What's fair?: New theory on income inequality

"Fair" is an ethical value judgement.

Income Disparity is one of many metrics for evaluating societal stability.

This study looks at just this one metric and suggests that if we address this one thing, that societies will be better off. But this is Just. One. Metric.

Others such as stability of institutions, trade balance, environmental stewardship, population growth, civil rights, and many other things also factor in.

I must comment that the Scandinavian countries are using plan economy, which is between market economy and socialistic economy. The "invisible glove" of Adam Smith does thus not really apply to these countries. Though a free market economy worked well while we had abundance of mostly everything, it will now increasingly be replaced with plan economy today as regulations are increasingly required (such as endangered species, combating pollution, combating poverty etc).

How the Scandinavian countries did get a "fairer" balance in salaries was for instance was by passing strict minimum wage regulations, strict regulation of number of work hours and workdays, strict rules for employer responsibilities in relation with dangerous work and so on.

I forgot a very important regulation: progressive tax regulations! For minimum wages there are hardly any tax at all, up to and even above 50% income taxes for everything earned beyond certain amounts. But this is all plan economy regulations - no free market here!

Don't say Scandinavian society, say Scandinavian culture which also manifests in ethnic Scandinavian communities in the USA.
Now the Scandinavian countries are losing their Scandinavian culture as immigrants are NOT assimilating, do not have the work ethic and do not have any guilt for taking welfare.
For insight into the Scandinavian culture look up Jante's Law.

no free market here!

Sweden repealed its wealth tax to keep their wealthy from leaving the country.

Wealth tax and income tax are two different things! Sweden still have progressive income tax. But yes, wealth tax is a balance tax which indeed will cause wealth to increase within "important" families.

wealth tax is a balance tax which indeed will cause wealth to increase within "important" families.

Wealth tax plunders wealth. How does this increase wealth in 'important' families?

Adam Smith's "invisible hand" is referenced, but there is no reference to his discussions of ehtics in the later volumes. Adam Smith was an ethicist, not an economist. In as much, he discusses topics such as the requirements to help those in need, war and war mongers, the opulent and their spending habits, including bridges to no where. Just wonder if Venkatasubramanian has read the book cover to cover, as most economists have not.

no free market here!

Sweden repealed its wealth tax to keep their wealthy from leaving the country.

BS. That is a piece of crap propoganda directly from far right wing CATO institute and every other right wing republican group trying to make the case for an oligarchy run plutocracy.

wealth tax is a balance tax which indeed will cause wealth to increase within "important" families.

Wealth tax plunders wealth. How does this increase wealth in 'important' families?

Again BS! In your dreams does a Wealth tax plunder wealth. It simply makes the rich pay their fair share. They still are wealthy, but they should pay for and be thankful that their country could provide them with the opportunity to make such wealth.

Let me remind @R2 what Krugman (2002) say about Sweden and it's system.

http://spot.color...dle.html

I don't think this should even be on scientific site. It is blatant misuse and misinterpretation of statistics. Most "fair" and egalitarian society according to the above criteria was Mao China. Chairman made the same money as anybody else and live in the same standard like most. Swedes had 110% tax above certain income and financed welfare state by smuggling technology between east and west and hence their economy collapsed in early nineties. It means nothing. If society values money, consumerism, brutality and elitism above all and in any form it is deeply unfair and unjust.

Swiss activists felt that CEOs shouldn't make more in a month than what their lowest employees made in a year.

That is an approach that seems sensible at first, but would just lead to companies splitting off the management into a dedicated management company (where the 'lowest paid employee' has a quite high salary so that the CEO could keep his current, enormous salary.

This study looks at just this one metric and suggests that if we address this one thing, that societies will be better off. But this is Just. One. Metric.

They say better off - not off 'optimally'. If you address one metric at a time - how does that not lead to a better society?

Given the authors' (of the study) insistence on claiming they are measuring "fairness", along with the absurd notion that Scandinavian countries are closest to a free market, I have to question everything else. Don't get me wrong, I am very much in favor of progressive policies that are socialistic where appropriate and capitalistic where appropriate, but I bristle at the term "fairness", even when used by Bernie Sanders who I like. Fairness is either defined as following the rules and applying standards consistently, following the spirit of the rules, or simply by one's own values. In the first case you can explicitly state whether something is fair based on evidence and logic, and you can at least make an argument and get close in the second case, but in the third case it's a crapshoot.

As for the free market, it's time we all agreed that such a thing only exists with proper government regulation. However both corruption and natural free market dynamics will disrupt free markets.

progressive policies that are socialistic where appropriate

Where is this appropriate?

As for the free market, it's time we all agreed that such a thing only exists with proper government regulation.

Why should I agree?

Free markets are regulated by competition and consumers. The ONLY legitimate role for a govt is to protect private property rights for everyone.

"Income inequality" is merely a natural consequence of a free and market driven society.

The notion that it is even a valid political issue in a society that values freedom and liberty, is a massive fraud of liberals, designed to capitalize on the emotional envy of the ignorant. Despicable.

No one wants to live in a society were everyone is forced to be equal, when they are not equal.

wealth tax is a balance tax which indeed will cause wealth to increase within "important" families.

Wealth tax plunders wealth. How does this increase wealth in 'important' families?

Again BS! In your dreams does a Wealth tax plunder wealth. It simply makes the rich pay their fair share.

The top 5% income earners pay over 50% of income taxes. The top 10% income earners pay over 70% of income taxes. These facts show that the typical left-wing bed-wetter's use of the word "fair" is not only disgusting in the context of a free society, but also an abject fraud.

What also is not considered by the emotionally driven left, is the fact that "the rich" provide the most jobs in the market place through their investments,... In addition to their contribution to the economy through consumption.

The leftist ideology has failed so they invent the fallacy of "fairness".

Yeah, right. Let's look at things from the point of view of a company owner, either a stockholder or majority owner. Where do they want to set executive salaries?

The first issue is that any salary low enough to make the executive spend time dealing with personal money issues is right out. When buying an executive's time and abilities, forcing them waste (mental or emotional) effort on other issues is silly.

Second encouraging executives to any kind of peculation, from expense account padding to nepotism, is again, not something you want to do.

