The rich - poor gap

[Dr Jekyll]

iphonedyou said:

Equality of oppportunity is good. Equality of outcome is absolutely terrible. To me, your point here risks conflating the two.

+ 1

Equality of opportunity inevitable leads to inequality of outcome. And inequality of outcome is not a problem unless you subscribe to the old socialist idea that 'it's better for everyone to have one shirt, than for some to have two and others three.'

[sooperscoop]

<unpopular opinion puffin>

Imagine those jobs that take intelligence, dedication, decades of effort and smart decision making. Say, surgeon, Professor, Army General, principal engineer, barrister. All those jobs earn maybe 100-200k.

So all these f***kers 'earning' millions through business deals and trading. Are they really smarter and better than these people? I say no. Everything they make is built on the backs of generations of hardworking people who built this country. Take their f***king money and plough it back in.

[900T-R]

walm said:

You are forgetting a very important part of the equation: productivity.

If we can use those resources more efficiently then we have created value.
The semiconductors and internet are amazing examples of recent productivity enhancement.

Without the internet, taking a dump would be a total waste of time... but now I can browse PH from the can! Result!
It may have improved productivity in other ways too.

Say you were filthy rich - would you be satisfied with being able to access PH from the loo, or would you still want the big house, the cars, the travel, the food and the wines, the watches and all the other stuff of which supply, by nature, is finite?

Productivity may be up, but that just means more money is chasing static or dwindling stocks of the above...

[Dr Jekyll]

sooperscoop said:

<unpopular opinion puffin>

Imagine those jobs that take intelligence, dedication, decades of effort and smart decision making. Say, surgeon, Professor, Army General, principal engineer, barrister. All those jobs earn maybe 100-200k.

So all these f***kers 'earning' millions through business deals and trading. Are they really smarter and better than these people? I say no. Everything they make is built on the backs of generations of hardworking people who built this country. Take their f***king money and plough it back in.

You aren't paid as a reward for being smart and 'better', you get paid for adding value. If a business deal increases the value of a company by tens of millions I don't object to the person who originated it being paid a few million.

[walm]

900T-R said:

Productivity may be up, but that just means more money is chasing static or dwindling stocks of the above...

I think Moore's Law is a good counterexample.

You double the number of semiconductors on the same piece of silicon every two years.

In simpler terms - you get more out of the same resource.

So while the earth obviously has fewer natural resources than during the bronze age we all live infinitely more rich lives; in particular when it comes to pooping.

[Mr Will]

Dr Jekyll said:

sooperscoop said:

<unpopular opinion puffin>

Imagine those jobs that take intelligence, dedication, decades of effort and smart decision making. Say, surgeon, Professor, Army General, principal engineer, barrister. All those jobs earn maybe 100-200k.

So all these f***kers 'earning' millions through business deals and trading. Are they really smarter and better than these people? I say no. Everything they make is built on the backs of generations of hardworking people who built this country. Take their f***king money and plough it back in.

You aren't paid as a reward for being smart and 'better', you get paid for adding value. If a business deal increases the value of a company by tens of millions I don't object to the person who originated it being paid a few million.

Not disagreeing with you, but what about the talented engineer who invents a new widget that makes the company tens of millions? He just keeps getting paid the same old salary whereas his boss likely gets a big bonus and payrise for the change in the bottom line. Who added the value there?

It's like the attitude that only the sales people in a company are revenue generators and everything else is a cost - misguided but unfortunately commonplace.

[900T-R]

Dr Jekyll said:

You aren't paid as a reward for being smart and 'better', you get paid for adding value. If a business deal increases the value of a company by tens of millions I don't object to the person who originated it being paid a few million.

The problem with that, of course, is that it doesn't take a rocket scientist to increase the shareholder value of a company with tens of millions now, at cost of hundreds of millions later on when you've long moved to pastures new.

[Digga]

Ozzie Osmond said:

But then, as the "anti-socialists" must surely be aware, the way you suppress that is by giving the lower class enough money to stop them revolting - which brings you right back where you started.

