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Comment by ryandrake | Hacker News Reader

The existence of billionaires and millionaires negatively affects everyone else's standard of living via gentrification. Imagine you live in a community of 1000 middle class people, all making, say, $30K/yr to $60K/yr. You make $45K/year so you're about average. You can all afford homes, goods, and so on. Suddenly, 10 millionaires move in. Housing prices start to rise a little bit, grocery stores get a little more upscale and more expensive, car dealers see $$$ and jack up their prices. Then, a billionaire moves in. The market responds again. Suddenly, you're not doing so good anymore, despite earning the same as you were before the millionaires moved in. Now scale that up country-wide or world-wide. The more wealthy people there are, the higher the average cost of everything.

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The gentrification argument has always felt a little off to me. Like it's missing the point somehow. It's less about billionaires moving in next door, and more about billionaires buying up thousands of "investment properties" that they never intend to live in and being rent-seekers and causing negative externalities that affect the local neighborhood that they never even go to. It's less about local businesses jacking up their prices because they "smell money" in the neighborhood, and more about local businesses getting fucked by the lack of anti-trust enforcement and by local government on the take from billionaires. It's less about the billionaires themselves being the source of the problem, and more about the winners-keep-winning systems that allow people to accumulate so much wealth in the first place.

I guess the reason I make these distinctions is that many reactions that seem like they could be solutions to "gentrification", like running those rich boys outta town, or even something like rent control ... they just don't feel like they're really solving anything. It's an entrenched systemic problem, and the system is huge and interconnected. You can't fix it locally. We need to actually tax the rich. We need to actually enforce anti-trust and consumer protection laws. We need big taxes on properties number 3 through N that go toward subsidizing affordable housing ... or something to that effect. I'm sure others have better ideas than this too. But what we don't need is neighborhood signs that say "no rich people".

> Imagine you live in a community of 1000 middle class people … Suddenly, 10 millionaires move in.

I’m not an economist and there are countless reasons for that, but I can’t imagine that 10 millionaires in a community of 1,000 people would materially change life for the other 990 in the way that you’re suggesting.

Gentrification and unbalanced income strata are real things and real problems, but the 1% aren’t causing them simply by existing.

Gentrification and unbalanced income strata are real things and real problems, but the 1% aren’t causing them simply by existing.

This hits the nail on the head. It's tautological to say "the problem of inequality is caused by there being rich people that cause inequality". It pins the blame on individuals rather than the system they exist within.

Not wanting a class of wealth to exist speaks more about the system than the people.

99% of people who hate billionaires wouldn’t care about a specific person as long as that billionaire wasn’t actively trying to screw over the rest of us in their attempt to win more points.

The difference between you and a billionaire is a billion dollars.

> Now scale that up country-wide or world-wide. The more wealthy people there are, the higher the average cost of everything.

The average income and wealth is higher too.

> The existence of billionaires and millionaires negatively affects everyone else's standard of living via gentrification

Gentrification benefits property owners and is bad for renters. Believe it or not, bad neighborhoods have homeowners too and most of them would love for their bad neighborhood to become better. So it's not like the effects are uniformly negative. Even renters who are able to afford higher rents, or have rent-controlled housing, benefit from living in a safer, cleaner, more prosperous area. Their children's schools will have more involved parents, more funding.

The real issue with wealth inequality is the disproportionate amount of political influence the wealthy have. I have no problem with people being disgustingly rich as long as they don't use their money to influence laws.

> The real issue with wealth inequality is the disproportionate amount of political influence the wealthy have. I have no problem with people being disgustingly rich as long as they don't use their money to influence laws.

Yea, I didn't even go down that path, but you're absolutely right--the fact that money and political power are trivially convertible (both ways) makes the problem even worse. Who doubts that the billionaire in my analogy and the town's mayor instantly become best buddies?

Gentrification is a word that has lost all meaning; and this entire paragraph is a load of nonsense. Not only that, but it wouldn't have anything to do with the parent comment even it it were true. It's a complete rambling non sequitur.

> Suddenly, 10 millionaires move in. Housing prices start to rise a little bit, grocery stores get a little more upscale and more expensive, car dealers see $$$ and jack up their prices

Except that no; prices would almost not budge at all. Each millionaire will buy 2, maybe 3 houses. But they will target the nice and expensive home; the price/demand for middle/low class houses will not change at all.

Same for car; the demand for Rolls Royce will increase and the price there might increase as well if they were being discounted because nobody was buying them. But they will not even look at the Toyota Prius and I don't see the car dealer there saying thinking "This billionaire will definitely buy all my Prisues, so I will increase their price". He will just shrug it off and keep selling his cars to the middle class whose purchasing power didn't move by an inch. The main difference he will see is that maybe the Rolls Royce dealer who could not afford a car himself because he was not selling anything will now be able to buy a Prius. So it's one more customer.

This sounds more like a problem with real estate than with people. The old Georgist schtick of a ~80% land value tax coupled with a citizen's dividend (i.e., UBI for those affected by improvements upon said land) would nip this problem in the bud, eliminating the rent-seeking that causes gentrification.

Keeping with your analogy, we might similarly eliminate rent-seeking on prestige by banning legacy admissions and making applications more quantitative (i.e., test-based) and less subjective.

that is not how it works at all, lol.

Well existence of Europeans negatively affected native Americans. More generally existence of humans negatively affected most other species on earth.

Claiming superiority on narrow conditions like Modern American middle-class-ness is still claiming superiority. I don't see how it is an essentially a morally better position.

Downvotes notwithstanding, if you make $45k but you can afford an actual house, you're pretty much a unicorn at this point in time in the western world (US, Europe, doesn't matter, everywhere's pretty much unaffordable now). Or you gave up on civilization and you bought a property out in the sticks of course.

Either way, you're not going to get 10 millionaires just moving into an area with houses that are so cheap they ignore them as "too cheap" on a realty listing. Even if you're talking about an investment purchase and then they don't move in, themselves. You might have a property developer though, looking to create the next HOA hellscape.

This really isn't a good hypothetical.

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