Hacker News Reader

Comment by endisneigh | Hacker News Reader

I’m unconvinced that inequality matters. A better set of questions would be one like: how much does your parents (lack of) success predict your own? How likely are you to attain some arbitrary yet desirable standard of living, etc.

Inequality is related to these things but doesn’t necessarily block them.

View on HN

The answer to your question is in the US there is less economic mobility than most of its peer countries.

https://www.brookings.edu/wp-content/uploads/2016/07/02_econ...

Economic mobility studies are interesting, but there's a fundamental issue with the way all of them look at things: they're measuring relative success, not absolute. Of course it's easier to move between deciles if the distribution of income is flat, but the net result of the movement also has less actual impact. It's also zero-sum: everyone moving up from the bottom decile has to be replaced by someone! Overall quality of life is the metric that should be optimized around, not economic mobility.

Measured by what metric, mean, median income? Work/life balance? Quality of life is such a broad and nebulous term, any two measurements can come to completely different results so it is largely useless.

Sure, you probably can't come up with a metric that quantifies the whole of human experience, but picking any of those is going to be better than picking a metric that is completely unrelated to quality of life!

The comment I replied to asked about this specific metric.

Beyond that, when I was growing up US superior economic mobility was touted as one of the key characteristics of American greatness. Its been interesting to watch the conservatives that were the biggest cheerleaders for this and other greatness indicators now make excuses when empirical data challenges these myths.

Could this be explained by heritability of natural abilities + high economic mobility in the past?

Inequality has been found to cause crime, poor health, child poverty (ie something that prevents children from developing properly and reaching the same economic productivity as their peers), etc. Some effects are felt by the rich. For example, my options for a partner are limited to those of similar income due to inequality and a desire for a certain lifestyle (amount of cooking at home, amount of holidays etc)

https://en.m.wikipedia.org/wiki/Effects_of_economic_inequali...

Inequality is also correlated to children having the same income level as their parents.

https://en.m.wikipedia.org/wiki/Great_Gatsby_curve

There is some interesting models that show that equality is essentially a phase transition. Once you go beyond a level of inequality it becomes completely unequal (concentrated in essentially one actor) unless worked against [1] . I would argue it follows that those societies become also socially immobile, because one actor controls everything.

[1] https://www.scientificamerican.com/article/is-inequality-ine...

If inequality goes beyond skill inequality then it is a sign of an inefficient market. So far every person or blog I have seen that says inequality is good has completely ignored or even wants artificial inefficiencies to maintain that inequality. But then they do a post rationalization and say that inequality is good because it reflects skill differences.

Inequality matters because 90% of it is pointless.

Outcome should still be proportional to effort and skill however.

There are many top-heavy systems where the top benefits far more than the middle even though the middle is close to as good. Consider sporting events where the second place receives 1/3 of the price of the winner, even if it was a very close finals. Yes, the winner played better, but not to the extent of warranting double the earnings.

Not sure how that’s possible as long as compound results exist.

> Outcome should still be proportional to effort and skill however.

It seems to me that this is an unsolvable or at least a very hard problem. Ask 10 people about what they think the correct and fair compensation is and you’ll get 10 opinions. It is difficult to quantify effort and skill. If a very talented person produces better results - with less effort - than someone less talented but very hard working, who gets compensated more? These are tough questions to answer.

> Yes, the winner played better, but not to the extent of warranting double the earnings.

I am curious about these sporting events. Please help me understand them better.

For instance, The French Open awards double the money to the winner it does to the runner up.

Compare this with the word chess championship, where it is often split 60-40%, or the found is often bound to performance differences. A victory by a sweep incurs a larger percentage for the winner.

The caveat with sports is that for many of the sorts of athletes that win major leagues/tournaments, prize money is not their only source of income. As an extreme example Roger Federer recently went over a year without playing a single game and still earned an estimate of $90 million during that time.

The caveat to my caveat is of course the winning a major tournament also significantly increases all those other sources of income.

>but not to the extent of warranting double the earnings

It's a close finals because of the difference in reward between 1st and 2nd. If they were the same then the finals match would not matter financially as whether you win or lose you earn the same amount.

I'm not advocating for a flat pay structure for athletes, but if you think the world class athletes only give it their all because they'll get paid more, you have a pretty distorted view of athletes.

I've watched first hand teams change their playstyle depending on how much prize money is available. It's the difference between playing to have fun and playing super sweaty.

For sporting events the ability of interest is attracting sports customers. You might argue that metaphorical Nike is mis-pricing top tier competitors, but that's Nike's fault and Nike's prerogative.

I would go a step further and say it’s a feature and not a bug. There are no robust ecosystems in nature where there is equality between all members of that system. The most robust ecosystems are those where you have the greatest diversity of species which correlates with inequality between them. Personally I don’t see how a modern society at scale could ever be equal and fiction. Equality really only works locally and even then has its limitations.

