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#145523 - 08/11/18 04:29 AM Re: Corporate social irresponsibility [Re: Sini]  
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One example that comes to mind in the arrival of SV data miners, at best their projects benefit a group of stock investors that tend to be affluent to start with, at worst they benefit only a few dozen founders and early investors.


#145525 - 08/11/18 06:18 AM Re: Corporate social irresponsibility [Re: Sini]  
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While I don't doubt that has an impact in regards to overall 'equality' I think the root problem is that others have gotten poorer, not that some people are making out like bandits. If the banking sector was working for Main St in the Midwest and elsewhere, the problems wouldn't be anywhere as acute.

I do think the banking rules and practices are a much larger influence, but I also maintain that a primary driver of, and the best metric for measuring real inequality is the price of money. It is also not a marginal fact that the price of money represents not just the existing state of financial affairs, but also opportunity. Simply put, people who get a better price on money have much more opportunity. 'Bootstrapping' is pretty easy if you have a letter of credit for 10 million at 2%


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#145527 - 08/11/18 05:05 PM Re: Corporate social irresponsibility [Re: Derid]  
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Originally Posted by Derid
While I don't doubt that has an impact in regards to overall 'equality' I think the root problem is that others have gotten poorer, not that some people are making out like bandits.


I don't think these are two different problems. Wealth inequality is a zero sum game, if you have someone making out like bandit it is only because someone have gotten poorer.

Originally Posted by Derid
If the banking sector was working for Main St in the Midwest and elsewhere, the problems wouldn't be anywhere as acute.


I really don't see how this would make any difference. Fundamental problem is that too many people live hand to mouth. In that mode you are not participating in capital side of equation in any way.


#145529 - 08/11/18 08:02 PM Re: Corporate social irresponsibility [Re: Sini]  
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Mid-level capitalism, that is to say, small and medium sized businesses, are a huge employment driver. Growth and investment of existing business is also heavily dependent upon access to reasonably priced capital. We need to remember that wealth can be created and even destroyed, not just distributed. If other sectors are able to generate more wealth, inequality is reduced.


This is honestly too complex of an issue to easily unpack in a few lines, because the price and availability of money impacts everything. Including the startups you mention, and the availability of that money - and the desirability of tossing it into empty shell startups that don't much useful. It also impacts the people who live hand to mouth. It is difficult to get ahead when money you invest either comes with large amounts of risk, or zero returns - yet money you borrow is extremely expensive. Look back earlier in thread where I did quick calc of someone who saved $200 a month.

In a well functioning system, capital serves as a mechanism for creative destruction - people save money because it gives a return, that money is loaned to businesses that utilize that money to change themselves to reflect market conditions, creating more wealth that is distributed back through the chain. This is how a stable middle class comes to exist.

Right now the system is not functioning properly, and is full of massive distortions that are, frankly, unsustainable in the long term. The type of inequality we are seeing is a symptom, not a cause. To wit: taking medicide to feel better, aka, legislatively crushing the .01%ers of SV and such might alleviate some pain in the short term - but will not cure the disease. And the disease is what will ultimately do us in.

Or to put it another way: Taking from the rich to give to the poor is akin to patching our society together with duct tape and bailing wire. Maybe it will become necessary in order to keep afloat long enough to fix the boat, but if we aren't thinking about fixing the boat, all we are doing is buying a bit of time while patting ourselves on the back for what in effect is kicking the can down the road a bit. We're still gonna sink.


For who could be free when every other man's humour might domineer over him? - John Locke (2nd Treatise, sect 57)
#145530 - 08/11/18 09:14 PM Re: Corporate social irresponsibility [Re: Derid]  
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Originally Posted by Derid
We need to remember that wealth can be created and even destroyed, not just distributed. If other sectors are able to generate more wealth, inequality is reduced.


I understand what you are trying to say, but it is still inaccurate. Absolute amount of wealth and its distribution are different concepts. In a hypothetical land of plenty, someone who accumulated twice as much as I have is still twice as rich as I am despite both of us having plenty. Humans are hard-wired for comparative assessment of wealth and you don't actually have to have reach the point of death and starvation for the poor to hit critical point where disaffected populations starts undermining the system.

A few (many?) years ago we had a discussion about effects of wealth inequality on destabilization of governance. All historical data points to US being at the threshold. To the point that I got seriously concerned and got out. Well, now there is Trump. What comes next will be even worse. Hopefully Internet is still running in a decade so we can commiserate on how comparatively sane things were in 2018.


#145531 - 08/11/18 09:38 PM Re: Corporate social irresponsibility [Re: Sini]  
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I wouldn't say it's inaccurate - if say SV guy makes a million, there is less inequality if the Midwest guy makes 100k as opposed to 30k

If the ship was functioning correctly, more of that million would also be flowing to capital investments instead of speculatory asshattery and pyramidish venture vultures.

I agree that we are in a very very bad spot regarding inequality, and we certainly aren't on a sustainable path. My point is simply that we must think beyond playing whack-a-mole and think systemically, which includes but is not limited to things like how capital is actually flowing (or not) through banks and other lenders. And maybe the mallet is needed to some extent.

I certainly wouldn't be adverse to busting up AT&T again, nor a bevy of other would-be monopolists. AI is another major worry that we aren't socially equipped to deal with.


For who could be free when every other man's humour might domineer over him? - John Locke (2nd Treatise, sect 57)
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