Wealth inequality grows.

[Dr Jekyll]

oyster said:

And company success is not rewarded proportionately to employees and shareholders.

Nor is failure.

[Bodo]

Martin4x4 said:

LucreLout said:

Extreme wealth differentials become increasingly irrelevant the more polarized the top set become. Make every billionaire into a trillionaire and I'll feel zero impact and nor will you. Normal people aren't competing against them for food, housing, education, or work. It matters not how rich Britains top one percent are; it matters to me & mine only how much wealth I have with which to house, feed, and educate my family.

This is ignorance of the highest order. It is well document economic fact (c.f. Gini coefficient) that concentration of wealth slow the velocity of money, reduces economic activity and does limit everybody else's opportunities and global wealth.

Edited by Martin4x4 on Friday 23 January 10:16

Martin, I think this was discussed earlier in the thread. The scientific standpoint that wealth inequality harms a prosperous society reference all back to wealth inequality.
To provide an example: with rising wealth inequality, the share of poor people rises
Whilst this is a logic consequence, we need to look at the definition of poverty assumed: anyone who earns below xx% (varies) of the average (varies) is considered to live in poverty. It's relative to the gross wealth available, and does not consider wealth in absolute terms; ie. you wouldn't influence the definition, if you tripled every parties wealth - the inequality remains the same.

Even though people get more wealthy in absolute terms (depicted by their position in Maslows hierarchy of needs), they have an issue with people having a faster growing wealth.

So, back in the day, when wealth inequality was a its lowest point in western Europe, the richest had a house where they couldn't live in all rooms at once, and the poorest had to eat what they just found; and wouldn't know if they were starving the next winter or eaten by a wolf.

Today, they are even a lot poorer than the richest, but they can read and write, get free health care, don't fear to get eaten by a wolf, fly to Spain, drink cold beer when they like to, and can watch their favourite football match in their own flat provided by society. And that's before they decide to contribute anything to a prosperous society.

An economic system that caps wealth, motivation and personal freedom will have almost no wealth inequality, but a lower standard of living for everyone. Don't believe me? Look at North Korea.

This thread goes on for pages, but contributors who have an issue with wealth inequality were unable to explain why.

[Blackpuddin]

The value of this guy's severance payoff tops that of the company's 17,500 employees put together.
http://www.huffingtonpost.ca/2015/01/21/target-ceo...

[scherzkeks]

LucreLout said:

You seem not to understand what the Gini coefficient is. It's a measure of income distribution, not a measure of the velocity of money, economic activity, or opportunity. Back to school!

Actually he appears to understand it quite well. He pointed out that it is directly related to wealth concentration, and that where wealth is concentrated, the velocity of money is slowed.

Back to school!

[turbobloke]

Blackpuddin said:

The value of this guy's severance payoff tops that of the company's 17,500 employees put together.
http://www.huffingtonpost.ca/2015/01/21/target-ceo...

Equality - if all the employees were paid even close to that level the company would have been in trouble long ago

As the article points out, the package is $16 million plus deferred compensation plus stock options plus retained pension.

It's private money, the owner(s) can do with it what they like even when it seems weird in context.

[crankedup]

don4l said:

crankedup said:

LucreLout said:

crankedup said:

Nobody has convinced me that extreme wealth in just a few hands is a good thing, and that extreme wealth is growing within those same few hands. Nobody can see a problem with that, except a couple of other posters.

We don't have to convince you, as we're happy with the way the system works. You want to change how it works for, frankly, bizarre and seemingly unclear reasons, so you need to make the case for change.

What's with the 'we', do you imagine you're in an internet clic or is it the Royal 'we'?

Did I say I wanted to change the current system, no I did not!

So, are you happy with the current situation, or do you think that we could have a better system?

If you think that we could have a better system, then please feel free to share your views.

Mali and Chad have a much smaller "wealth gap" than the UK. Even the poorest people in the UK have unimaginable wealth compared to the poor in those parts of Africa.

I get the impression that you would be much happier if we didn't have a few hundred wealthy people even if it meant that 10's of thousands would die of starvation.

Why is it that when faced with a debate topic some posters are reduced to 'if you don't like it then suggest a better system'. In you're case why not put forward you're POV in a positive frame. Are you completely at ease with the likes of Murdock and the Late Maxwell for example manipulating and affecting 'ordinary lives'. These are the questions which bring the debate forward and add interest.

[Dr Jekyll]

crankedup said:

Are you completely at ease with the likes of Murdock and the Late Maxwell for example manipulating and affecting 'ordinary lives'. These are the questions which bring the debate forward and add interest.

What on earth have Murdoch and Maxwell got to do with wealth inequality? Maxwell was a negative millionaire by the time he finished. And how do they manipulate 'ordinary lives'?

[crankedup]

LucreLout said:

crankedup said:

What's with the 'we', do you imagine you're in an internet clic or is it the Royal 'we'?