Equality in opportunity and equality in outcome are two different things. Even that aside, asking for a baseline equality in living with dignity has nothing to do with diversity of species.

>The most robust ecosystems are those where you have the greatest diversity of species which correlates with inequality between them

I would love to know how you came to this conclusion. Different species occupy different niches when there is a robust ecosystem and there is nothing like inequality between them. There is symbiosis and inter-dependence, but I have not seen one species turn on other for "inequality".

I would be careful drawing analogies from nature. There is no support that shows that there is any equivalence between diversity and economic equality. On top of that if you believe it is valid draw parallels from nature, you need to explain why there should be private property, as no such concept exist in nature (as well as many of the other rules we quite happily accept).

I don't think many people are claiming that the goal should be "no inequality", and that's certainly not what one sees in Europe, so I don't think that argument is relevant.

Clearly society at large can still function in Europe with reduced inequality compared to America.

I rather see the opposite. A society cannot live long if it has too much inequality. From inequality comes pressure, that forces the society to adapt or break.

Military rule originates from the fact that the previous rulers thought they can suppress the population through so called guard labor. Once guard labor crosses a point, a huge portion of the population does guard labor which also puts them in the position to replace the ruler because the ruler is entirely dependent on this guard labor.

Our societies aren't very stable and they aren't stable because of inequality that goes beyond personal ability.

I find it hard to imagine anything that qualifies as ‘lack of success’ in the context of Europe.

Do you have a house, a car, and children going to college/university? Then you are successful as far as Europe is concerned, and that’s basically everyone.

Of course, that’s been going down the drain in the past 10-20ish years for reasons I’m not sure about. Nobody can buy a €500k home on a median salary any more.

Not every kid in Europe goes to uni though?

But pretty much anyone can afford to go.

Very few of those who don't go to university are doing so for financial reasons.

Not everyone needs a three-to-five-year academic education, but nobody should be blocked because of who their parents were.

Agree. The only thing that should be blocking them is their previous poor performance.

Yes, European universities are quite cheap but the admissions bar is very high. The expectation is that university is a path for a narrow group rather than a credentialing path for everyone. The academic rigor of the incoming students is very high and there are almost no “party schools” populated 75% by idiots who skip class and get hammered.

the admissions bar is very high. The expectation is that university is a path for a narrow group rather than a credentialing path for everyone.

I feel that that varies a lot from country to country. Certainly in Sweden, if you just graduate from any program at any high school (or get a not terrible score on the university entrance exam), you will get into a university if you want. Probably not the university you want, and probably not to study you first choice subject, but you will get in somewhere.

Of course as you say, getting in is far from a guarantee that you'll actually get a degree.

I occasionally rented a car when I resided in Europe, though rarely. Parking was a hassle. I wasn't poor.

>I’m unconvinced that inequality matters.

It matters, but only to some extent. I agree that ideally everyone should meet some basic level of subsistence, and that Africa-like Gini values are undesirable in the long term. Neither, however, are Nordic/Eastern European-like levels, either.[1] Some amount of inequality, it seems, is necessary to drive long-term economic dynamism.

Botswana's Gini is among the highest in the world <https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...>, while Iraq and Egypt's are as low as the Netherlands. Botswana is probably a better near- and mid-term bet than Egypt (and perhaps a better long-term bet than the Netherlands), though, while Iraq might be better than both in the long term; such conclusions imply that Gini just doesn't say anything useful for economic potential, and that absolute figures measuring tangible things are the right way to judge a nation's growth.

The US's Gini is high among OECD countries but closer to the middle when measured worldwide. If that's the "price" we Americans pay for having Microsoft, Apple, Google, Facebook, Netflix (and Hollywood), Intel, Nvidia, Exxon, Boeing, Tesla, Citigroup, Goldman Sachs, eBay, Amazon, Wal-Mart, Levi's, SpaceX, Disney, Pixar, General Electric, Gap, McDonald's, Coca-Cola, and Starbucks, I'm glad to pay it.

[1] Norway's per capita income adjusted by cost of living <https://en.wikipedia.org/wiki/List_of_countries_by_GNI_(PPP)...> is much higher than the US's because of its oil—it's basically a Persian Gulf petrostate relocated to northern Europe—but the US's is ~18% higher than Denmark's and Sweden's, and ~30% higher than Finland's. (And, before you ask, when measured by median net income, the gap between America and other developed nations shrinks but the US still does quite well, at #6 worldwide.) At $41,071 the US has the highest household net disposable income per capita in the OECD <http://www.oecdbetterlifeindex.org/countries/united-states/>, where "disposable income" <http://stats.oecd.org/glossary/detail.asp?ID=46> accounts for healthcare and government benefits.

Reply on news.ycombinator.com