Is this increase justified, and if so, how? What have they done or are they doing that their 1972 counterparts didn't, to "earn" this much larger share share of the pie? Has their contribution (assuming, again for the sake of argument, that they make one) increased so outrageously compared to all other levels of society?

I would put it to you that they haven't changed one bit. They were parasites then and they are parasites now. They are just bigger parasites, like a tick that is 497% more engorged on your blood. I'm gonna go out on a limb here and assume that if unionised wages had shot up in a similar fashion over the same time, you would be howling about how they were killing the economy by receiving rewards far out of line with their contribution. I bet you do that now, in fact, despite that real wages have been falling or stagnant for decades. Assuming I'm right about you, do you see how you have a different standard for the capital class and the working class? That you are more of a sycophant than a libertarian, always pulling for the side of power and privilege?

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And I ask again: what does the net worth of rich people have to do with the Katrina victims? Are they hoarding food and gyproc?

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Originally posted by Sineed:
The rich aren't hoarding gyproc and food, just the money that could be used to buy these things.

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There is not a limitless amount of money. If some people have more, other people have less.

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If Bill Gates had never amassed his fortune, does this mean the homeless guy who hangs out by the Eaton Centre would have a home?

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Wealth ownership is a more interesting comparison simply because it's the owners of wealth who control the society. It's also true that many who own great wealth have little income themselves.

In any case, the figures for wealth ownership are just as disparate as for income.

Facts about wealth in the United States

In the US, the top 1% of wealth owners own 38.1% of the total net wealth. This is greater than the total owned by the bottom 90%. The top 10% of wealth owners have 70.9% of the total wealth.

The bottom 40% of wealth owners have 0.2% of the total wealth, while the bottom 20% of wealth owners own a negative amount of wealth.

The figures for Canada are not quite as disparate, but pretty close.

Now, the problem is, the market responds to those who wield the greatest wealth. In the marketplace, a dollar is a vote.

It is obvious that in a totally free market, those who have the most assets will have the greatest control over the market.

Given that it would be difficult, if not impossible, for the biggest wealth owners to consume their wealth, they use it to achieve even greater wealth.

This is borne out by the figures, which show that between 1976 and 1998, the top 1% of wealth owning households increased their wealth by over 40%, while the bottom 40% of households saw a drop in their net worth of 76.3%.

It should be obvious from these figures that the tendency in the *free* market is for wealth ownership to become more and more concentrated.

Given that the government in a laissez-faire capitalist society leaves most of the functions of the economy to the *free* market, eventually you'll have a tiny group of people who completely control the condition of all within the society.

That tiny group can't act in the interest of society even if they wanted to, because the logic of capitalism is that if you restrain your profit taking, someone else will come along and take them for you.

Thus, there is an ever larger underclass, such as was seen in the wake of Katrina, who have little or no control over their society, while there is an ever smaller upperclass, who wield the greatest control, and use that control to increase their holdings.

Democracy makes little difference, because the tendency is for more and more decisions to be made in the 'marketplace', and fewer and fewer to be made in the political arena.

The distribution of income affects which products the market produces.

Too much money in the hands of wealthy people causes the overproduction of luxury goods.

Even in health care, the effect can be disastrous in a market system.

Example: Suppose Bill Gates and I both need a certain operation. Suppose my life depends on it, while his appearance will suffer if he does not get the operation.

My life savings are $100,000.00. His are 1000 times that. Who will get the operation? Doesn't the existence of social inequality mean that Bill's less-pressing needs are met instead of my more-pressing ones, because he has the money?

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Maybe you and "libertarian" could pm each other about this. Before he's banned for being a waste of everybody's time.

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Originally posted by rici:
The 1993 Gini Index is estimated at 0.454. By 2000, it had risen to .460, an increase of 0.006. By 2002, it had increased to .466, another increase of 0.006. I don't know what the current value is to three decimal places (and I'm not convinced that such precision is warranted) but the steady upward climb over the years is pretty clear.

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Another thing is to look at the trend. The 1990s economic expansion nearly halted the increase in its tracks, but did not force the Gini back down. I imagine since then it's resumed a steady upward climb.

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Re: income and wealth inequality.

I put it to anyone who cares to consider the implications of a poor distribution of income and wealth that such a lopsided distribution, at best, provokes more frequent recessions or haphazard economic growth. At worst, of course, such things spawn revolutions.

Let us consider the 19th century. In the post-Civil War years just prior to the Great Depression, there were at least two "panics" (as they called such things back then) - the Panics of 1873 and 1893, each provoking severe depressions lasting about four years, with aftereffects beyond those as well. In addition, going back before the Civil War and its devastation, there were two back-to-back depressions in 1834 and 1837.

In short, factoring in the Great Depression, it became customary to generally expect a depression every twenty or thirty years in the USA.