Did I say I wanted to change the current system, no I did not! As a debate it is an interesting topic, as shown with the number of posts, last time I thought about it this is exactly what a forum is intended for.
Turning to your 'frankly bizarre and seemingly unclear reasons' (I don't want to change anything')maybe it's your lack of understanding of the subject matter that is the problem for you. True I haven't put a case as such but I have given a number of examples of how extreme wealth can influence World Politics within differing Countries. If that is not enough for you why not come back, with you're reasoning, and dispute the examples?

We in this instance is the people you seem to think should be convincing you of something rather than simply pointing out that your views as you've expressed them are illogical and irrational.

Extreme wealth differentials become increasingly irrelevant the more polarized the top set become. Make every billionaire into a trillionaire and I'll feel zero impact and nor will you. Normal people aren't competing against them for food, housing, education, or work. It matters not how rich Britains top one percent are; it matters to me & mine only how much wealth I have with which to house, feed, and educate my family.
The problem you perceive with wealth inequality is really just jealousy and envy. Socialism, in a word.

How quaint, you put yourself forward to speak for others.
You perhaps need to understand that it is a subject under discussion by a wide extreme of leading Global leaders, not just me
If you genuinely feel that you're statement is you're reality then fair enough. Being so however you miss the important points regarding wealth = power and how that affects every person living within the developed World, to suggest I am envious and jealous of the uber wealthy is a rather juvenile and flaccid comment demonstrating you're apparent lack of consideration into the debate topic. You may well be comfortable with the notion that uber wealth is not affecting you're life, in which case you represent one of the benign masses within the population, if we all reacted as such the World would be a poorer place.

[Martin4x4]

turbobloke said:

Martin4x4 said:

LucreLout said:

Extreme wealth differentials become increasingly irrelevant the more polarized the top set become. Make every billionaire into a trillionaire and I'll feel zero impact and nor will you. Normal people aren't competing against them for food, housing, education, or work. It matters not how rich Britains top one percent are; it matters to me & mine only how much wealth I have with which to house, feed, and educate my family.

This is ignorance of the highest order.

No it isn't.

Martin4x4 said:

It is well document economic fact that concentration of wealth slow the velocity of money, reduces economic activity and does limit everybody else's opportunities.

If a government wants to increase the velocity of money, they will do well by decreasing the tax burden on low income and middle income workers. This will make more difference than fiddling with tax levels on high earners either way. Another key point often made but then forgotten is that standards of living are driven by men and women who create things that improve the quality of life for others, these people are not looking at the velocity of money when thinking up and developing life-enhancing concepts and the products/services that follow, which people want to buy. However, incentives to develop concepts to market need to remain in place and high taxation for whatever reason is a significant disincentive.

A high velocity of money economy is one where low to middle income earners pay low taxes and where it's easy for enterprising individuals to accrue wealth - over time, everyone benefits. Try dispelling ignorance with a dose of that.

No. The Gini coefficient is orthogonal from taxation; it tells us that a system with more equitable distribution of income will grow faster than systems that are less equitable.

Try this

http://www.ted.com/talks/richard_wilkinson

[crankedup]

oyster said:

Forget the billionaires, invariably their success generates wealth further down the tree and they've had to risk their own money to get there .

For me the real story is the multiple between top earner and bottom earner in medium/large companies. Companies where the guys at the top are not risking their own money but are taking rewards commensurate as if they had invested their capital.

And company success is not rewarded proportionately to employees and shareholders.

100% agree with this, as many of my fellow posters will know and understand, much to many gasps of their angst! Just thought it was time to have a debate about the extreme wealth.

[Martin4x4]

LucreLout said:

Martin4x4 said:

This is ignorance of the highest order. It is well document economic fact (c.f. Gini coefficient) that concentration of wealth slow the velocity of money, reduces economic activity and does limit everybody else's opportunities and global wealth.

You seem not to understand what the Gini coefficient is. It's a measure of income distribution, not a measure of the velocity of money, economic activity, or opportunity. Back to school!

No. You've failed to understand what I said. A lower velocity of money is a _consequence_ of a high Gini index, not a measure of it. There is a strong positive correlation of a low Gini Index (more equality) with increased economic growth and a high Gini Index with low economic growth.

[crankedup]

Dr Jekyll said:

crankedup said:

Are you completely at ease with the likes of Murdock and the Late Maxwell for example manipulating and affecting 'ordinary lives'. These are the questions which bring the debate forward and add interest.

What on earth have Murdoch and Maxwell got to do with wealth inequality? Maxwell was a negative millionaire by the time he finished. And how do they manipulate 'ordinary lives'?

These are/were two minor examples of how extreme wealth can be used to manipulate 'ordinary people'. You do realise that Maxwell was able to use his influence via power generated by his wealth. He left the people who worked for him penniless in their pension fund. He is a prime example of wealth = power but in his case it went into delusion, kind'a power drunk which led to his ultimate downfall. Do you not agree?
Murdoch has manipulated his own agenda by using his wealth through his media empire and directly into Governments. That is power through wealth.Only extreme wealth can give rise to these examples as neither seem(ed) gifted with intelligence above a fairly basic level.
The continuing problem in the thread is confusion between extreme wealth and working man wealth, this confusion is partly my error in including 'the top 1%' as a parameter.

