The article mentions globalization but doesn't view inequality through a global lens. If you look only within rich nations, yes inequality has increased, because the poor and blue collar middle class have lost a lot of jobs to poorer countries. But that phenomenon is actually reducing inequality as measured from a global view.<p>The biggest issue I have with the article is that it ignores the geopolitical trends that were actual checks on inequality historically. Inequality typically only decreases in the face of an existential threat to the wealthy; when the US passed 90% marginal tax rates, it was to fund a war where the ability of the wealthy to remain in power at all was in question. Getting pensions and many other social democratic policies which benefit the poor and middle class, in many countries in the world, often required blood instead of the free market.
I watched an interesting interview with a billionaire a while ago, who said that after you reach a given net worth it actually becomes very hard (unless you're unlucky) to significantly diminish your wealth through consumption, and that in fact consuming more goods often just increases your net worth: Luxury cars, apartments, mansions, real estate, parks, yachts or resources like gold often appreciate in value with time (at least they did for the last 60 years), so the more of your money you spend on these goods, the richer you'll become. The words that the interviewee used were "if you're rich you can't destroy money by consumption", which is of course not 100 % true, but explains really well why the rich are getting richer.<p>In addition, many countries have much lower taxes on capital gains compared to other types of income, which is another factor that favors further concentration of money with those people that already have a lot of money.
Implementation may be politically difficult, but the solution isn't rocket science: substantially raise the inheritance tax and abolish all trust loopholes.
<i>As Kuznets determined, it was after the American Civil War that the gap between the rich and the poor began to widen.</i><p>I wonder how much of that was counting blacks in the South as <i>people</i> (after slavery was ended). During the post Civil War era, they typically made half as much as whites for the same work.<p>I read a history book years ago which, unfortunately, I can't determine the name of. The current narrative is that minimum wage laws are oppressive racist nastiness, but this book asserted that the Federal minimum wage was intended to put a stop to the practice of paying blacks half as much as whites in the Deep South so as to bring the South more in line with the rest of the nation generally.
As a mind experiment, imagine money randomly appeared in your bank account.<p>$500 - Bank error in your favour and you move on with your life.<p>$5,000 - Maybe buy you some breathing space to look for a job you prefer. Pay off a debt?<p>$50,000 - Maybe you might quit and retrain in a new career.<p>$500,000 - Maybe you'd start looking to see whether you could jack it all in and live off investments.<p>$5,000,000 - Start that business you'd always fancied, without fear of failure. Or just invest and kick back.<p>$50,000,000 - Makes more sense to invest it, and do whatever you want with the interest.<p>Yes, I've just made up those sums and outcomes - but I think it's interesting how we look at "sizes of money" and would all do wildly different things depending on the size.<p>e.g.
If you got 10x$50,000 you're not going to retrain ten times. But give $50,000 to ten people and ten people might.<p>Or 10x$5,000,000 and you might get 10 new businesses - but $50,000,000 is unlikely to create any viable ones.
As much as in theory inheritance tax is a solution for the problem, I don't think in practice it works well. The ultra rich will always have avenues to escape tax. The middle class instead, trying to secure a better future for the family, will get hit the hardest.<p>I am conflicted about this way of trying to solve the problem.<p>Also, this is assuming the tax money gets used efficiently and not to the advantage of the top earners.
> The United States was the world’s most egalitarian society.<p>Is this a joke? And slavery is mentioned indirectly, in passing, only once? You cannot discuss equality in America without discussing slavery. Not to mention the dispossession of native Americans.
Plutarch: An imbalance between rich and poor is the oldest and most fatal ailment of all republics<p>Then look at how the Romans failed during the time of the Gracci and the US succeeded during the 1930s - 65.<p>There’s a whole chapter devoted to this in the Durants’ Lessons of History.
I see people throwing ideas and most of these ideas rely on politicians and/or govt doing something.<p>Is there a non govt or non politician dependent way of solving inequality? facebook connected the world not govt or politicians. Google made knowledge and information available to the whole world not a politician or a govt. (I understand there are down sides to these companies products but so is there to govts/politicians)<p>Even as a thought experiment I would like to see some ideas here to solve inequality in way that just keeps the politician and govt out of it (cos all they do is make the common people foolishly quarrel against each other while they retain power and do what they think is right)
The problem with inheritance taxes, property taxes, etc. is that they erode the meaning of ownership and permanence.<p>For example, if I as a parent want to save up and give up my immediate gratification from spending that money so my children have a head start or even a luxurious cushion, what’s wrong with that? That’s me spending my utility the way I want.<p>With property taxes, ownership turns into renting - you never really own anything and even things you already bought can have their ownership eroded into nothing by subsequent policy.
Is the Hacker News community open to alternative viewpoints on this subject? It would be informative to read a wide spectrum of opinions, like we get for things like microprocessor design and code libraries.
Local inequality may have gone up lately, largely due to loose monetary policy driving up prices for assets which most workers do not (and choose not to) own. Such paper wealth can disappear rapidly during an asset repricing (market crash), as we can see in this graph[1]. Also, this is the result of Keynesianist monetary policy, a far cry away from the persuasions of Milton Friedman.<p>However, global inequality - especially comparing the economic classes across countries - is way down. For instance, Chinese standard of living is far higher today than in the past, as is the cost of their labor - relative to an American worker. In due time, many a Chinese worker will find themselves uncompetitive due to increased costs - much like the American worker before them.<p>What would put things back into balance is a massive global re-pricing of labor. This is politically unfavorable and those countries that maintain a reserve currency can put it off for a long time.<p>[1] <a href="https://ourworldindata.org/uploads/2018/07/Top-Incomes.png" rel="nofollow">https://ourworldindata.org/uploads/2018/07/Top-Incomes.png</a>
Why is inequality a problem if everyone else’s quality of life is improving? Poverty is lower than ever and most adults in developed countries have a smartphone, an unimaginable luxury that not even the richest could have twenty years ago. Things are good.
This is a bit dark but at a certain point I do think we’ll see assassination attempts on billionaires (not politicians) for simply being billionaires. It does feel like we’re at a point where the social fabric of rich nations is ripping due to rising wealth inequality and at a certain point the bottom will have had enough.
You can "print" unlimited amount of money but Earth resources are limited, moreover its usage is overshot (Earth Overshoot Day is 29 July 2019). So the problem is how the money is spent. We should tax money that spent to decrease Overshoot Day.