Print

Please login or register.
1 Hour 1 Day 1 Week 1 Month Forever
Login with username, password and session length

[Helgoland]

This came up in another topic recently: If we just evenly distributed all wealth in the US to its people, there's no telling what would happen because prices wouldn't remain the same - they'd go up in some sectors and down in others. This example is extreme, of course, but the question remains: What do you think would be the short- and long-term effects of increased income redistribution of some kind?

[Caz]

This came up in another topic recently: If we just evenly distributed all wealth in the US to its people, there's no telling what would happen because prices wouldn't remain the same - they'd go up in some sectors and down in others. This example is extreme, of course, but the question remains: What do you think would be the short- and long-term effects of increased income redistribution of some kind?

In a couple of months, a few people would have a lot of everything and a lot of people would have hardly anything. Status quo prevails.

[Reelya]

Some thoughts.

(1) things like food stamps have a huge impact on GDP, bigger than any other stimulus measure. Basically, giving money to people who have nothing ensures that they will spend it. Things like food prices will rise if there's a widespread increase in income, but food isn't a zero-sum game (you can produce more food as demand increases). So I'd say there would be a spike in food prices, then this would subside as production ramps up.

(2) a lot of things don't have to go up in price if more people can afford them. e.g. video games, movies, music. if more people buy your game/movie/album then that actually makes them cheaper per unit and causes a boost in production, as more ambitious, or otherwise-fringe productions suddenly become more viable. Increased profit margins will means there's a price war over content, since there's basically a bottomless pit of entertainment content out there already.

(3) for anything that's a truly finite resource, increased consumption is basically going to push up the price. So you'd see the price of oil increase permanently, and there's a limit to how much we can pump out of the ground. While the higher price of oil will technically be affordable because people have more income, you're going to see other forms of energy become more popular because their relative price will be lower than it is now.

In general, a lower income disparity is common to two classes of countries: wealthy scandinavian states or eastern european ex-communist states. I guess it's up to individual interpretation which one a more-equal America would resemble.
https://en.wikipedia.org/wiki/List_of_countries_by_income_equality

Another thing to think about is how abysmal the median wealth in America is compared to many other advanced economies. This gives some reality to what people mean when they say "there's no middle class" in America. e.g. Median wealth in USA is ~$US44,000, and in Italy it's ~$US138,000 and in Australia it is ~$US220,000 ! i.e. "joe blow" in Australia has 5 times the wealth of "joe blow" in America. More evenly distributed income would grow the middle class again.
https://en.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult

[LordBucket]

If we just evenly distributed all wealth in the US to its people

You would need to clarify what you mean by "wealth" and how you would redistribute it. The majority of "wealth" in the US is not money. It's real estate, and businesses and cars and "things."

How do you "redistribute" a hotel chain? How do you "redistribute" San Fransisco real estate? How do you "redistribute" a house?

Are you planning to auction these things for cash? Who's going to buy them? You're talking about several dozens of trillions of dollars worth of things. There isn't enough money to buy them. An auction would result in massive devaluation, and probably a great deal of destruction as businesses were broken up and the pieces redistributed to different owners in ways that would render them nonfunctional. For that matter, how would anyone buy them if money is part of what's being redistributed?

And if your response is to exclude businesses and real estate from the proposal, then the result would be a general shift of ownership from private individuals to corporations owned by the same people, and the people most affected would be those members of the middle class in possession of 401ks, retirements funds, stocks, etc. who aren't smart enough to do the required rearranging on paper to qualify for an exemption of their assets from your redistribution effort.

Until the "how" is clarified, very little useful discussion can occur.

[Helgoland]

Eh, the wealth thing was just mainiac's extreme example which got me thinking. What I'd be interested in is a redistribution of income: A basic income, for example, or progressive taxation which goes negative on the lower end of the scale.

[Reelya]

@Lordbucket: Businesses don't have to be broken up to have multiple owners anyway. There is this thing called "shares" that they invented which is handy for that. Any sort of multi-owner system you can imagine can be handled with share ownership. There is nothing in the idea of "equitable wealth distribution" which implies "every man for himself", so that objection is a complete red herring.

Also, the concept of auctions, selling, etc the assets doesn't make sense in light of the question either. So basically none of your points actually make any sense in regards to this question. "Redistrubution of wealth" if such a thing was done, is done through parcelling out ownership to citizens. And this can be done through transfers of share ownership without breaking any actual assets into smaller pieces or needing auctions etc.