Since the Second World War there have been no depressions thanks to the most far-reaching extension of regulation of the US economy in the 1930s and 1940s. From 1945 to 1973 there was only one recession of any note, and that was the 1957-1959 recession. Even the 1970 recession was quite mild compared to the inflationary recession of 1974-75.

Post-1973, however, up until 1994 there were no less than three recessions and depending on who you talk to, 2001-2002 were recession years as well.

This is because the US economy is now more like a hybrid of its 19th century free-wheeling character and the 1950s/1960s regulated character, which protects the US from the worst consequences of ecomomic foolhardiness while subjecting the bottom 80% of the population to more insecurity and distress than would otherwise be the case.

In all this, the thread of income and wealth inequality can be seen. Throughout the 19th century there were frequent episodes of grossly imbalanced wealth accumulation, and the 1920s economic expansion benefitted the rich more so than 'everyman', especially as income tax policies were geared to this end.

By contrast, from the 1930s until the 1970s, economic policies were aimed at curbing this tendency of grossly imbalanced accumulation of wealth, and were indeed so successful that the top one percent of the US population only held 30% of the wealth by 1970, by contrast to around 50% before the war, and 40-some percent since then.

Hammering the point home, the policies post-1970s are clearly of a pre-Depression character, and the usual attendant problems of wealth accumulation have resurfaced, but amidst the remains of a welfare state that still is more far-reaching than municipal "relief" of the 19th century.

[ 27 February 2006: Message edited by: DrConway ]

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Originally posted by Mr. Magoo:
If Bill Gates had never amassed his fortune, does this mean the homeless guy who hangs out by the Eaton Centre would have a home?

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[ 28 February 2006: Message edited by: Makwa ]

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Originally posted by Yonge Street Blue:

Of course it does. They might have invented Windows computing, and might have shared the wealth voluntarily. It's selfish, fascist pigs like Gates who believe they're entitled to keep some of what they create.

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Microsoft used unlawful means to achieve their profits. They restricted trade in computer operating systems. In fact, Bill Gates created little, in that the operating system he offered under licence to IBM was the creation of someone else.

There's another point as well. That is, while the economy of a country is not a closed system, the economy of the world is.

In other words, Bill Gates making large amounts of money doesn't necessarily mean some other American will be without food or clothing. As long as the inflow of resources to the US economy is growing, the living conditions of a single person may not be affected in any way by the income of another.

However, in the world economy as a whole, when someone uses a barrel of oil, that is one barrel that is no longer available for someone else to use. The same is true for all non-renewable resources.

Having an economy which is totally dependent upon the airplane and the automobile, and uses roughly 25% of the world's oil supply daily, definitely decreases the chances that some poor sod in Chad, or Haiti, will ever get to experience the use of that resource.

As all of the world's resources become 'endangered species', those who are currently too poor to afford the use of those resources, will likely never get to use them.

So Bill Gates, as a very wealthy man, may be able to sleep soundly, in the knowledge that his wealth doesn't come at the expense of the homeless wretch in Seattle.

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However, in the world economy as a whole, when someone uses a barrel of oil, that is one barrel that is no longer available for someone else to use. The same is true for all non-renewable resources.

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What non-renewable resources does software use?

In fact, I would think you could argue that with centralization, one larger company could be more efficient in their use of these precious resources than 50 smaller companies. Why have 50 different warehouses, 50 different offices, 50 different CD replicating facilities, etc., etc.

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If wealth at one end necessarily means abject poverty at the other, how can that be?

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Originally posted by Mr. Magoo:
I see. So lemme guess: IKEA is, in fact, creating poverty, just not in Sweden. Somewhere in Somalia a child is going without dinner, and it's some millionaire's fault. And your proof of this will be your earnest belief. Right so far?

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But it's been asserted that those at the bottom can, in fact, be fed, sheltered and healthy — even if someone else is mega-rich. And there seems to be some disagreement on that.

1) societies and their rich and powerful, can elect to redistribute some of their wealth to the benifit of the regular people and as a result live in a society where they feel secure as individuals and their power and life is shared to some degree with everyone else in society. most people will share a fairly common understanding of their society and will feel a part of it. examples: canada, sweden and costa rica. or

2) societies and their rich and powerful can choose not to redidtribute any of their wealth and create a situation where individual security and other quality of life components are avaiable only on an ability to pay basis. These societies will be characterised by a large number of people who share a poor quality of life and feel no common cause with a small group that buy a very high quality of life. the irony is that the wealthy group will spend as much or more on buying personal security as they would in taxes to contribute to a broader societal outcome. this group will pay for walled and secured compounds, bullet proof mercedes and helipads but true to their creed of greed at least the little people won't be getting anything they couldn't afford. examples of these societies: Haiti, the dominican republic and, eventually the good old us of a and canada if the wealthy and powereful refuse to willingly contribute to the quality of life of the larger society.

... "libertarian" is hard at work exposing Fidel Castro now.