Oh, you will have to excuse me for an hour or so, my cheese on toast is ready

Edited by crankedup on Friday 23 January 11:57

[Martin4x4]

Bodo said:

This thread goes on for pages, but contributors who have an issue with wealth inequality were unable to explain why.

The Gini coefficient explains wealth inequality perfectly, shows why a high Gini index is bad and a low Gini index is good. The burden of proof is on those who think a high Gini index is a good idea when it very clearly highlights a retarded economy.

[MrCarPark]

Martin4x4 said:

LucreLout said:

Martin4x4 said:

This is ignorance of the highest order. It is well document economic fact (c.f. Gini coefficient) that concentration of wealth slow the velocity of money, reduces economic activity and does limit everybody else's opportunities and global wealth.

You seem not to understand what the Gini coefficient is. It's a measure of income distribution, not a measure of the velocity of money, economic activity, or opportunity. Back to school!

No. You've failed to understand what I said. A lower velocity of money is a _consequence_ of a high Gini index, not a measure of it. There is a strong positive correlation of a low Gini Index (more equality) with increased economic growth and a high Gini Index with low economic growth.

You're confusing the wealth Gini with the income Gini, as are most people on this thread.

[LucreLout]

scherzkeks said:

Actually he appears to understand it quite well. He pointed out that it is directly related to wealth concentration, and that where wealth is concentrated, the velocity of money is slowed.

Back to school!

The wealth concentration IS the gini coefficient but there is NO relationship implied it in fact between that and the velocity of money. They are to wholly unrelated measures with no causal relationship.

Not an epic fail on your part yet, but you're getting warmer.

[turbobloke]

MrCarPark said:

Martin4x4 said:

LucreLout said:

Martin4x4 said:

This is ignorance of the highest order. It is well document economic fact (c.f. Gini coefficient) that concentration of wealth slow the velocity of money, reduces economic activity and does limit everybody else's opportunities and global wealth.

You seem not to understand what the Gini coefficient is. It's a measure of income distribution, not a measure of the velocity of money, economic activity, or opportunity. Back to school!

No. You've failed to understand what I said. A lower velocity of money is a _consequence_ of a high Gini index, not a measure of it. There is a strong positive correlation of a low Gini Index (more equality) with increased economic growth and a high Gini Index with low economic growth.

You're confusing the wealth Gini with the income Gini, as are most people on this thread.

But not all. Apart from that, let's not confuse correlation with causation.

[Bodo]

Martin4x4 said:

Bodo said:

This thread goes on for pages, but contributors who have an issue with wealth inequality were unable to explain why.

The Gini coefficient explains wealth inequality perfectly, shows why a high Gini index is bad and a low Gini index is good. The burden of proof is on those who think a high Gini index is a good idea when it very clearly highlights a retarded economy.

Now we're moving in the right direction; please explain why you think the Gini index explains why wealth inequality is a bad thing for a prosperous society.

[scherzkeks]

LucreLout said:

The wealth concentration IS the gini coefficient but there is NO relationship implied it in fact between that and the velocity of money. They are to wholly unrelated measures with no causal relationship.

Not an epic fail on your part yet, but you're getting warmer.

Well, technically, if you want to nit-pick semantics it measures income distribution. Regardless, it is an indicator of inequality, and there are studies that show that where inequality is great, money velocity is slow.

Or in simple terms: when the majority of the pop. is living hand-to-mouth, they can't spend much. In the same vein, if your well-heeled neighbor earns 10x more money than you, this does not automatically mean that he spends 10x more than you, as studies have shown a positive correlation between high income and savings. Regardless, when wealth is too highly concentrated at the top the result is slow economic growth. So there is most defnitely a relationship between gini and velocity.

So is that epic fail on your part or are you getting warmer?

[LucreLout]

Martin4x4 said:

No. You've failed to understand what I said. A lower velocity of money is a _consequence_ of a high Gini index, not a measure of it. There is a strong positive correlation of a low Gini Index (more equality) with increased economic growth and a high Gini Index with low economic growth.

It's hard to know where to begin.....

Correlation does not equal causality.

The UK, US, and China are all examples of countries with very high gini coefficients that also have world leading growth.

Velocity of money is unrelated to equality, save that absolute equality requires zero velocity if money, and delivers only abject poverty.

[LucreLout]

crankedup said:

You perhaps need to understand that it is a subject under discussion by a wide extreme of leading Global leaders, not just me

You perhaps need to understand the difference between talking and delivering.

Pretty well every poster in this and any other economics/wealth thread tries their best to educate you, and still you actively refuse it. Your chips are showing.