Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them.<p>The US is fundamentally different than Nordic countries, where socialism appears to be working:
* The Nordic countries are tiny compared to the US.
* They are highly educated.
* Their society is homogenous.<p>It seems like everybody is assuming that there will be this rational actor collecting money from the rich and distributing them to the poor.<p>What actually is going to happen is that instead of entrepreneurs becoming rich, politicians will grow even richer than they are now. The politicians will have more power, power that they want to keep, and the only way to do that is to suppress the press and the people.<p>And that's how communism starts. It might sound like I'm taking it too far, but it's happened a number of times already.
> Further, there are an abundance of studies that show that reducing economic inequality (even through redistributive means) actually boosts overall prosperity.<p>To me, this sentence and the ones that follow are by far the most salient point.<p>How many Zuckerbergs, Gates, Brins, Pages and Bezos are we missing out on due to the fact that huge swaths of our country do not have the ability to fully explore and develop their talents? How many trillions in lost GDP does that amount to?<p>To me, this entire debate is a missed opportunity to discuss inequality on the basis of shared wealth, growth and prosperity. Instead we tend to debate these things on a moral dimension which immediately politicizes and polarizes the matter. See renewable energy for another example of how that works.
It is insane (and also very educational) that so many people are completely missing pg's point - author of this response included.<p>I blame pg a little for using the phrase "income inequality" at all since it seems to be a trigger for many people and shuts down their critical reading and reasoning abilities. Let me try to phrase it in a clearer way.<p>If you focus on reducing "income inequality" then you will reduce income inequality, but that will have many negative unintended consequences (killing startups at the extreme, etc). Instead, people should focus on the <i>REAL</i> problems which is lack of economic opportunity, crushing poverty, and political corruption.<p>The real solutions all come from helping the people at the lesser end of the inequality equation without having to touch many of the people at the greater end. Universal healthcare, universal education (day-care/pre-school/public schools/job retraining), universal basic income. Just those three policies alone would have an unimaginable positive impact on whatever country institutes them. And my guess the money for these things already exists if you eliminate ridiculous wasteful spending, subsidies, etc.<p>If, at the end of day you eliminate wasteful spending and there is still a shortage of funds for these programs, then sure increase taxes on the wealthiest. My guess is that many would be fine with it (since it's going to a "good" cause).
Is economic inequality a problem in and of itself? Why?<p>Economic quality seems like a red herring for actual issues like how well off people are. Is the actual concern about how poorly off the poor are? Imagine a thought experiment where aliens come to earth and give every human 100x the resources they have currently (or 100x a year's min wage), as an annuity. The poor are all now rich, and the wealthy can buy their own space stations.<p>Is this <i>intrinsically</i> a problem, and why?<p>If the actual concern is about how well off the lower and middle class are, then that's reasonable: we're talking about the welfare of actual people. But actual people are not harmed or affected directly by some mega-rich person being much richer.<p>I expect that someone will reply to explain that inequality is the symptom of or cause of some other dysfunction, and it is the actual problem - and that's great, that's what I'd like to understand better. Whatever the actual problem is, let's talk about it. If the problem is about lack of adequate education, opportunities, etc. then let's discuss those concerns directly.
Although PG makes a few turns of phrase, one of which is quoted in OP, that implies a straw-man who wants to end all economic inequality, he also talks several times about tackling the effects of economic inequality. The footnote in OP referring to studies that cover the negative effects on economic inequality supports rather than disproves PG's stance on this: economic inequality has multiple negative effects.<p>One of PG's core arguments is that while the inequality is caused by a lot of factors, a big one of which is the snowball effect of capital, when all those factors are removed, the wealth creation aspect will still remain. He explicitly says that attacking the non-virtuous feedback loops that increase economic inequality is desirable for him, he's just interested in targeting those as well as specific negative effects (e.g. poverty) rather than have the conversation framed around "economic inequality".
> Bill Gates gave an excellent summary of the argument against unchecked levels of economic inequality[2]:
High levels of inequality are a problem — messing up economic incentives, tilting democracies in favor of powerful interests, and undercutting the ideal that all people are created equal.<p>This is the problem right here. The "ideal that all people are created equal." The truth is, they are not. There are differences in IQ, differences in emotional capacity, differences in physical strength, differences in programming ability, etc. Because every human has a unique set of DNA -- that will only ever occur once and never again be repeated -- they will have unique combinations of various skills and traits.<p>People are not equal and you cannot make them so. Thus they will have different outcomes economically. It couldn't be any other way.<p>What you <i>can</i> do is provide <i>equal opportunities</i> to those with objectively worse environments, i.e. those in poverty. Attacking this problem will be the most meaningful solution. But economic inequality is still <i>not</i> the yard stick to use for this.<p>How these obvious issues get conflated through the use of the trigger term "economic inequality" is beyond me. Perhaps it stems from the self-esteem movement where we started giving trophies to every kid who could kick the ball. Do people complain about "soccer inequality" because they don't play on FC Barcelona? And should one blame Messi for such a thing, or should they find ways to sponsor youth soccer leagues instead.
Universal income and job guarantees/full employment are PRO STARTUP but ANTI-VC.<p>Given PG makes all his money from the glorified HR scheme that is the VC industry, it's not surprising he is against a system that empowers people to take risks on starting companies that don't require any investment.<p>If people are able to start companies without risking the health of their family, or their long term prosperity, they don't need as much investment and there wouldn't be room in this world for VC funding, and thus not as much money to trickle down to the inaptly named "super angels" like PG and the YC crew.
>while this report by the OECD found that “income inequality has a sizable and statistically significant negative impact on growth.<p>Actually it doesn't do this. It shows that income inequality is associated with lower economic growth. Mixing correlation and causation.
"I’m going to be charitable here and assume that PG is not arguing against those that want to, literally, end economic inequality completely [...] I’ve never met anyone arguing for this."<p>Interesting. Perhaps I'm misinterpreting their rhetoric, but my impression has been that many people are arguing for precisely this.
Out of curiosity, would it be possible to mitigate most of the perceived negative effects of inequality (unequal access to opportunities) by simply re-allocating our existing tax revenue? For example, instead of paying for costly wars in the US / silly development projects like the F35, could we use that money to grant our citizens free college education, better access to health care under a single payer system, basic welfare, and job training programs? Could we employ an infrastructure development program to put people to work at good wages?
It takes a special type of arrogance to support using violent force to take from some group of people to give to another, who you believe to be more deserving of that plot of wealth. Bill Gates has it. Paul Graham doesn't. And thus the supporter of income inequality is the more humble of the two.
This seems like the exact type of confusion Graham mentions. E.g., what does Bannon's insistence that public education is necessary have to do with Graham's essay? Graham clearly is not arguing against social programs or a mixed economy.
Why not a death tax?<p>Give a flat amount to the family (capped at say 5 million), then a flat 100% tax after that<p>No living person pays more taxes<p>Children can get an incredible windfall, but not eye-popping.<p>Tax revenue goes through the roof.
As I said last time this came up, the answer is a maximum wage. We can still set the maximum wage beyond the level of most people (e.g. $1,000,000 per annum after tax). I don't see how it would discourage innovation, but I do see how it'd help curb financial inequality.