[wailing and gnashing of teeth]I thought Fidel Castro was the Second Coming! Oh, I am so distressed that "libertarian" has shown my god to have feet of clay!! [/wailing and ganshing of teeth]

Please "libertarian" you brilliant, brilliant thing you; don't destroy anymore of my treasured delusions with your penetrating analysis!!!

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Originally posted by Mr. Magoo:
So do my inexpensive eggs and butter mean that someone is "feeling pressure", or that someone is necessarily driven to where they do not have food, shelter or health care?

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So do my inexpensive eggs and butter mean that someone is "feeling pressure", or that someone is necessarily driven to where they do not have food, shelter or health care?

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Just how isolated from reality are you? Jesus. Talk about "earnest belief".

Tax cuts have been mentioned briefly on this thread but there's a lot more to it.

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Well, when you reduce it to the individual level like that, it just becomes silly and meaningless, at best.

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Fair enough. You mentioned me, so I continued on that track. But even if "we" get cheap eggs, does that necessarily mean that someone MUST now do without food or shelter?

I think Libertarian asked a reasonable question: does the existence of exceptionally wealthy individuals NECESSARILY mean that someone MUST do without the BASICS OF LIFE? Or is it possible for us to have wealthy individuals AND feed and clothe everyone (if we were to make that a priority)? This is not a question of "should we have rich people?" or "are rich people a good thing?".

I get the feeling that Thwap doesn't like me.
Boo Hoo

[ 28 February 2006: Message edited by: libertarian ]

This isn't rocket-science. It's obvious. It goes without saying. You haven't picked up on it because you're not as smart as the average person. And that's what makes you so boring.

Now sensible people can furthermore talk about class stratification and all its many ills...which will be lost on libertarian, who, like Magoo, is a specialist in first-degree analysis, and, in particular, impeding any analysis beyond a first-degree one. But we needn't argue such things with such as them: it's simply immoral.

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Originally posted by Mr. Magoo:

What non-renewable resources does software use?

And if the answer is some plastic for a CD, and some paper for a box and manual, then wouldn't that be the case whether MS sells it, or some other company?

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In that this was a response to one of my posts, I suppose I can reply.

If our economy existed solely on software, this comment might have some relevance. If we could eat software, wear it, use it to transport goods, whatever.

What I was talking about was the use of non-renewable resources by a fraction of the world's population. When a barrel of oil is burned transporting someone's Aunt Minnie to Florida for the winter, someone somewhere else will never get to use that oil. When that barrel is gone, it's gone.

Oil is by no means the only non-renewable that is disappearing quickly. They all are.

When a non-renewable has been used up, those people who never had the chance to use some of it, never will get the chance.

That is the case for much of the world today. They sit back and watch while Europe and North America digest the bulk of the world's resources, hoping for their own chance to participate before it's all gone.

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Originally posted by maestro:

When a non-renewable has been used up, those people who never had the chance to use some of it, never will get the chance.

That is the case for much of the world today. They sit back and watch while Europe and North America digest the bulk of the world's resources, hoping for their own chance to participate before it's all gone.

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I think Libertarian asked a reasonable question: does the existence of exceptionally wealthy individuals NECESSARILY mean that someone MUST do without the BASICS OF LIFE?

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Actually, no. You are being too kind. Libertarian just stated that it didn't matter what the distribution of income is.

The answer is clear, though, that at SOME level of inequality, competition for scarce goods means that the wealthy will outcompete the poor, even though the wealthy may need the item less.

Suppose billionaire Magoo and poverty-stricken House both need a scarce shot of avian flu virus. I have the disease, and he wants it por preventive reasons.

Does anyone think his ability to outbid me by a factor of 10,000 to one would have no impact on who gets the shot?

Of course it is possible to ameliorate this situation somewhat by having a social democratic system in which the relatively poor are given income so that they can buy food and clothing, and obtain a subsidized room to live in.

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If a select few consume more than their share of the finite total that would leave less resources for the less fortunate. Sounds simple enough, what is the confusion/debate about?

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Whether or not "less" (which is fairly self-evident) equals "not enough".

If you and I happen upon a thicket of wild raspberries, it's true that any raspberry I eat, you cannot. And it's true that if I pick and hoard a bushel of them, that's a bushel of them that you won't get. No argument there.

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Originally posted by Mr. Magoo:
But does that mean you get none? That you don't get enough? Is it impossible to imagine that I might be able to pick a bushel AND eat my fill AND you also get enough to eat?

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It's nice to sit here in a nice warm home in Canada and contend this, but tell me how well this works in a place like Haiti, Magoo.

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Perhaps it may not, though if it were possible, in theory, elsewhere then I would think it would be similarly possible in theory in Haiti. Whether the reality matched the theory is another story.

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Originally posted by Mr. Magoo:

Whether or not "less" (which is fairly self-evident) equals "not enough".

If you and I happen upon a thicket of wild raspberries, it's true that any raspberry I eat, you cannot. And it's true that if I pick and hoard a bushel of them, that's a bushel of them that you won't get. No argument there.