I also think that the thought excercise here is about the question "what would America be like if there was a more equitable wealth distribution?" rather than "what would happen if we tried to confiscate all the wealth and redistrubute it evenly?"

[LordBucket]

There is nothing in the idea of "equitable wealth distribution" which implies "every man for himself", so that objection is a complete red herring.

Also, the concept of auctions, selling, etc the assets doesn't make sense in light of the question either.

The question stands: how do you do it? I'm not saying it can't be done. I'm asking you in what manner, for purposes of discussion, are we talking about it being done? Because that is important information in order for useful discussion to occur. If you don't like my example of an auction, that's totally ok. I was bringing it up, to point out that that particular method would come with great difficult and likely have very bad consequences. So come up with another method. Tell me what it is that we're talking about here. How do you propose to do this? And once that question has been answered, then we can talk about what the results might be.

Discussing the results of a thing that you can't even tell me what the things is we're talking about, is not a productive discussion.

"What's it like to do stuff?"

Well, it depends on the stuff being done, doesn't it?

"Redistrubution of wealth" if such a thing was done, is done through parcelling out ownership to citizens.
And this can be done through transfers of share ownership without breaking any actual assets into smaller pieces

I apologize, Reelya, but I think that you've not thought this statement out very well. May I suggest that you reconsider it? Or possibly rephrase it, if it's not quite what you intended? For example, let's say that I own a house with an appraised value of 1 million dollars. How do you propose that "shares" in this piece of wealth be redistributed?

I also think that the thought excercise here is about the question "what would America be like if there was a more equitable wealth distribution?" rather than "what would happen if we tried to confiscate all the wealth and redistrubute it evenly?"

Have you read the opening post? Because that's the example that was given in the very first sentence. Let me quote it:

This came up in another topic recently: If we just evenly distributed all wealth in the US to its people

So forgive me if I'm skeptical when you suggest that that's not what this thread is about. Now, yes...it's true that another example was given:

increased income redistribution of some kind?

But these two things "evenly distributing all wealth" and "increased income distribution" would be significantly different in their range of likely results and "of some kind" is extremely vague.

I am requesting clarification of the topic so that we have some idea what we're talking about.

I think that's pretty reasonable.

[LordBucket]

What I'd be interested in is a redistribution of income: A basic income, for example, or progressive taxation which goes negative on the lower end of the scale.

Honestly, if that's what you want to talk about, I think I'd suggest stating a new thread to discuss the benefits of basic income vs negative income tax. "Price alterations" are a relevant subtopic, but I kind of feel like the well's been poisoned opening up this thread talking about the forceful redistribution of wealth.

Wealth and income are completely different things, and unfortunately, as a regular on the reddit basic income sub, it's  distinction that I've found many people struggle with.

Basic income is a very valid solution to a specific set of problems, some of which we may very well be facing as a civilization. If not already, then soon. Negative income tax is, basically, an alternative solution to those same problems. Personally, of the two, I would tend to favor a basic income. But, either of them are viable.

The first problem you run into, is picking a number and funding it. There is of course an incredibly obvious answer to this problem, which is to start with a method for determining an answer then use the number that method gives you, rather than starting with an answer and then jump through hoops trying to justify the number you made up. For example, you could simply take the amount of money available, decide who receives it (lots of basic income debate on whether children receive it, for example) and then divide money by recipients and write everyone a check for however much that is. That method makes a lot of  very practical common sense. And from that method you can then debate to your heart's content about which programs to cut and whether to raise taxes in what manner.

Unfortunately, an awful lot of basic income advocates seem to prefer the opposite approach: make up a number, and then figure out how to justify it. This frequently results in very silly answers. I have seen, for example, many basic income proposals that involve paying out more than the entire federal government collects, in total. And some people don't see a problem with that.

If you want to talk about basic income, we can totally do that. But again...it would be easier if the topic were clarified a bit.

[Reelya]

I apologize, Reelya, but I think that you've not thought this statement out very well. May I suggest that you reconsider it? Or possibly rephrase it, if it's not quite what you intended? For example, let's say that I own a house with an appraised value of 1 million dollars. How do you propose that "shares" in this piece of wealth be redistributed?