You can also give people enough benefits for them to think they are okay.

If, at the same time, the nanny state absolves the individual of so much responsibility they no longer have the desire or, eventually, means to be ambitious, you can keep them nice and quiet. Unfortunately, it does tend toward making them dumber too, but it;s okay, because there will always be keen, hungry immigrants to keep the ship afloat.

[900T-R]

walm said:

I think Moore's Law is a good counterexample.

You double the number of semiconductors on the same piece of silicon every two years.

In simpler terms - you get more out of the same resource.

And then Windows comes with a new version that makes my computer just as slow as before by adding all sorts of spurious 'functionality' that some nerd thought'd be cool to have.

On the same note, I've got a smartphone with all sorts of functions and 'apps' I haven't asked for that is worse at its core functionality - making phone calls, sending and receiving messages - than the dumb phones before.

I still don't see any £1 million, diamond encrusted box with silicon chips on the market, either. Computers and electronic gadgets will never be objects of desire that folks will pay over the odds for (high added value). They're commodities, made in the millions in low wage countries.

Meanwhile, if I wanted to have a current equivalent of the £1,000 analogue record turntable I bought in 1989, I'd need to add another digit to that sum...

[walm]

Computers and electronic gadgets will never be objects of desire that folks will pay over the odds for (high added value).
[/quote]

You clearly aren't an Apple customer!

[Justayellowbadge]

900T-R said:

And then Windows comes with a new version that makes my computer just as slow as before by adding all sorts of spurious 'functionality' that some nerd thought'd be cool to have.

On the same note, I've got a smartphone with all sorts of functions and 'apps' I haven't asked for that is worse at its core functionality - making phone calls, sending and receiving messages - than the dumb phones before.

I still don't see any £1 million, diamond encrusted box with silicon chips on the market, either. Computers and electronic gadgets will never be objects of desire that folks will pay over the odds for (high added value). They're commodities, made in the millions in low wage countries.

Meanwhile, if I wanted to have a current equivalent of the £1,000 analogue record turntable I bought in 1989, I'd need to add another digit to that sum...

Vertu have made and sold £1m plus phones.

[900T-R]

walm said:

You clearly aren't an Apple customer!

So what's the dearest iPhone nowadays - 600 quid? Every school kid has got one - hardly the aspirational stuff that you are going to buy, one day, after you get rich... More in line with the £150 pairs of trainers that you see mostly in 'disadvantaged' towns and neighborhoods...

[iphonedyou]

sooperscoop said:

<unpopular opinion puffin>

Imagine those jobs that take intelligence, dedication, decades of effort and smart decision making. Say, surgeon, Professor, Army General, principal engineer, barrister. All those jobs earn maybe 100-200k.

So all these f***kers 'earning' millions through business deals and trading. Are they really smarter and better than these people? I say no. Everything they make is built on the backs of generations of hardworking people who built this country. Take their f***king money and plough it back in.

Well by that reasoning, everything you make is built on the backs of generations of hardworking people. So let's take your fking money.

Except we can't, because you've arbitrarily set the limit somewhere above your earnings. Anyway, they're not getting paid for being 'better' or 'smarter', so your argument, such as it was, falls at the first hurdle.

[richie99]

johnfm said:

Interesting new treatise by a (left leaning) French economist published recently.

WHile I do not agree with his proposed solutions of very large taxes on wealth, his reasoning is simple enough:

There has developed a large difference between the tax on income and the taxes on capital returns;

if captial returns (ie rent for example) exceed economic growth, the gap between wealth and earnings widens at an accelerated rate.

In a nutshell, income tax is too high, inheritance and capital gains taxes are too low.

Interesting debate about the different roles of capital and income. Seems to me that the banking crisis was due in large part to the workers (bankers) taking control of the means of production and acting wholly in their own interest and the owners of capital (you and I to a large extent through our pension funds) being royally stuffed. Marx would been horrified!

More in topic though, much of what we are seeing is a direct result of globalisation. There is very little opportunity for the unskilled, feckless, lazy or stupid to hide. Those with wealth can take it anywhere. Try to penalise them here, and they are gone.