But does that mean you get none? That you don't get enough? Is it impossible to imagine that I might be able to pick a bushel AND eat my fill AND you also get enough to eat?

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Are raspberries a non-renewable resource?

You seem intent of misreading or misunderstanding what I have been saying. I spoke strictly of non-renewable resources, and your replies are speaking of software and raspberries.

Well, here's a raspberry for you.

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Originally posted by Mr. Magoo:

Whether or not "less" (which is fairly self-evident) equals "not enough".

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Understood. The contention is that there are enough resources for both overwhelmingly rich people and everyone else to have "enough". However, there are people in the US that don't have "enough" by even the most dire standards.

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Are raspberries a non-renewable resource?

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They would be for that one day. If you didn't get enough raspberries because I hoarded them all, it wouldn't be much comfort to you to know there'd be another crop in a few weeks.

And I think my point is obvious, and transferable to "money". It's possible to conceive of a world wherein you can have rich people, AND the poor have the necessities of life.

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If there are more than enough resources for the obscenely rich and the less fortunate to co-exist with everyone having enough to survive then there must be another reason for people not having enough.

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Ya, I had a hunch that if the culprits couldn't be "those rich guys" then there wouldn't be a whole lot of interest in finding any others.

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Ya, I had a hunch that ..

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And I think my point is obvious, and transferable to "money". It's possible to conceive of a world wherein you can have rich people, AND the poor have the necessities of life.

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But this is NOT the world we live in, so this is mere speculation. I also believe such a world is possible, but its just speculation again.

What isn't speculation is the existence of a US where the working class can own a home, raise a family, plan for a comfortable retirement. This US existed fifty years ago. It didn't go far enough by my standards, but it was faaaar better than what's happening now, as the gap between the super-rich and everybody else has widened steadily (and in recent times, ever more quicky) for the last three decades at least.

Your assertion that this gap doesn't have to hurt the prospects of the ordinary labourer is interesting, but again merely speculative, because we can see clearly that it has hurt them substantially in the real world, where the plutocrats have used their wealth and influence to tear down the public services that regular people depend on, and siphon the vast majority of the wealth society has created to themselves, leaving less and less for those actually creating it every year. It is no mere speculation that the lower levels of income distribution have increasingly found themselves destitute and verging bankruptcy. The gap, here in the real world, is the product of the rich stealing from the poor.

Just because you can IMAGINE a world in which this wouldn't happen, you seem to be saying that it isn't happening. I'll copy and paste my earlier post, which seems to have been ignored by you and the sychophant who likes to kid himself he's a libertarian. Can you answer my questions?

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Let's assume that in 1972, capitalists (meaning people who "earn" (ha!) their money from capital accumulation, not just anyone who engages in the capitalist system) are only getting their just due from their stock shuffling, getting far, far more wealth from the system annually than the workers who actually create all this wealth. It would still mean that between now and then the share they are receiving has skyrocketed dramatically, way out of line with the growth of the economy itself. Is this increase justified, and if so, how? What have they done or are they doing that their 1972 counterparts didn't, to "earn" this much larger share share of the pie? Has their contribution (assuming, again for the sake of argument, that they make one) increased so outrageously compared to all other levels of society?

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But this is NOT the world we live in, so this is mere speculation.

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Well, neither is the world without rich people the world we live in.

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Can you answer my questions?

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Authoritatively? No. But I'll take a stab at:

"Has their contribution (assuming, again for the sake of argument, that they make one) increased so outrageously compared to all other levels of society?"

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Their contribution, whether you see it as one or not, takes the value of risking money. While their apparent idleness then and now may make it look as though their "effort" has increased from none to none, it's possible that they're simply risking more money, or, taking better risks. But that's really just a stab at it. I won't deny that I'm no economist. My interest in the question was primarily centred around the question further up.

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Well, neither is the world without rich people the world we live in.

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I know that. That's why I said this:

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What isn't speculation is the existence of a US where the working class can own a home, raise a family, plan for a comfortable retirement.

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This US is mostly already gone, however.

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between 1976 and 1998, the top 1% of wealth owning households increased their wealth by over 40%, while the bottom 40% of households saw a drop in their net worth of 76.3%.

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This dynamic has continued to increase since 1998. That you see no connection here can only be ascribed to willful ignorance.

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Their contribution, whether you see it as one or not, takes the value of risking money. While their apparent idleness then and now may make it look as though their "effort" has increased from none to none, it's possible that they're simply risking more money, or, taking better risks. But that's really just a stab at it. I won't deny that I'm no economist. My interest in the question was primarily centred around the question further up.

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I'm aware of what you believe their contribution to be, and as I said, I'm not interested in debating it right now, since it's off topic.