Finally, for most executives, a 10% or even 100% pay raise is chump change if it increases the company's profits by 1%. This is why most executive pay packages start with a high base pay, and provide lots of incentives to increase the company's sales, profits, and stock price.

In other words, the people who set executive salaries, and often with stock options, that includes most employees, don't think about economic fairness.

Actually the Scandinavian countries aren't that socialist - and Finland is actually more economically free than the United States: http://www.fraser...2014.pdf

‪#‎IncomeInequality‬ What's Fair (& Efficient)? What's Natural (& Not):
This is a new ‪#‎Asynsis‬ ‪#‎NashEquilibrium‬ ‪#‎Criticality‬ theory - all part of a new #Universality ToE.
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#Asynsis #DaoOfDesign on #TED at #TEDxWanchai #HongKong.

A New, Extremely Lean, Mean (#Design) #TheoryOfEverything
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The top 5% income earners pay over 50% of income taxes.

That's completely irrelevant. Fair is a term which is required for long term stability.
Even if the top 5% pay more than 50% ofthe taxes - if they still get proportionally richer than everyone else then it's rather trivial to see that that is not a system that can be stable over the long-term.

Because in the end all the money will end up with the top 5% in such a system...which will mean nothing short of slavery for the bottom 95%

Fairness must see to it that a viable distribution is not exceeded. This does not mean that everybody must have the same means. It just means that the ratio between top and bottom remains stable at a level where the bottom earners aren't below the poverty line.

Most people believe fairness is when people are allowed to keep what they earn.

Scandinavian society and others use social pressure to shame those who would take welfare and live off others.
When the state turns that shame into an entitlement, 'fairness' vanishes.

The gap between the rich and poor has grown immensely during the past 6 years. Why? Quantitative Easing, which pumps money into the stock and bond markets, making rich investors and brokers 5 times richer than they were before Obama's administration took control of the economy.

The gap between the rich and poor has grown immensely during the past 6 years. Why? Quantitative Easing, which pumps money into the stock and bond markets, making rich investors and brokers 5 times richer than they were before Obama's administration took control of the economy.

And this is ALL socialist/fascist economics, not free market capitalist economics.

FTA:

Income inequality was identified as the #1 Top 10 Challenging Trends at the 2015 World Economic Forum annual meeting in Davos last January.

Let me get this right. The elite of the elite, who set (or at least strongly influence) global economic policies, meet in Davos and conclude that the inequality is the most challenging "trend"? When we get sheared, they're the one setting the blade length. They (collectively) are the drivers of this inequality. If they were to be honest, they'd admit that they aren't concerned that the sheep is being sheared too closely, or even if it gets skinned in the process -what they're really asking is: "how much longer before we end up in guillotines?"

"Fairness" is a red herring. Its only meant to distract the herd from the fact that our governments are bought off. If you need any more proof, look at the TTP bill.

our governments are bought off.

Increasing the size and scope of the govt increases the opportunity for graft and corruption.
Why do so many have faith that more regulation and more govt will 'fix' it?

Abolish the minimum wage.
Cut tax rates.
Starve the state.

Few here will support the only effective solution.

The top 5% income earners pay over 50% of income taxes.

That's completely irrelevant. Fair is a term which is required for long term stability.
[....]

Because in the end all the money will end up with the top 5% in such a system...which will mean nothing short of slavery for the bottom 95%

That reasoning is a fallacy. You (and bed wetting liberals) seem to be under the impression that there is a finite amount of wealth that "should get distributed "fairly"'. That's not how economies work, as anyone can see by looking at graph of GDP over time, wealth is Created. It never was static.

The subjective term "fairness" is appropriate when speaking to your kids, but categorically not appropriate to force that subjectivity upon adults in a free market free society. The only thing "fair" about competition and egoistic motives intrinsic to human behavior, is that it not be oppressed.

there is a finite amount of wealth that "should get distributed "fairly"'.

No. But it is pretty trivail to see that in a finite economy - if one side has 99.99999% of the wealth (which happens if the discrepancies get _proportionally_ larger) that the amount of wealth that is still with the rest of the people won't be enough to buy a bagle.

To spell it out: People who sell products (be it food, living space, services or luxuriies) are aiming not to be poor. Therefore they must raise prices to the point where the money generated does allow them to live above the poverty line. If you drop all the people (except the few super rich) below the poverty line by disproportionate distribution of wealth then they can only demand prices that only the super rich can afford to achieve this goal.

This has nothing to do with wanting 'commuism' or somesuch. This is just common sense thinking.

Therefore they must raise prices to the point where the money generated does allow them to live above the poverty line.

They must make a profit or go out of business.
But the govt FORCES costs, like minimum wages, health care, ....on to those prices making the cost of the product uncompetitive.

End the regulatory state control of private property including minimum wage laws, forced benefits, etc.

People who sell products (be it food, living space, services or luxuriies) are aiming not to be poor. Therefore they must raise prices to the point where the money generated does allow them to live above the poverty line. If you drop all the people (except the few super rich) below the poverty line by disproportionate distribution of wealth then they can only demand prices that only the super rich can afford to achieve this goal.

??? I'm not following you.

The USA economy is massively strong even in a relative recession. The vast majority of people live very comfortably in the USA, and even the 15% living at the "poverty level" have wide screen tv's, air conditioning, cars, and cell phones,.... IOW even where the wealth is the most disproportionate, it clearly is sustainable to everyones benefit.

Again, wealth (in a free capitalist society) is not nor ever was "distributed", therefore the attempted application of "fairness" wrt wealth is an abject fraud.

Greed will kill us.

Capitalism is organized greed. And folk like Noum think others live like him, on his money, a sure sign of conceptual problems, and lack of current knowledge.

... The market decides incomes based on Objective Value as a Natural consequence of freedom,.... not mush-headed bed-wetting subjective and ad-hoc emotional drivel like "fairness".

We just saw the market crash of 2008 due for the most part to government lowering lending standards to "fix" the "unfairness" of lack of home ownership. That is what happens when inappropriately subjective feelings like "fairness" are interjected into hard economic reality.

Capitalism is organized greed. And folk like Noum think others live like him, on his money, a sure sign of conceptual problems, and lack of current knowledge.