The concept of having part-equity in a piece of real-estate already exists as a basic legal principle. So ... use the existing legal framework, perhaps? Say you're going for full equality of wealth at some specific point, and the mean wealth is $500,000. Then, the guy who inhabits the $1 million home gets half equity in the property, and the other half of the equity is held by someone else/others/a trust fund. We already have a legal framework in place that can deal with this exact situation.

Look, obviously there are issues with the redistribution idea. But the specific issues you are bringing up are just retarded and trivial to dismiss. do a better job being devil's advocate.

~~~

Basically, there's no reason we can't split up wealth in any way we like. There's really no "granularity" issue like the one you suggest since all large assets already have legal frameworks to account for partial ownership. These sort of frameworks are especially well-developed in the fields of real estate and corporate share ownership, which are the things you were claiming can't be split up.

The only issue is "how do we get people to actually go along with redistribution" rather than "how can things be divided up evenly" like you are focusing on.

[ChairmanPoo]

The only issue is "how do we get people to actually go along with redistribution"

ask them nicely?

[LordBucket]

The concept of having part-equity in a piece of real-estate already exists as a basic legal principle. So ... use the existing legal framework, perhaps?

Yes, joint real property ownership is already a thing. But the fact that you don't see where your train of thought leads is very revealing.

Look, obviously there are issues with the redistribution idea. But the specific issues you are bringing up are just retarded and trivial to dismiss

Reelya, you and I have had many discussions together. Iv'e found you to be a generally reasonable person. The fact that you're hurling insults is...unusual. That's not how you typically conduct yourself. Can we just be honest with each other, here? You don't know what you're talking about. You don't know what these "legal frameworks" are that you're referring to, and have not considered the implications of applying them in this scenario, because you don't know what they are.

That's ok, but be honest about it.

Yes, it's unfortunate that rather than giving it further thought, you're simply claiming that "it will all work out" and then insulting me for questioning it. But it's something that we can work through.

Say you're going for full equality of wealth at some specific point, and the mean wealth is $500,000. Then, the guy who inhabits the $1 million home gets half equity in the property, and the other half of the equity is held by someone else/others/a trust fund. We already have a legal framework in place that can deal with this exact situation.

Well, first off let's correct that number. According to a quick google search, average US wealth per individual is $301,000

So, assuming for purposes of simplicity, that the house is the only item of property that I possess, which is fairly silly...but it does make the discussion easier, so let's make that assumption...of the $1 million appraised value of the property, under your proposal I now own only $301,000 of it, and the remaining $699,000 belongs to "someone else/others/a trust fund."

Ok.

Who gets to live there?

This is not a trivial question.

Who gets to live in the house in which I am now a minority shareholder?

Now, I predict that your answwer will be "the other shares are divided across a larger number of people. You might retain less than 50% ownership, but any other individual owns only a very small percentage of the remaining majority, leaving you as the largest single shareholder, therefore you get to live there."

At first glance that might appear to be a reasonable answer. But now, these other people who individually own only a very small portion of the house, yet who nevertheless own collectively own the majority of it...what benefit do they derive from this ownership if they're not allowed to live there? If I'm not renting the property, there is no revenue to distribute. What good does it do them? You're wanting to do this whole wealth redistribution thing in the first place to benefit people, right?

How do they benefit?

Well, the most obvious answer would be...

...actually, rather than me walking you through this, let's do this via Socratic method.

1) Who gets to live there? (Bonus points: who gets to decide who lives there?)
2) What benefit do the people who don't live there receive for having partial ownership of the property?

After you answer those two questions, we can proceed. Hopefully I'm not leading you too much.

There's really no "granularity" issue like the one you suggest since all large assets already have legal frameworks to account for partial ownership. These sort of frameworks are especially well-developed in the fields of real estate and corporate share ownership, which are the things you were claiming can't be split up.

I'm not claiming they can't be. I simply understand the consequences of doing so. And you, I suspect, have not considered those consequences very thoroughly.

[Gentlefish]

...I think the problem with your argument is that "Everyone gets a little piece of everything".

Personal homes are not businesses; I do not believe they factor into the wealth distribution here. You're free to move up afterward, but your personal home gets counted against what you can receive, not counted into what you owe.

...Unless you own multiple, million-dollar homes like a filthy person. Then does it become a problem.