My point is that the dramatic siphoning of wealth from the working class (as shown above) to the uber-rich is not speculation. It is fact. To me it is clearly theft, using the social muscle of their wealth to get ever bigger and bigger pieces of the pie. If you believe it is not simple theft, then you would have to account, somehow, for this huge draining effect that is leaving low-income families in poverty across the country and swelling the coffers of the most affluent to degrees that are unprecedented. I understand that you may not have the training to offer an alternative explanation, I'm just saying that you would have to have one to dismiss the most obvious one so glibly as you are doing. One wonders, since you feel so unqualified to explain what is going on, why you seem so sure that the most simple and obvious explanation, that the rich are robbing the poor, is so silly.

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Originally posted by josh:
Look, putting aside questions of fairness, the problem with excessive inequality is two fold, economic and political. Maldistibution of wealth can lead to economic collapse. Think the Great Depression. And too much economic power in too few hands is inimical to democracy.

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Originally posted by Mr. Magoo:

But Libertarian's question was about people not having enough. Sure, some people don't, but is that necessarily because some rich guy has more? If Bill Gates had never amassed his fortune, does this mean the homeless guy who hangs out by the Eaton Centre would have a home?

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Well, since it's difficult to measure all the flows of money directly, the only way to know for sure would be if we had different cases to contrast--like if different countries had different income distributions, some flatter, some more tilted, or if a given country had changed its income distribution over time. Then we could try to figure out whether there seemed to be any systematic differences.

Wait, I hear a voice whispering in my ear . . . What's that you say? Such comparisons exist and they do in fact systematically show that at a given average income level poverty and homelessness are generally higher where income disparities are high? And the US and Canada have been seeing higher levels of poverty and homelessness as their levels of income disparity rise? And this has been pointed out to Mr. Magoo time and time again in various past threads, but he continues to insist on this kind of faux-naive question?

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Are raspberries a non-renewable resource?
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They would be for that one day. If you didn't get enough raspberries because I hoarded them all, it wouldn't be much comfort to you to know there'd be another crop in a few weeks.

And I think my point is obvious, and transferable to "money". It's possible to conceive of a world wherein you can have rich people, AND the poor have the necessities of life.

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This is just about the poorest excuse for an argument I've ever seen.

First to respond to my point re: the finiteness of non-renewable resources with a non-logical comparison with 'raspberries', then you try and somehow equate this with 'money'.

The point I made about non-renewables is that once they are used, they are gone. They will not come back.

Thus, those who have never had the option of using those resources will be denied them for all time.

Much as capitalists try to pretend otherwise, the world is not 'without end'. The wealthy consume more than the poor in a closed system. That system is not a country, it is the whole globe.

Is it any wonder that the G8 nations, the collection of the most industrialized nations on earth, spend 75 - 80% of the world's yearly expenditure on the military?

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Originally posted by Sineed:
The question this thread seems to be increasingly addressing is, do the rich deserve their money?

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I think in many cases, great wealth in North America was made from the selloff of natural resources and hi-technology which was bought and paid for twice over by the public.

In Canada, about a 14 or so billionaire families influence our daily lives: what we pay for groceries to the rent we pay to what banking fees we're charged. All except one of these families made their first millions with illegal booze. The Irving's started out as log thieves on the St. John's River.

In America, the Advanced Research Projects Agency was part of the U.S. reaction to the then Soviet Union's launch of Sputnik in 1957. It caused North American's to change our math and physics curriculum in schools. And about a hundred scientists and engineers on the public payroll developed silicon chip technology, lasers, satellites, fiber optics, telecommunications, jet aircraft, rockets, various computer technologies, the first "GUI" and important metallurgical advances. Walter Reed Army Hospital made important tropical vaccine discoveries. All of this hi-tech brain trust was handed off to a few dozen wealthy families and corporations referred to as "the free market" and private enterprise. The credit for America's cold war era prosperity is owed to liberal amounts of socialism from the beginning. U.S. taxpayers are said to spend roughly $2.5 trillions dollars a year for corporate America to earn about $500 billion. There are many costs incurred by the State along the way. In many opinions, wealth redistribution and state interventionism are key features of the American economy. No corporate CEO or working class man is an island.

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The salary of the CEO of the large corporation is not a market award for achievement. It is more frequently in the nature of a warm personal gesture by the individual to himself. - J.K. Galbraith

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[ 02 March 2006: Message edited by: Fidel ]

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His stance is, as it frequently seems to be, disingenuous--taken up not because he's under the slightest illusion that he's right, but just to annoy and muddy waters.

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Well! A big "Tsk tsk" to me then!

Actually, since it seems to pass as "common knowledge" that the existence of wealthy individuals unambiguously and inherently MUST mean people starving, I don't think it's out of line in the least to ask the people making that assertion to unpack it.

And it's amazing that it was so damn hard, apparently. I mean, if it's such a given "fact", you'd think the first 10 posters to post after the question was asked would have tripped over themselves answering it. And really, it's still not answered. If someone has conclusively shown in this thread that the existence of rich people MUST mean that someone CANNOT have enough to live on, please show me where. Not surprisingly, I'm seeing lots of heat in response to the question, but little if any light.