Free Capitalism works resoundingly well to lift everyones standard of living, inarguably, because it takes advantage of what is intrinsic to human nature,... egoism, not altruism. Only half-wits equate egoism with greed.

"I believe deeply that the free market is the greatest force for economic progress in human history." - Obama

Even Obama can not deny this fact of history.

"We just saw the market crash of 2008 due for the most part to government lowering lending standards to "fix" the "unfairness" of lack of home ownership."
--------------------------------------
So, . . you did not like the Bush "Ownership Society"?

Did you complain at the time?

"We just saw the market crash of 2008 due for the most part to government lowering lending standards to "fix" the "unfairness" of lack of home ownership."
--------------------------------------
So, . . you did not like the Bush "Ownership Society"?

Did you complain at the time?

At one time Bush bragged about the increase in home ownership, ,.... but eventually sent memo's warning about the impending dark clouds. Ultimately it was government do-gooder bs, thats the point.

Nope, he did something, . . and it ruined us, just like Wall Street and the Bush Wars, all not paid for at all, just dumped on the National Debt!

When are you conservatives going to PAY for your brutal bloody and costly Bush Wars and Mass Killings of civilians who had done nothing to us?

When are you conservatives going to PAY for your brutal bloody and costly Bush Wars ?

Nearly all prominent democrats voted for that (justified) war,.... do I have to lists their names again?

and Mass Killings of civilians who had done nothing to us

Despicable lie, not that I expect much better from you.

Why are ISIS running feral in the middle east right now slaughtering people? Answer: Obama artificially ended the war and pulled troops out.

The Democras let youdo it, after youset up the Office of Special plans in the Pentagon to feed Bush what he wanted to hear?

Did you know about Doug Fieth and that office, and how they were put there to lie to the goobers, and goad them into the Bush Mass Killings for Oil? I knew about it, having been warned by the true professionals there like Col Kwiatkowski.

Why didn't you?

As for ISIS, they told us themselves - it was getting together in the prison camps that led to their organization, . .the Bush Prison Camps, where they were tortured. Want the references? You will not like them.

... and what is so egregious about that [Obama's foreign policy in middle east] is that his incompetence effectively undid everything the western powers achieved in those countries, and worse handed influence to Iran. It's actually shocking.

Bush Mass Killings for Oil...... Bush Prison Camps, where they were tortured

Piss off, troll.

"Piss off, troll."
------------------------------------

That is the kind of response I expected from real trolls, unable to debate an issue.

Noum wants more war in Iraq. Let's send him!!

Those of us who already served in war know better than the stay-at-home "patriots" like this guy and otto.

I dunno. I would like to have one of these
http://www.huffin...674.html

-Is that so wrong?

With fully-automated AI robotic manufacturing, more of us can have stuff like this for a lot less money.

But that would mean that my crew members could all earn enough to own one, and then who would I get to sail by boat?

Ah I know - fully-automated AI robots.

this guy and otto

Piss off, lying, smelly little troll.

Not very imaginative, otto.

No wonder you had to resort to being an anonymous internet sniper, playing "games".

Bush Mass Killings for Oil...... Bush Prison Camps, where they were tortured

Piss off, troll.

That is the kind of response I expected from real trolls, unable to debate an issue.

It's pointless to debate someone who will just say anything,... thus my response.

Here, eat this:

http://news.yahoo...YwNzcg--

and this:
http://www.thegua...e_btn_tw

Free Capitalism works resoundingly well

Even communists know this as they must resort to capitalism when their socialism fails.

Here, eat this:

http://news.yahoo...YwNzcg--

So what. What's your point? They were in prison, should they have been executed instead? How does that relate to your despicable lies above? All it shows is that the blame America leftists will convolute anything into being "America's fault".

You (and bed wetting liberals) seem to be under the impression that there is a finite amount of wealth that "should get distributed "fairly"'. That's not how economies work, as anyone can see by looking at graph of GDP over time, wealth is Created. It never was static.

At any given point in time, the amount of wealth in the economy is finite, and the question is about the distribution of that amount, whether or not there will be more or less wealth in the system in the future.

Not all growth in GDP is due to creation of new wealth that would justify the rich getting richer. The GDP simply measures how fast money or things measured in money go around, regardless of what is being done to make that money move. The GDP grows in all cases: when wealth is created and when wealth is consumed, and when wealth is transferred from person to person - from poor to rich or rich to poor.

Pointing to GDP growth as "productivity" is the great neoclassical fallacy.

A fraudulent example of "income inequality" touted by liberals is the disparity in income between women and men,.... and between whites and minorities.

If this were true, then it would be in the best interest of companies to hire only women and minorities,... after-all if they could pay less money for the same quality of work performed.

The next presidential campaign of dumicrats will tout this fraud of "income inequality" ....knowing full well that they can't do anything about it. They'll just pass some useless bill making it easier for people to sue or something insignificant like that. It's all about getting votes by using the envy and ignorance of their base,.... which the left constantly admit to.

At any given point in time, the amount of wealth in the economy is finite,

And it is constantly changing, every second, Being destroyed by the govt when it can or increasing when the govt misses some opportunity to destroy more wealth.

New wealth is created every second the sun shines on the earth.

should get distributed "fairly"'

"Fairness" in a society is simply everyone looking after themselves: trying to find an optimum where they maximize their personal income against the interest of others.

Nobody has fundamentally any more claim to wealth than anyone else, which is why historically the rich have justified their wealth by God, then by class/caste or race, and then entering the modern neoclassical market economies - "because I can - therefore I should".

But you see there lies the problem: any distribution of wealth is "fair" as long as the people agree it is, and the people at large simply don't agree that 5% of the population should gain all of the wealth without really contributing to the making of it.

If this were true, then it would be in the best interest of companies to hire only women and minorities,... after-all if they could pay less money for the same quality of work performed.

That's a good point, but unfortunately off the mark because the gender/race issue is not directly related to the general disparity between the income classes.

And blatant racism doesn't consider the cheapness of labor the main objective, but rather "keeping it in the family", i.e. giving more money to your own kind as a principle and hiring your own kind before the other kind, which results in the wage gap.

