"I know the rich aren't all getting richer simply from some sinister new system for transferring wealth to them from everyone else,"<p>401(k)'s are a great example of shifting wealth to the wealthy. SS was used to fund general government spending, but nobody got directly rich from it. With 401(k)'s the financial sector can skim a vast pool of money from the middle class with a huge range of hidden fees. Toss in a 10% fee for pulling money out in an emergency and it's surprisingly bad for younger workers vs simply investing money and paying the trivial cap gains taxes.<p>On top of that it inserted 100's of billions of dumb money into the market which creates tones of opportunity's to make money using HFT etc.
I feel like everyone is inadvertently proving PG right (even though I think he's kinda wrong). His whole point is that "inequality" is too vague and broad of a term, and that we should speak specifically to things like poverty and tax evasion.
It's hard to tell if Ezra is willfully misinterpreting the essay or just didn't get it. Most concerning are:<p>1) In the entire long-winded complaint, there isn't even a mention of the primary thrust of PG's essay—while some income inequality is caused by rent-seeking and bad behavior, some is also caused by productivity inequality. Productivity is more unevenly distributed than ever, and the trend will likely become more extreme as technology advances.<p>2) Intentionally confusing the definitions of "start-up" and "small business". Despite having acknowledged the that the meaning of the term was an issue, he still plowed forward and sited "start-up" statistics that were counting all businesses, primarily small businesses.
First: <i>"Sweden, for instance, has a higher startup rate than America, and less income inequality — as do a number of other countries."</i><p>To the extend it can be measured, the metric that matters isn't the number of startups ("employer enterprise birth rate" in the Sweden link). It's the net value generated by them.<p>Second: <i>"Would anyone choose the second world?"</i><p>Yes, startup founders would. Because they can fix poverty with the value their startup generated.