"they do in fact systematically show that at a given average income level poverty and homelessness are generally higher where income disparities are high?"

I'll assume that by "generally", Rufus means "most of the time".

What about the rest of the time? If the existence of wealthy people means that someone CANNOT, POSSIBLY, have enough, then there'd be no "generally" about it.

"And the US and Canada have been seeing higher levels of poverty and homelessness as their levels of income disparity rise?"

Again, this shows that when there are very wealthy people there are also going to be poor people. But I'm sorry to say, it's still not an answer to the question. The question is not about "making more poor people". It's about whether it is possible to have a society in which some people are very wealthy, AND everyone has enough to eat. Is that possible? Yes? No? If you believe the answer is "No", all I'm asking for is the rationale behind it.

in part, it is also an attitude of resentment or acceptance, as in the free market theorist who quipped "" so Michael Jordan makes $30 million? doesn't cost me a dime ..."; the high income is not being stolen somehow or subtracted from anyone's income, unless that can be specifically proven, he contends

inequality also has various facets, one of which - age - is downplayed systematically ;
in a word, older people have on average far more time to accumulate experience hence higher average earnings and assets, than younger people;
as a result, many of the people in the "lowest" statistical percentiles of income will gravitate through several (and sometimes, as in the case of college graduates, all) of the levels above them as they grow older

northern Europe, esp, the Netherlands , has the best balance perhaps of all social regions in balancing natural pushes to inequality with establishing social floors and ceilings

[ 02 March 2006: Message edited by: Geneva ]

And no, sorry, but the second paragraph doesn't answer the question either. I'm not disagreeing with what's in the second paragraph, but it doesn't answer the question. It's just a "for want of a nail, the shoe is lost" argument that strongly suggests the possibility that maybe Bill Gates's company might have put someone out of business. But that's a business practice. I don't doubt for a moment that Gates could have been more ethical, not driven anyone out of business (which does not, by the way, "mean" someone not having food or shelter), and still been rich.

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we're all pulling for you!

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Originally posted by Mr. Magoo:

Agreed. And once we all accept that the reason is NOT "the existence of" the rich, we can start trying to find that reason.

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Aww.... I have to admit that I'm a little disappointed. I hoped that you would have at least suggested some possible answers.

Right now, it seems that the entire thread can be reduced to two points.

A) People don't have enough because excessively rich people hog all the resources.
B) People don't have enough for some other reason than A.

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maybe this is a better job for Stephen Gordon.

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Now why would that be since economics can't even explain the prices we pay(and hence incomes received)?

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rici
rabble-rouser
Babbler # 2710

posted 27 February 2006 03:20 PM Profile for rici Send New Private Message Edit/Delete Post Reply With Quote According to Forbes Magazine, it's all OK.

quote: It is true that the Gini numbers remain a lot lower in most other developed countries. Recent figures for Japan have been 0.249, for Germany 0.283, for France 0.327. But those countries have paid heavy prices for their relative income equality. Just about all of them have had lower growth rates than the U.S., and most of them (an exception is Japan) have far higher unemployment rates. The reality is that in democratic free-market societies, more inequality tends to mean more growth.

...

The driving force behind income inequality has been meritocracy, i.e., workers get what they're worth. And in periods of boundless technological innovation, like the present, brains and talent are suddenly worth a lot more. The demand for mental skills has exploded.

So I guess all the brains are busy satisfying the explosion, leaving only the mediocre to run the country.

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OK, now, I'm confused ... someone on another thread posted a neat little chart showing the US GDP growth over the last few years, and it showed that if you take into account US borrowing, and subtract that from the stated growth in GDP, that since around 2001(?) the USA has had almost no real growth in GDP (one or two years it actually resulted in negative growth.)

So, if the US growth has actually been a mirage caused by excessive borrowing, then their statement is absolutely a lie ... if it is legitimate to state increase economic growth by borrowing and applying that borrowed money to the "bottom line", then one must conclude that Canada should be borrowing a lot more money from places like China.

Which brings up another question ... since borrowing money increases the GDP growth level, does that mean that China, lending all that money to the USA, have an artificially deflated GDP growth rate? Imagine how much GDP growth they would have had had they not lent the USA all that money?

One would think that any danger of reduced growth in the Chinese economy by defaulting USA debt and calling in the markers, would be offset by the increase in GDP growth by not losing it to loans to the USA?

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Now why would that be since economics can't even explain the prices we pay(and hence incomes received)?

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I'd love to see some major economics think-tank release a report called "Capitalism cannot succeed: why our only hope is immediate income redistribution".

I mean, just to watch the backpedaling. Governments urged to obey the economists right now! Anti-poverty groups linking to the think-tank on their website. And a complete, 180 degree, about-face on whether or not economics has any validity.

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Originally posted by Mr. Magoo:
I'd love to see some major economics think-tank release a report called "Capitalism cannot succeed: why our only hope is immediate income redistribution".