And again, it stops being a problem if the redistribution deals completely with income. You keep your personal objects, but stupidly rich people take a huge pay cut and cashiers start raking in the dough. No property, no problem.

I feel like this problem, if you really really want do deal with it in real world terms and not the hypothetical situation that it is being proposed as, is solved more easily with the second solution. YMMV.

But this is a fun idea to chew on.

[LordBucket]

...I think the problem with your argument is that "Everyone gets a little piece of everything".

It's not my argument. Read the opening post:

If we just evenly distributed all wealth in the US to its people

And sure, there are ways of "evenly distributing all wealth" that don't require giving everyone "little pieces of everything." If you seize $50,000 in cash, and a car worth $50,000, maybe you can give one guy the car and somebody else the $50,000. You don't have to give them each $25,000 and and 50% ownership in the car.

But deciding how this kind of thing is handled is crucial to the discussion. Like I said in my first post in this thread, the majority of "wealth" is not money. How do you redistribute it? I'm not saying it can't be done. I'm asking how do you do it? Because the answer to that question  has a very strong determining influence on what the result will be.

Personal homes are not businesses; I do not believe they factor into the wealth distribution here.

Ok, that's fine. Opening post specified "everything," but if you want to talk about a no-homes redistribution plan, that's ok.

What's your proposal?

businesses

Divvying up business will have its own host of problem too.  I guarantee you that the moment the state steps in and seizes a business, the former owners are going to stop contributing their part to the profit-making efforts of that business. Imagine, just for a moment, that the state, acting through force, seizes all businesses in the country, and even with the best of intentions begins redistributing profits from those businesses evenly.

And hey, that's not the only possibility. But I'm the only one talking specifics instead of hand waving everything. So if you don't like my scenario, that's fine. Propose one of your own.

In the meantime, what do you think would happen if businesses were seized like that?

 * You're the owner and chef at a Mom and Pop restaurant. As of yesterday you had the mortgage on your building half paid off, and things were looking good. As of today, you no longer own the business and all your profits are seized and redistributed. How do you feel about this?
 * You're a Fantasic Sams hair salon franchisee. You invested $70,000 of your own money on your first year for franchise rights, rent on a building, remodeling, marketing, etc. After you first year you brought in $35,000 in revenue, and you expect to break even on you initial investment by the end of year two. On day 1 of year 2, your business is seized and the government begins redistributing all your revenue to the population at large. Do you continue going in to work, or do you walk? If you walk, who's going to run the salon?
 * You're the CEO of tech firm that brings in billions of dollars of revenue every year and is sitting on a $5 billion war chest. Legislation is going through congress to seize all business assets in the country. It's looking like it's going to pass. Do you leave your assets inside the United States, or do you transfer everything out of the country to prevent seizure?
 * You're an international Japanese car company with hundreds of millions of dollars worth of manufacturing plants in the US. Your plants are seized and all your profit in the country is redistributed to people who aren't you. Do you go along with this, or do you withdraw all of your management staff back to Japan, let the factory fail, refuse to ever do business inside the US ever again, and start an international boycott to encourage other countries to do the same?

People need to think about stuff like this if we're going to talk about wealth redistribution.

If you want to have a basic income or negative income tax there are ways of making those work. "Wealth redistribution" has a crazy long list of problems with it

[Helgoland]

Dude, you go re-read the OP:

This came up in another topic recently: If we just evenly distributed all wealth in the US to its people, there's no telling what would happen because prices wouldn't remain the same - they'd go up in some sectors and down in others. This example is extreme, of course, but the question remains: What do you think would be the short- and long-term effects of increased income redistribution of some kind?

Second bolded bit is the topic at hand. The example was just what motivated me to make this thread - so yeah, you're fighting a massive strawman here.

[Nick K]

I suspect that it would be a rather terrible precedent to set. Currently, starting a company involves massive risk and enormous amounts of work. Consider Bay12, for example. Toady makes money from DF, but he's put a tremendous amount of work into it.
If the government just takes Bay12 and redistributes it, then what incentive would other indie game devs have to make their own games? Would it really be worth slaving away over code for long hours for years if you knew the government might just decide to take ownership and hand it out across the whole population, most of whom wouldn't have made the sacrifices you did to make the game?

Really though, isn't this pretty similar to what happened in the early Soviet Union? Government seizure of the land, factories, and so on and their re-definition as collective property.