The most obscene state of the world

[Ironsided]

No really what are you talking about.

The ridiculous lack of actual progress made in the field of economics in general and business administration in particular compared to efforts and trust put into it. Truthy likes it.

 

[Thorgalaeg]

I don't see economics as a scientific field that advances with new inventions and discoveries, but as a political thing where everybody has his own opinion-agenda and tell us his particular version of the story. Much as theoretical physics.

*Run away to hide*

 

[Hygro]

The ridiculous lack of actual progress made in the field of economics in general and business administration in particular compared to efforts and trust put into it. Truthy likes it.

What makes you so sure it’s the academic field of economics and not you as the layman not informed and using that as the evidence of absence?

 

[Ironsided]

I’m not sure. I’m discussing. See it as challenge. Why don’t you present something factual to support the value of economics instead? What are the recent breakthroughs?

So far you have not contributed at all in this discussion except being miffed and obtuse at the questioning of your favourite academic field. I’m all ears and genuinely interested what the latest consensus among economic academia is on this topic today?

 

[Hygro]

The biggest work of the past decade to reach the mainstream was Piketty’s work on inequality. I don’t know what lack of insight you are lamenting in economics which is why I’m asking you to clarify just what you’re talking about.

 

[Ironsided]

I'm talking about why every year things get worse when it comes to inequality. Why half the politicians that attended Davos last year does not feel it worthy of their time this year? Is it the staleness of progress in the academic field or their own inabilities? I have read about Piketty and others take on his work, I believe he was the star of Davos two years ago or so. Still not much progress from there. Is there now a reasonable consensus in the field that Piketty was right or is it still refuted left right and center?

 

[Farm Boy]

Is refusal to implement real progressive taxation a failure of economic understanding, or is it a political refusal to implement real progressive taxation in the face of the changing nature of technology?

 

[Ironsided]

So I skimmed the Swedish wiki-page on Piketty. Not exactly ground-breaking work there (probably more to do with the authors). He thinks taxation is good for redistribution of wealth and he has been able to conclude that the Laffer-curve has very little effect on French economy. There is something about critique of a 1950s Kuznet-curve as well. He also does not believe in trickle-down economy. Not really ground-breaking stuff.

This is very much my problem with this field. It’s so contemporary, vague and brittle that you can’t seem to use it. I would assume it’s mainly to do with ripple effects in society and the fact that human beings and their rules are not at all rational when compared to the rules of say nature. And by ripple effects I mean what is the investment in a high speed train network worth? Depends on a lot of factors doesn’t it?

 

[Hygro]

I'm talking about why every year things get worse when it comes to inequality. Why half the politicians that attended Davos last year does not feel it worthy of their time this year? Is it the staleness of progress in the academic field or their own inabilities? I have read about Piketty and others take on his work, I believe he was the star of Davos two years ago or so. Still not much progress from there. Is there now a reasonable consensus in the field that Piketty was right or is it still refuted left right and center?

I don’t think the people seeking money and power give any craps one way or another what economics professors think would improve our state of affairs. The locus of the problem lies elsewhere.

School will always lag the world. For it to be another way would require creative actors in business and government to exist in a lab. Even Keynes’s insights were in bits and pieces known by bankers and union leaders half a century prior.

 

[Ironsided]

In a secluded lab. Because god knows a bad report from China would change everything. Right?

 

[Farm Boy]

The Middle Kingdom is going to swing the world, my friend. The hegemon could have crushed it with horror the likes the world has never seen, and refrained. The principle challenge in international relations developing for the first half of the 21st is going to be keeping the new budding cold war from turning hot. Destroyer bocce ball is a fraught game.

We survive that one, then India and Brazil will rise. We survive those, Africa will rise. And that's assuming everything goes tolerably with the seas in the meantime.

 

[Ironsided]

You're no farm boy. You're a Piketty in disguise.

 

[Farm Boy]

Never read. zzzzzZZZZzzzzz.

 

[Yeekim]

In theory, there is nothing wrong with billionaires existing.