If the market was acting completely rationally, then any attempt at differential treatment would simply lead to more blacks or women being hired because they'd become cheaper to, but people aren't being rational and that's the point.

If the advocates of 'fairness' are to be believed, they must support the FAIR tax.
Else they are just your typical communist/socialist/fascist.

" How much we earn is none of the federal government's business."
"The federal government shouldn't be dictating behavior."
"Our work should not be penalized."
"A consumption tax would be blind. "
"A consumption tax is the path to smaller government. "
https://fairtax.o...-FAIRtax

Pointing to GDP growth as "productivity" is the great neoclassical fallacy.

I never mentioned "productivity", I referenced the creation of wealth (economic growth), a key measure of which is GDP.

The political left advocate redistribution of wealth via government social engineering (income inequality grievance industry) and central planning to "fix" non-problems that they themselves invented,.... yet gov is not competent to create wealth in the first place, as the free market is,.... so wealth inequality is simply an acceptable consequence of maintaining freedom, liberty, and "the greatest force for economic progress in human history".

"Fairness" in a society is simply everyone looking after themselves: trying to find an optimum where they maximize their personal income against the interest of others.

This is intrinsic to natural human behaviour, and therefore is as it should be; it is the key mechanism behind the resounding success of capitalism. The oppression of the natural instinct of egoism is the epitome of unfairness.

But you see there lies the problem: any distribution of wealth is "fair" as long as the people agree it is, and the people at large simply don't agree that 5% of the population should gain all of the wealth without really contributing to the making of it.

5% of the population don't have "all the wealth". Of course the rich contribute to the creation of wealth, or they become rich by doing so. The people at large value their own freedom to become better off more so than their envy of the few, pollutes their judgement.

If the advocates of 'fairness' are to be believed, they must support the FAIR tax.

I do advocate a flat tax instead of a progressive one. I think it's fair.

I never mentioned "productivity", I referenced the creation of wealth (economic growth), a key measure of which is GDP.

And there you are wrong. The GDP grows simply by printing more money and shuffling it from pocket to pocket: it doesn't measure how much actual wealth is being produced or consumed.

so wealth inequality is simply an acceptable consequence of maintaining freedom, liberty, and "the greatest force for economic progress in human history".

Even at the expense of a dysfunctional society?

Yours is an argument by people who are essentially trying to justify their own accumulation of wealth by the maxim, whatever you can grab is yours to take. The "socialist" argument is that this is simply not the most productive way to make a living.

This is intrinsic to natural human behaviour, and therefore is as it should be;

That's the naturalistic fallacy.

But, as it is so nevertheless and there's little one can do about it, the question turns to what sort of behaviour actually does maximize your personal income in general.

5% of the population don't have "all the wealth".

Indeed. They only have something like 80-90% of it, but that hardly changes the argument: the whole society would be more productive in real terms if the wealth distribution was more even.

The accumulation of wealth to the few keeps the means of production away from the rest, which means real productivity decreases. The opposite case is when wealth is too diffused so that nobody can really do anything. There must be an optimum distribution of wealth where the society is at its maximum output in terms of wealth, and it's not when people are simply grabbing whatever they can.

If this were true, then it would be in the best interest of companies to hire only women and minorities,... after-all if they could pay less money for the same quality of work performed.

And blatant racism doesn't consider the cheapness of labor the main objective, but rather "keeping it in the family", i.e. giving more money to your own kind as a principle and hiring your own kind before the other kind, which results in the wage gap.

The example of industrialized slavery categorically refutes that notion.

If the market was acting completely rationally, then any attempt at differential treatment would simply lead to more blacks or women being hired because they'd become cheaper to, but people aren't being rational and that's the point.

A structural foundation of the liberal grievance industry is untenable conspiracy theory. Instead what is the key element in free market is Value and competition. Liberals just don't like the results.

Think of a corporation for example: a company that spends half its profits paying its CEO is worse off in terms of competition against companies that spend the money on R&D and investments instead. The CEO is essentially locking away resources from the company by holding them at his personal disposal, and he himself is probably less competent at re-investing them than the company itself with its multitude of experts.

In this way the accumulation of wealth to the few leads to greater waste and worse decisions.

One would think such companies can't exist, but since the world is full of greedy people, a company that does get ahead by paying its management less is bound to find itself bought by someone who sees the high profit margin and figures he can pay himself half of it.

It's usually the people who pay themselves a dollar who build the company, and the ones who pay themselves a million who destroy the company.

so wealth inequality is simply an acceptable consequence of maintaining freedom, liberty, and "the greatest force for economic progress in human history".

Even at the expense of a dysfunctional society?

What dysfunctional society? Liberals must invent social issues in order to sell their agenda, just as all the grievance industry is based on fraud.

Yours is an argument by people who are essentially trying to justify their own accumulation of wealth by the maxim, whatever you can grab is yours to take. The "socialist" argument is that this is simply not the most productive way to make a living.

Socialist central planning by 'social injustice' would never have had created an average standard of living that 'free' capitalism has in fact created. Only now that capitalism has done the hard work do the left try to "fix" what it not broken.

The example of industrialized slavery categorically refutes that notion.

Explain.

A structural foundation of the liberal grievance industry is untenable conspiracy theory. Instead what is the key element in free market is Value and competition. Liberals just don't like the results.

Could you rephrase that in plain english?

What dysfunctional society?

A society that is increasingly unable to feed its members, where real productivity and the creation of new wealth remains stagnant despite population growth because some insist on having everything to themselves.

The social dysfunction we're having is essentially like a bucket of crabs, where some think they're getting up because they're seeing others tumbling down, while the whole population is just stuck at the bottom.

A society that is increasingly unable to feed its members,

It is NOT the responsibility of 'society' to feed everyone.

But there is NO shortage of food. Only a shortage of liberty to purchase that food.

the whole population is just stuck at the bottom.

Thanks to socialists.

[GDP] doesn't measure how much actual wealth is being produced or consumed.

You can look up "economy growth" and GDP will invariably be mentioned as a measure, albeit not the only indicator.

Indeed. They only have something like 80-90% of it, but that hardly changes the argument: the whole society would be more productive in real terms if the wealth distribution was more even.