I mean, just to watch the backpedaling. Governments urged to obey the economists right now! Anti-poverty groups linking to the think-tank on their website. And a complete, 180 degree, about-face on whether or not economics has any validity.

Maybe on April 1?

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Originally posted by Mr. Magoo:
The question is not about "making more poor people". It's about whether it is possible to have a society in which some people are very wealthy, AND everyone has enough to eat. Is that possible? Yes? No? If you believe the answer is "No", all I'm asking for is the rationale behind it.

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Yes, and I think you have an idea it's possible. I've read you admitting as much several weeks ago in another thread. So why are you winding all of us up like this unless you're just wanting a rise out of us?.

And as to whether there is no challenging alternative to capitalism, it's no wonder. Our economic system is a model for imbalance and government intervention on behalf of the super-wealthy. Large corporations like MS, IBM, Intel, GM, GE etc have relied heavily upon old world colonialism for their market monopolies across the globe. True Smithian laissez-faire capitalism was rejected by the western world after a 30 year-long experiment.

As for the market system we have now, neocolonialists continue pushing for concentration of wealth and not providing any real free market justification for it. We have unprecedented GDP's and concentration of wealth to show for it. But neocolonialists never provide sound market explanations as to why we have to have high unemployment or vast concentration of wealth. Their right-wing lobbies for cutting taxes and state intervention on behalf of the rich to insulate them from free market forces still point to Puritanical and moral reasons for maintaining vast inequality and poverty. What they don't want to admit is that the circular flow of money to business from workers back to government and them can happen without concentrating it in the hands of a few. The economy is not moral or ethical as we already know. It doesn't care if the poor or rich are the ones who can feed and house themselves as long as the circular flow is kept moving. It doesn't matter that there isn't enough productive work to go around, or that if the other 85 percent of the world adopted middle class capitalism based on consumption, we'd outstrip our resources in nothing flat and choke on the pollution.

With capitalism, we're eating our way toward the middle of the pie and guaranteeing global crises. It will eventually come down to choice for humanity between socialism and barbarism. The science of allocating resources has become one of transferring vast wealth from from the common good and working poor to the very rich. Archaeologist, Ronald Wright says that this same economic practice ended in catastrophe for every society in history based on comparative wealth. President Dubya and his neocolonialists have already made that choice, and our Bozos in Ottawa are following along like dogs on leashes as usual.

[ 02 March 2006: Message edited by: Fidel ]

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Yes, and I think you have an idea it's possible. I've read you admitting as much several weeks ago in another thread. So why are you winding all of us up like this unless you're just wanting a rise out of us?.

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I believe it is, but if it could be proven that it isn't, I'd be all ears.

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Originally posted by Mr. Magoo:
I'm wondering if those who believe it's not possible, and proceed to argue as though it's been proven not possible, could explain why.

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Ah! I believe you'll have to take that up with the president of Coca Cola, Mandrake.

I beleive this is where we're all at now. This is the fight for social democracy the world over. And we know ours is the good fight because no human bean should suffer the human indignity of homelessness. No one should endure the soul-destroying experience of hunger.We are the ones who advocate for change on behalf of liberty, equality and fraternity.

This is the point in time where we convince them that everyone has a right to clean drinking water, a roof over our heads, food on the table, health care, education and to participate in the economy and society.

"Impossible" is a very big word. In fact, I don't believe that anything which has to do with economics can be "proven" one way or another, at least in the sense that 2+2 can be "proven" to be 4. So I'll admit that I don't believe it to be impossible that you could have extreme wealth intermingled with general well-being. You could, for example, imagine a wealthy country with a single dictator who owned half of the country's resources, while the remaining resources were more or less equally apportioned amongst his subjects.

However, there is a mathematical reality: if you have a country where inequality is increasing to the extent that the poorest members of that country have decreasing purchasing power, and where those same poorest members do not have enough resources to feed themselves adequately, then that country is not going to eliminate poverty.

In any event, the thought experiment seems to be highly unlikely. That is, it is hard to find any example of such a country, and the ones which might be posited (I can sense Fidel ready to posit Singapore, for example) achieve that sort of "success" on the backs of the poor outside their borders. ("Guest workers", as the European euphemism goes.)

There is a lot of evidence that inequality is highly correlated with poverty. If you look at OECD countries, and compare the inequality measures with the under-5 mortality figures, you'll see that countries with high inequality also have high under-5 mortality. In the United States, for example, where inequality has progressed over the past 30 years to the point where it is no longer really comparable with OECD countries but rather with the "developing world", the under-5 mortality rate is twice as high as Scandinavian countries; given that the US presumably has enough resources to achieve the same overall level of nutrition, housing and health care as Sweden does, we can reasonably conclude that about 16,000 US infants die unnecessarily every year. Furthermore, many of the poor children who do not actually die of inequality will have the rest of their lives marked by early malnutrition.

