Friday, January 2, 2015

Q&A - 2/1

Russ Roberts

[Paraphrasing, in interview with T. Piketty] You complain about inequality but the economy, "the pie" is so much bigger now, and there are more ppl, that is why the top is getting more of the share (it seems) bcz of that bigger pie [..]


They kept going back and forth on this, Roberts kept saying "more people, bigger pie", and Piketty kept saying "we cant have the amount of inequality we have right now".

What Roberts actually meant with his comments was this; "yes the median income might have fallen down, but the economy is feeding so many more people", i.e. "the economy became bigger, but the population increased much faster, so everyone's share is smaller". Then I thought, I cant believe Roberts said this, he made basically a commie argument. His position is "person X, dont you worry, you are making less, but in total, the economy is feeding so many more like you now, you should feel better about that".

But.. why should that person care, especially in an economy centered around individual? Should person X get get that warm and fuzzy feeling that there are many others who are in the same position? It's ludicrous. Especially coming from a "market-oriented" liberterian like Roberts. Less money in the hands of the "many" means less spending to go around.

Few solutions to this problem (there is one, I hope everyone agrees). 1) New e-currency, like Bitcoin [1], can be developed that allows personal mining that'll last indefinitely; everyone "makes" their own money. At certain intervals the system can even start a "taxing round" which shifts money from rich to the poor. Government, if it wants, can be involved to identify who the real people in the system are, so the system (its users) can direct it to real people (or invdividuals themselves keep track of this).

Alternatively the system can have a built-in mechanism that reverses the exponential effect of wealth, money held by small holders is multiplied by a certain constant to bridge the gap between insanely rich and poor.

Or, basic income must be considered.

BTW, I see some criticism (a notable one from America) on basic income on the grounds that;
It’s tremendously important for people to work not just because that’s how they get their money, but also because it’s one of the principal ways they get many other important things: self-worth [..] engagement [..]
Nice words, but the authors of this passage must be careful, because the culture code for work in America is WHO YOU ARE. People derive an identity from work, which is a completely different issue than the one we are discussing here.

Codes came below intellect (and stronger), even when ppl think they are thinking rationally, this stuff can sneak in and distort things... So watch out.


[1] Maybe the lowest hanging fruit is the implementation of instantenous conversion from bank accounts to Bitcoin and vica versa; because electronic payments need to come into play somehow, status quo is a major pain in the ass. Credit cars are not secure, there are limits to ATM card payments, and banks are not always open. I need to be able to point to a QR code and be able to pay, from my bank account instantenously.