Only superficially to the extent of pulling off a political fraud short term would any artificial redistribution of wealth make any difference.

Wealth and Value are like water finding its way down a mountain, it will level out and make the right path in the end,.. it does lie,....

If by socialist law, pay rate was multiplied by ten for everyone tomorrow,... ultimately it would make zero difference to anyone, it would only change the numerical exchange of money while leaving the core Value in the market place unchanged.

Continuing with the analogy of the corporation:

A company is demonstratably better served by a CEO that doesn't demand an exceedingly high wage or millions in bonuses, and in the same way a society is better served and more prosperous by not maintaining very rich rich people.

There are examples of prosperous co-op corporations, like Mondragon, that democratically limit the pay of the top execs to 5-7 times the pay of the lowest worker, and they remain in business through economic turmoils and against competition because they become very rich as a result of not letting the money bleed out. It's a win-win situation for everyone involved, and not just the few sitting at the top.

This is not socialism or communism in the Soviet Union sense of the word. They're not trying to level the playing field for everyone, but instead simply survive in the market by figuring out what's the optimal way to distribute wealth among themselves.

It is NOT the responsibility of 'society' to feed everyone.

Society is its people, so what you're saying is that the people have no and should not have responsibility towards themselves. What you're describing is a madhouse.

The society is people who are by circumstances forced to exist together, and they can choose to work together or work only for themselves. The market mechanism doesn't in any ways guarantee any particular outcome in this situation.

Wealth and Value are like water finding its way down a mountain, it will level out and make the right path in the end,.. it does lie,....

There is no "mountain" or "right path" here. The way the wealth settles is unstable, because it depends on what the people believe and how they act at any particular time and place. If people believe the best way to become prosperous is to bullshit and stab someone in the back, then wealth will collect upstream to the one who's the best bullshitter and backstabber.

And blatant racism doesn't consider the cheapness of labor the main objective, but rather "keeping it in the family", i.e. giving more money to your own kind as a principle and hiring your own kind before the other kind, which results in the wage gap.

The example of industrialized slavery categorically refutes that notion.

Explain.

Really?! I have to explain that?

Clearly slavery was racism,... yet clearly its motivation was cheap labour for industry. You're simply factually wrong on that point.

A racist business owner will hire a minority if it's in his best interest to do so,...

Sounds like Noum is one of the very few who actually read the seminal work of Ayn Rand, "The Virtue of Selfishness".

I am not kidding. Look it up and read it. I did.

Really?! I have to explain that?

Yes. You do have to explain concepts and arguments that aren't widely known or accepted, rather than just refer to them.

A racist business owner will hire a minority if it's in his best interest to do so,...

Technically, they weren't hiring anybody. They were forcing people to work. Hiring would imply the worker has the power to decline employment if the terms and conditions don't suit him.

Slavery was not about "giving work to minorities", but about using them as a resource. A plantation owner didn't have a line of white people lining up asking for a job, because the whites didn't want to do that work - they wanted the sugar and the cotton at minimum cost.

So you're really talking apples to oranges.

A racist business owner would, when two people line up for the same job, hire the one of his own kind despite the other being cheaper, because he values his race more. That's what racism means.

A structural foundation of the liberal grievance industry is untenable conspiracy theory. Instead what is the key element in free market is Value and competition. Liberals just don't like the results.

Could you rephrase that in plain english?

The notion of "income inequality" as a "social injustice" in the market place presumes a conspiracy theory,.... that some injustice is levelled against women and minorities despite them being of equal Value,..... rather than that it's an economically natural result of not successfully competing and being of equal Value in the market place.

Now WHY, that result may be so, could certainly be in part due to historical circumstances, including racial injustices. But that is not a defect in the structure of the free market itself.

The notion of "income inequality" as a "social injustice" presumes a conspiracy theory,....

The notion if income inequality presumes simply that some people have a higher income than others. It's a plainly measurable and objective metric that has no conspiracy involved.

that some injustice was levelled against women and minorities despite them being of equal value,..... rather than that it's an economically natural result of not successfully competing and being of equal value in the market place.

You're presuming that the market actually is operating in a perfectly rational manner, which isn't the case. To operate perfectly rationally, every agent on the market must have all the relevant information, which is demonstratably and even in principle not possible in the real world.

There's no conspiracy to claim that women aren't getting paid as much because people still believe they're not worth it. Whether that's demostrated to be true is a different case.

" . . . rather than that it's an economically natural result of not successfully competing and being of equal value in the market place"
----------------------------------------

My god, everything translates into money for you, doesn't it?

How much is your mother worth?

A company is demonstratably better served by a CEO that doesn't demand an exceedingly high wage or millions in bonuses, and in the same way a society is better served and more prosperous by not maintaining very rich rich people.

Then why does the board of directors and investors of companies, of whom it is in their direct benefit, freely choose pay 'exceeding' amounts? It can only be because that is what attracts the best CEO talent,.... i.e. a CEO market exists.

EDIT: " it will level out and make the right path in the end,.. it [doesn't] lie,...."

Now WHY, that result may be so, could certainly be in part due to historical circumstances, including racial injustices. But that is not a defect in the structure of the free market itself.

I agree.

The problem here is in you assuming that we actually have a free market, even in principle, and therefore anything that is happening is simply the natural course of actions which is what should happen, and can only be "perverted" by trying to exert any sort of social control over it.

That describes two logical fallacies: begging the question and the is-ought problem.

There's actually three aspects to the question which have absolutely nothing whatsoever to do with one another.

1: the model or ideal of the free market

2: the real market, or what is actually happening right now

3: the ideal market of what we collectively or individually wish should be happening right now.

None of those actually follow from one another, yet it's very common to confuse at least two, and with people who read Ayn Rand it's very common to confuse all three.

There is no "mountain" or "right path" here. The way the wealth settles is unstable, because it depends on what the people believe and how they act at any particular time and place.

Wait,.. you put forward the notion that as an example, a country of 300 million people with an unemployment rate of less than 10%, maintaining a high standard of living, who's economic strength is based on at least a pseudo-free market, is unstable despite quantifiable facts to the contrary ,.... yet believe that open deceit and fraud IS stable in the market place?........