As far 50k plus being wealthy, don't make me laugh. The mortage to acquire a modest semi in sensible commuting distance of central London (about 750k in my area) will eat most of that after tax.

[DanL]

Mr Will said:

Not disagreeing with you, but what about the talented engineer who invents a new widget that makes the company tens of millions? He just keeps getting paid the same old salary whereas his boss likely gets a big bonus and payrise for the change in the bottom line. Who added the value there?

Well, the talented engineer could have set up his own company, gathered investors, built the product and sold it himself if he were minded to, rather than accepting the (relative) safety of working for someone else, and accepting that there are limits to the remuneration you get in that model - and I say that as someone who's more than happy working for a company without having to think about running a business at the same time!

Even in a large company, if he's very talented he can still do well and be paid a fortune (see Jon Ive at Apple for an example, or the engineers who rise through the ranks at Microsoft, Google, etc.).

[walm]

900T-R you said nothing in your lifetime had increased the pie.

I gave Moore's Law and the internet as counterexamples.
There are plenty of other examples particularly in areas such as pharma and biotech (little blue pill anyone?).

However you return to saying that aspirational things have to be rare and expensive, which to a certain extent I agree with.

Unfortunately that isn't an argument to suggest that the pie isn't getting bigger, you have just limited a certain part of the pie through definition.

The pie is certainly getting bigger and the reason is productivity which is closely tied to innovation of which there has been plenty in the last 50 years.

The number of Patek Philippe's may be strictly limited but that doesn't mean half of China wouldn't be delighted to be given a Swatch.

[Mr Will]

DanL said:

Mr Will said:

Not disagreeing with you, but what about the talented engineer who invents a new widget that makes the company tens of millions? He just keeps getting paid the same old salary whereas his boss likely gets a big bonus and payrise for the change in the bottom line. Who added the value there?

Well, the talented engineer could have set up his own company, gathered investors, built the product and sold it himself if he were minded to, rather than accepting the (relative) safety of working for someone else, and accepting that there are limits to the remuneration you get in that model - and I say that as someone who's more than happy working for a company without having to think about running a business at the same time!

Even in a large company, if he's very talented he can still do well and be paid a fortune (see Jon Ive at Apple for an example, or the engineers who rise through the ranks at Microsoft, Google, etc.).

Leaving aside the contractual restrictions on starting his own business, surely the same argument applies to his boss (who is an employee of the company, not the owner) who does get the bonus? It certainly applies to the sales teams who will rake in the commission selling the new widget.

My point is not that he is being exploited (I don't think he is). It is that in my opinion we have a distorted view of who adds value to a business - it's not always the guys at the top. Not everyone who is great is suited to rising through the ranks and leading a team or running a company.

[richie99]

walm said:

You are forgetting a very important part of the equation: productivity.

If we can use those resources more efficiently then we have created value.
The semiconductors and internet are amazing examples of recent productivity enhancement.

Without the internet, taking a dump would be a total waste of time... but now I can browse PH from the can! Result!
It may have improved productivity in other ways too.

Competition encourages innovation and innovation often strives to improve productivity.

Good introduction of a critical issue for the UK which is vary rarely discussed. We are a low productivity nation by the standards of developed countries, much worse even than the case study in an over regulated, generous welfare economy across the channel from us. I really don't understand how long the UK can survive as a low productivity , high wage economy.

[Otispunkmeyer]

sooperscoop said:

<unpopular opinion puffin>

Imagine those jobs that take intelligence, dedication, decades of effort and smart decision making. Say, surgeon, Professor, Army General, principal engineer, barrister. All those jobs earn maybe 100-200k.

So all these f***kers 'earning' millions through business deals and trading. Are they really smarter and better than these people? I say no. Everything they make is built on the backs of generations of hardworking people who built this country. Take their f***king money and plough it back in.

principal engineer and 100-200k. Dream on!

[PhillipM]

Simple economics I'm afraid, it's easier to make money if you're rich than it is if you're poor, that's never going to change.