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Originally posted by Mr. Magoo:

I believe it is, but if it could be proven that it isn't, I'd be all ears.

But some people seem to think it's not. I'm not "trying to get a rise out of you". I'm wondering if those who believe it's not possible, and proceed to argue as though it's been proven not possible, could explain why.

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Originally posted by Mr. Magoo:

I believe it is, but if it could be proven that it isn't, I'd be all ears.

But some people seem to think it's not. I'm not "trying to get a rise out of you". I'm wondering if those who believe it's not possible, and proceed to argue as though it's been proven not possible, could explain why.

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Marx said it well a long time ago. Capitalism requires an army of unemployed.

In other words, in order for capitalism to work, there must be group of people who don't have enough, and are thus amenable to economic coercion.

This has been played out over and over again, in a variety of countries, so there really isn't any question of it's validity.

In fact, it is presented as almost a truism in economics texts, that in order for an economy to 'grow' in a third world country, it's better to have a bunch of people living in poverty in the cities, than it is to have them live on the land as farmers.

Not better for the poverty stricken of course, but necessary for the operation of the economy as a whole.

Closer to home, the US civil war was fought largely because the North needed cheap labour, and in order for that to happen, slavery had to come to an end.

Slave owners, having an investment in their slaves, were forced to look after them. This is not good enough for capitalism. Capitalism requires free labour, that can be used or not used as required.

To put it another way, slavery requires a commitment from the slave owner to protect his investment. Capitalism doesn't want to invest in labour, except on a piecework basis.

The job of looking after surplus labour then becomes a task of the government, with the wealthy constantly working to limit the resources used for looking after that free labour.

In the end, the cost of caring for surplus labour is put on the shoulders of working labour, and removed from the shoulders of wealth owners.

This is a necessary part of capitalism, leading us to the clear conclusion that, for owners of wealth to retain their wealth, a portion of the population must be kept in a marginal economic condition.

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Originally posted by Mr. Magoo:

If someone has conclusively shown in this thread that the existence of rich people MUST mean that someone CANNOT have enough to live on, please show me where.

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So all you want is a concession that it would be *possible* for rich people to exist and for everyone else to still be able to live?

What, in some possible world? Is that all you're trying to establish?
OK, sure, I'll stipulate it.
E(x) {There exists an x} such that x is a possible world or country in which the existence of great income inequality does not cause impoverishment sufficient for anyone in that country to lose shelter or be pushed into food insecurity.

Whether that's because the rich people in the possible country made their money largely from out-of-country holdings and are therefore pulling the money out of people in other countries rather than from their fellow citizens, or because in that possible world technology has brought forth cheap, decentralized matter transmutation and near-free energy, or what, we'll leave as an exercise for philosophers.

Similarly,
E(y) such that y is a possible world in which ripe eggplants are orange. Sure, in the real world ripe eggplants are purple, but that's not a necessary truth--it's contingent.

There is also a Brazilian Oval Orange Eggplant.

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so I'm not sure why you're bothering to go on and on about it, but sure--if that's all you're interested in establishing, consider it established.

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Well, it may not have much to do with reality, but lots o' people seem to want to insist that the opposite is true. Specifically, I've seen it insisted many times that the mere existence of rich people DOES and MUST take food out of people's mouths. And if the existence of rich people MUST mean someone starving, well, obviously that means we MUST get rid of these murdering rich people.

So, if it's not actually impossible to feed everyone and also have a disparity in wealth, at least we know what we're up against. We don't have some mandate to take all the money and redistribute it, or some other wooly-headedness, on the grounds that to not do so would result in deaths or some similar.

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Originally posted by Mr. Magoo:

So, if it's not actually impossible to feed everyone and also have a disparity in wealth, at least we know what we're up against. We don't have some mandate to take all the money and redistribute it, or some other wooly-headedness, on the grounds that to not do so would result in deaths or some similar.

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That's a bit of a stretch. In a particular case, it may be true that one person's wealth is actively creating poverty -- for example, when that one person "owns" all of the arable land, doesn't produce food with it, and people around the area are starving. (Yes, that happens in the real world.)

Although I agree that we don't have a mandate to take all the money. Just some of it.

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Originally posted by Mr. Magoo:

And if the existence of rich people MUST mean someone starving, well, obviously that means we MUST get rid of these murdering rich people.

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I don't think there's ever been such an experiment. We should try one on for the sake of academic study.

We'll take all the high net worth individuals in North America worth at least a million dollars not including assets or land ie. about 3 -3.5 million people or so, and ship'em out to an island in the Caribbean. There they will be given the arduous life-long task of building just one equivalent of Singapore, Cuba or Hong Kong(or perhaps it would end in disaster with another Haiti or Dominican Republic) from their own sweat and toil. We'll let them delegate who builds and maintains roads and sewers, hospitals, schools, telephone and electric power works etc

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Originally posted by Fidel:
Discusssssss!

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