If people believe the best way to become prosperous is to bullshit and stab someone in the back, then wealth will collect upstream to the one who's the best bullshitter and backstabber.

Then why does the board of directors and investors of companies, of whom it is in their direct benefit, freely choose pay 'exceeding' amounts? It can only be because that is what attracts the best CEO talent,.... i.e. a CEO market exists.

You're assuming that the investors and directors are competent and perfectly informed in evaluating best CEO talent.

In reality there's no reliable way to measure who's a good CEO, and who's just lucky. Other motives may apply as well, such as hostile takeovers. In other cases, the number of people who own stock in a company is just so large that they have no effective infrastructure to control it any longer, and a small number of self-serving people can rise to the top.

Noum dodged my question:

"My god, everything translates into money for you, doesn't it? How much is your mother worth?"

Sounds like Noum is one of the very few who actually read the seminal work of Ayn Rand, "The Virtue of Selfishness".

I am not kidding. Look it up and read it. I did.

It's not a moral judgement but the mechanism of actual human behaviour, egoism. Look up game theory in economics, evolution, for example.

Wait,.. you put forward the notion that as an example, a country of 300 million people with an unemployment rate of less than 10%, maintaining a high standard of living, who's economic strength is based on at least a pseudo-free market, is unstable despite quantifiable facts to the contrary

I don't agree with your assesment of the situation.

The real unemployment figures in the US are now closer to 16% and the economy is in a downward spiral towards unproductive "services" with no increase in manufacturing since the 1970s while the income disparity keeps growing year after year. The healthcare system is inefficient and compares badly to just about every other developed nation, and many undeveloped ones, and the relative poverty and crime rates are consistently worse than any OECD nation.

The whole nation is crumbling.

,.... yet believe that open deceit and fraud IS stable in the market place?........

What exactly do you mean with that?

It's not a moral judgement but the mechanism of actual human behaviour, egoism. Look up game theory in economics, evolution, for example.

Rand did put it forward as a moral judgement.

Game theory has already been superceded by the notion of superrationality:

http://en.wikiped...ionality

Superrational thinkers, by recursive definition, include in their calculations the fact that they are in a group of superrational thinkers.

It's the simple idea that you can make more optimal decisions by thinking about what the other guy is probably thinking, or taking the social aspect of society into account. It works much better in describing reality than what Rand ever managed.

How many of you have read the seminal piece by Ayn Rand, "The Virtue of Selfishness"? You cannot discuss that cursed woman without it.

Unlike her mind-numbing tomes, it is refreshingly sort. It sort of explains why she gave away all her money to a right-wing extremist group, and lived off us US, on WELFARE!

A plantation owner didn't have a line of white people lining up asking for a job, because the whites didn't want to do that work - they wanted the sugar and the cotton at minimum costs

That's not the reason. Before slavery as pursued by the west, the primary form of industry was still agrarian,.... so obviously the only reason a farm owner "didn't have a line of white people lining up asking for a job" was because by then they found it economically beneficial to invest in slave ownership and maintenance, which was cheaper than hiring "whites" then.

A racist business owner would, when two people line up for the same job, hire the one of his own kind despite the other being cheaper, because he values his race more. That's what racism means.

The example of slavery resoundingly refutes that claim as a generality. And that they didn't pay them is splitting hairs,... they bought and 'maintained' them using money.

The society is people who are by circumstances forced to exist together

BS

Society is its people, so what you're saying is that the people have no and should not have responsibility towards themselves.

People have responsibility for themselves.

Noum dodged my question:

"My god, everything translates into money for you, doesn't it? How much is your mother worth?"

Well, the subject matter is economics. Have you not been paying attention? And everything I own I earned.

That's not the reason. Before slavery as pursued by the west, the primary form of industry was still agrarian,.... so obviously the only reason a farm owner "didn't have a line of white people lining up asking for a job" was because by then they found it economically beneficial to invest in slave ownership and maintenance, which was cheaper than hiring "whites" then.

Actually, before they invested in black african slaves, they were using white slavery. The Irish for example.

The whole question of slavery has nothing to do with hiring practices. The conditions in the new world slave plantations and colonies were horrible and people already had jobs where they were, so the only way to get workforce over there was to enslave people. Otherwise the prices of the products would have been uncompetetive.

"The society is people who are by circumstances forced to exist together"
BS

If you can't agree with that definition, then we have nothing to agree on.

"Well, the subject matter is economics. Have you not been paying attention?"
----------------------------------

Yes, I have. You said:
"The notion of "income inequality" as a "social injustice" in the market place presumes a conspiracy theory,.... that some injustice is levelled against women and minorities despite them being of equal Value,..... rather than that it's an economically natural result of not successfully competing and being of equal Value in the market place."
---------------------------------

"Equal value" in the marketplace?

How much is your mother worth "in the marketplace", where you put her?

People have responsibility for themselves.

And in doing so, responsibility towards others, because you exist among other people who in turn influence your existence by your behaviour torwards them. In other words, to fill your responsibility towards yourself you must act in ways that takes into account the responsibilities of others towards themselves. This is what a society means.

But since you agree among yourself that this is not the case, then we have nothing to discuss about. Your philosophical position amounts to solipsism, in which case the whole discourse about economies and social justice is void: there exists only you anyhow.

It's not a moral judgement but the mechanism of actual human behaviour, egoism. Look up game theory in economics, evolution, for example.

Rand did put it forward as a moral judgement.

Not in the sense in which gkam quotes the title out of context (a book I did not read btw). She equated 'egoism as a morality of the highest order', not on subjective grounds of 'doing the right thing' but rather because egoism is intrinsic to human behaviour.

Read the book, Noum, before you tell us what is in it.

I read it. Are you impressed how she was true to Selfishness and lived off of us, after she got rich?

She equated 'egoism as a morality of the highest order', not on subjective grounds of 'doing the right thing' but rather because egoism is intrinsic to human behaviour.

Which is the naturalistic fallacy again.

Egoism doesn't describe real human behaviour very well at all anyhow. It describes the behaviour of some people very well, though.

It's not a moral judgement but the mechanism of actual human behaviour, egoism. Look up game theory in economics, evolution, for example.

Rand did put it forward as a moral judgement.

Game theory has already been superceded by the notion of superrationality:

A moral judgement out of necessity given the nature of man,... not one out of subjective feelings. In this sense it is similar to Kant's categorical imperative, of which according to your link, superrationality is a form.

Egoism doesn't describe real human behaviour very well at all anyhow. It describes the behaviour of some people very well, though.

Again, your thinking of it in terms of subjective morality,... and not of an intrinsic behaviour of seeking ones own benefit and preservation.

Noum, are you impressed how Ayn Rand was true to her philosophy of selfishness as a virtue when she parasited off of us after she got rich?

Her philosophy wasn't of about selfishness. That's your superficial understanding.

Noum, are you impressed how Ayn Rand was true to her philosophy of selfishness as a virtue when she parasited off of us after she got rich?

She answered that charge while still alive. Why shouldn't she seek her own best interests and not make use of a system she paid into as a citizen? I think the USA postal service should be abolished, but doesn't mean I'm a hypocrite if I decided to check my box.

"Well, the subject matter is economics. Have you not been paying attention?"
----------------------------------

Yes, I have. You said:
"The notion of "income inequality" as a "social injustice" in the market place presumes a conspiracy theory,.... that some injustice is levelled against women and minorities despite them being of equal Value,..... rather than that it's an economically natural result of not successfully competing and being of equal Value in the market place."
---------------------------------

"Equal value" in the marketplace?

How much is your mother worth "in the marketplace", where you put her?

???

A moral judgement out of necessity given the nature of man,... not one out of subjective feelings.

That's a meaningless statement. There is no such thing as a necessary moral judgement without defining a purpose for the whole of existence. You're claiming that you have found an objective way to determine what should be from what happens to be, which requires quite a bit of faith to accept.

In this sense it is similar to Kant's categorical imperative, of which according to your link, superrationality is a form.

Ayn Rand's musings are far removed from Kant's. The categorical imperative is an attempt to explain where morality comes from, and not what morality is. It's a question of what you should do if you wish to achieve certain ends, whereas Rand's ramblings are about lifting egoism as the prime moral virtue without any logical justification.

Again, your thinking of it in terms of subjective morality

There is nothing but.

and not of an intrinsic behaviour of seeking ones own benefit and preservation.

That could be just as well re-written as "subjective morality", because what defines any individual's morality is what they want to achieve in life, whether that's their biological or philosophical or social imperative.

Even self-preservation is not a necessary choice.

Any way you put it, you have no morality except what is subjective to your own ends, and in order to fullfil those ends you need to take into account the ends of others whatever they may be, thereby making all morality a bargain of different ends and means to get there.

Read the book, Noum!

So, the question becomes, what is the point of the free market?

Is it to make you wealthy, or make everybody wealthy?

If it's just to make you wealthy, then we can permit all tricks and cheats and just call it a fair game because everyone's free to do it. Caveat emptor and so-on. Problem is, it applies equally back to you, so while you cheat, you get cheated on and it's really a zero sum game. This is what the Randian free market does - except not in reality which is always biased towards some, and the rest are really doing themselves a disservice by clinging on to the selfish strategy. There is no perfectly level playing field for the free market to operate on, and the players themselves dig trenches and hills in it all the time.

So why should they persist in it? What's the moral imperative that says one must permit egoism when it threatens your own self-preservation and you find yourself in a game that is fixed against you?

Ayn Rand's musings are far removed from Kant's.

She never understood Kant.

The categorical imperative is an attempt to explain where morality comes from, and not what morality is.

That's right, and I have been saying above, egoism is intrinsic to human nature.

It's a question of what you should do if you wish to achieve certain ends, whereas Rand's ramblings are about lifting egoism as the prime moral virtue without any logical justification.

Not correct. The logical justification was that it is an inherent behaviour, and so a 'morality of the highest order'.

I don't agree with her use of the term "moral" wrt egoism. As I stated above,..."not a moral judgement but the mechanism of actual human behaviour, egoism.".

That's right, and I have been saying above, egoism is intrinsic to human nature.

But not the defining feature, fortunately.

Biology has developed altruism to solve the problem of everyone wasting energy in petty backstabbing competition. Selflessness can be said to be equally intrinsic to human nature.

It would be tempting to say that egoism and altruism are both just the manifestation of the selfishness of the human genes, but since DNA doesn't actually think or have a purpose or an interest or goal of any sort, the argument for selfishness as the driving force of nature breaks down.

They're just alternate modes of existence.

Selflessness can be said to be equally intrinsic to human nature.

Not compatible with servival instincts, unless one somehow benefits by being altruistic. If you were to "design" a species that way it would not last the first generation.

I objected to equating selfishness with egoism above, because I was referencing the behavioural mechanism at play in free market capitalism,... that everyone seeks their own benefit by nature.

This is why capitalism is a resounding success at elevating everyone's standard of living, despite inequalities being a natural consequence. In this sense i'm not referencing moral judgement at all, but a demonstrable fact of human behavior.

Rand took the extra step and elevated egoism to the highest morality,... while I would not have even bothered because it can't really even be a morality if its an imperative from natural instincts.

Not compatible with servival instincts, unless one somehow benefits by being altruistic.

The survival instinct isn't absolute. By risking survival, one can paradoxically increase their chances of survival because others in the same group are just as willing to sacrifice themselves for you. Being willing to sacrifice oneself is mutually benefical in many cases.

everyone seeks their own benefit by nature.

This is why capitalism is a resounding success at elevating everyone's standard of living

Correlation doesn't imply causation, especially when this "capitalism" or free market hasn't actually existed at any point in history, and many times when we've tried to implement it more rigorously, the results have been a horrible mess.

See Thatcherism for example.

Of course, the people who stood to benefit from it would describe it as a success. The same people are now sitting at the top 5% enjoying the growing income disparity.

During Thatcher's government, the GDP went up massively, but so did unemployment and poverty. There was a huge shift of money from the lower classes to the upper classes as the industries were outsourced out of the country and trade unions were stifled.

That's the general hallmark of the "success" of neoclassical capitalism that argues the market is best left alone to do its business.

Well it does do its business, but that business is to make the rich richer by short-sighted profiteering that destroys the wealth and productivity of the society.

Another example of the "rationality" of the markets is the energy crisis of California, during which the great idea was to deregulate and force everyone to buy electricity off the spot market to induce competition, in order to bring the power prices down.

It just made the situation worse, because the producers found out they could extort 20 times the price by intentionally shutting down their powerplants at peak demand. They only did what was rational towards their owners' bottom line, even though it lead to rolling blackouts in the state.

And it wasn't even illegal.

everyone seeks their own benefit by nature.....This is why capitalism is a resounding success at elevating everyone's standard of living

Correlation doesn't imply causation, especially when this "capitalism" or free market hasn't actually existed at any point in history, and many times when we've tried to implement it more rigorously, the results have been a horrible mess.

I'm not relying on correlation. The motive behind Competition, obviously an element in capitalism, is abundantly clear. So is the success of capitalism Despite it not being laissez faire.

I'm not relying on correlation. The motive behind Competition, obviously an element in capitalism, is abundantly clear. So is the success of capitalism Despite it not being laissez faire.

Yes.

The point is that the success of capitalism is not merely due to the competition motive. The success comes actually from the fact that the actual implementations of capitalism have rarely been anywhere near laissez-faire.

The actual capitalists hate competition and will do everything in their power to avoid it, which is why it automatically corrupts itself when you leave it alone. It tends to drive itself away from the optimum market condition and destroy its own means of sustenance because of egoism.

In this case, the growing income disparity is threatening the very productive capabilities of the society that are needed to create the wealth in the first place.

The actual capitalists hate competition and will do everything in their power to avoid it , which is why it automatically corrupts itself when you leave it alone.

Nope, dead wrong. That guy hates competition until he in return makes a better wigget, then he needs and loves it again,... and on and on.... recursively. This is precisely what drives innovation and lower prices, competition. It's basic economics guy.

It tends to drive itself away from the optimum market condition and destroy its own means of sustenance because of egoism.

Unbelievable. The exact opposite effect is in play. It is self sustaining and self correcting. It's clear that the free market was/is the greatest force for economic progress, and thus standard of living for the greater masses, in human history,... despite reactionary government regulation,... and precisely because of individualism and egoism.

"Who is John Galt?" was started when the owners of the Twentieth Century Motor Company adopted a policy of income equality.
The 'selfish' Galt quit and took with him the plans for his miracle engine.
Many here would say Galt was selfish, but it was the owners and workers of the motor company who were truly selfish by using force to 'equally' distribute pay, up to the point when the company was bankrupt and everyone lost their job.
And Galt had his engine just waiting to 'share' with the world.

automatically corrupts itself when you leave it alone.

How?

If the govt ONLY has the power to protect private property, how does capitalism corrupt itself?

"Who is John Galt?"

A fictitious character created by someone who thinks selfishness is a "virtue" (and says so), and whose character is reduced to ridiculous dialogue in some kiddy fantasy of being "great".

no free market here!

Sweden repealed its wealth tax to keep their wealthy from leaving the country.

Leaving the country is a form of betrayal, which is precisely the point. The rich get richer because they are often unethical in some way, and look for EVERY loophole to rob everyone else of their rightfully deserved reward for their labors.

Leaving the country is a form of betrayal, which is precisely the point

Plundering your wealth is a crime, and quite stupid on the part of the state.

Those with wealth can live anywhere so why punish them for living in Sweden?

Nation-states are in decline as more individuals can create wealth and live anywhere using the internet.
The book Sovereign Individual describes this quite well.
Nation state like Canada and Switzerland are selling passports to the wealthy while the USA is trying to give them away to vote in more socialists.

How many CEO's are there. 10,50,100,1000,10000? It is not like they are multiplying like rats. If a CEO drives a company and makes it profitable and provides jobs and a product at a competitive price then what is the problem with what the CEO makes? If the CEO does not perform, then they are not CEO for very long. In a socialist society, the government is the CEO and the results are usually catastrophic. In a Capitalist society, it is produce or your out.

"1. Just 2.8% of American workers earn at or below the minimum wage.

2. Half of all minimum wage workers are 16 to 24 years old.

3. Labor workers already make well above the minimum wage.

4. Even those who support minimum wage hikes concede it could kill jobs.

5. Minorities and the poor are hit hardest by the minimum wage.

6. Even progressives concede the minimum wage is no panacea for America's economic woes.

7. 21 states already have minimum wages that are higher than the federal $7.25/hr rate."
http://www.youngc...to-face/

"Anjem Choudary, a British-born radical Islamic cleric who lives off the British welfare state, has repeatedly urged his followers to quit their jobs and claim unemployment benefits so they have more time to plot holy war against non-Muslims."
"In 2010, The Sun reported that Choudary takes home more than £25,000 ($39,000) a year in welfare benefits. Among other handouts, Choudary receives £15,600 a year in housing benefit to keep him in a £320,000 ($495,000) house in Leytonstone, East London. He also receives £1,820 council tax allowance, £5,200 income support and £3,120 child benefits. Because his welfare payments are not taxed, his income is equivalent to a £32,500 ($50,000) salary. By comparison, the average annual earnings of full-time workers in Britain was £26,936 ($41,000) in 2014."
http://www.gatest...re-jihad

'Good sites'?
This site promotes a socialist agenda whenever possible and too many who worship science support that agenda even though Carl Popper demonstrated how unscientific socialism is.

This article is a piece from the far-left fringes of politics.

Does not belong on a science website.

If you consider this FAR left, that unambiguously proves you are so far right that you can't even see where the middle, left and right are anymore.

'Good sites'?
This site promotes a socialist agenda whenever possible and too many who worship science support that agenda even though Carl Popper demonstrated how unscientific socialism is.

That is such blatant nonsense that YOU shouldn't be on a science site. Seriously, you've done nothing but spew ideological propaganda.

spew ideological propaganda.

Socialism on physorg:

This article on income redistribution.
Controlling the world economy to 'save the planet' from AGW.

What's the difference between a 'little socialism' or a 'lot of socialism'?
It's all 'legal' plunder to control the lives of others.