In practice, the presence of a class of ultra-rich people almost always leads to a tightly networked society that can disproportionately influence policy to their benefit and at everyone else's expense. They can influence elections and any media they own, they can have the ear of politicians through lobbying and exclusive dinners and gifts, and they can coordinate much better than the commoners because there are fewer of them, they have shared interests, they attend the same clubs, their kids attend the same private schools, and so on.

Yes, in theory, a country could childproof its laws enough to prevent an immediate plutocratic coup. In practice, the plutocrats will never relent in their efforts to bend policy and laws to their own ends, and safeguarding laws from them requires a ceaseless watch and united front that general publics usually can't manage.

Can't really argue with that.

It's much safer to prevent anyone from massing that much wealth in the first place.

Is it though? Has any contemporary society been successful in building a society that is rich, but does not have any ultra-rich? How should one even go about it? Progressive income taxes up to 100% (never mind practical enforcement issues)?

Sure it does. Those valuations are based on revenue and future value. If control over that capital flow is concentrated in the hands of one individual, that individual decides how it is spent. That individual is also given outsized political power to ensure that the government doesn't appropriate that capital for public works, for people in need.

Just because it doesn't involve literal taking of money or wealth away from others, doesn't mean there isn't hoarding going on. That $1bn is going to be put to use growing that fortune for the founder and the wealthy people who invested in his company, and not be put to use for anything beneficial to greater society.

Ideally, that fortune should be taxed - progressively, at that - and taxes spent for benefit of greater society. The challenges related to concentration of political power are certainly serious and present a neverending struggle - but this model has been shown to work... occasionally, at least.

 

[Farm Boy]

Progressive income taxes up to 100% (never mind practical enforcement issues)?

The practical enforcement issues become the principle issue. Most of the people who I know who are not rich that do not like progressive income taxes fundamentally do not understand their mechanic. They think the highest percentage tax rate applies to all income earned, not an increasing percentage as certain thresholds are passed. Combine that explanation with an explanation of how much interest per year somebody with 4 million dollars in the bank earns without doing any work(I usually math it for them at 3%), and the lifetime expected income of their children should they never embark on a career, and I've almost always gotten Republicans on board with the principle. Or, as my dad once said of progressive taxes on the topic of people earning millions off of investments, "Well, that's how it always used to be."

Tolls. Lotto. Soda tax. Cigarette tax. Puh. Backwards funding. That should be town/village level stuff. I suppose I can cut states a little bit of a break.

 

[Phrossack]

Can't really argue with that.

Is it though? Has any contemporary society been successful in building a society that is rich, but does not have any ultra-rich? How should one even go about it? Progressive income taxes up to 100% (never mind practical enforcement issues)?

It may not be feasible to prevent the creation of billionaires entirely, but progressive taxes, living wages, and safeguards against the influence of money in politics can go a long way to preventing the creation of a dug-in plutocracy.

 

[Zardnaar]

I think billionaires and millionaires are fine but that they should pay tax. I'm not sure what the right amount is but I suspect the upper limit is really around 40%-50%. Inheritance taxes should be applied as well.

Much higher than that and the rich either won't pay, seek to avoid paying or will start putting their money into politics in order to go the other way which is what lead to Reaganomics/Thatcher/Rogernomics etc in the 80's (broadly speaking neo liberal economic policies). Or they might just move so instead of getting even 20% you get 0%.

So some sort of progressive tax scaling up to 50% at the top+ inheritance tax is what I would personally do. Regulating the finance markets and passing and applying anti competitive laws would also help. Basically jump back to the 1950's but lower the top taxes from the 70% or so they used to be (which very few people actually paid).

 

[Yeekim]

The practical enforcement issues become the principle issue. Most of the people who I know who are not rich that do not like progressive income taxes fundamentally do not understand their mechanic. They think the highest percentage tax rate applies to all income earned, not an increasing percentage as certain thresholds are passed. Combine that explanation with an explanation of how much interest per year somebody with 4 million dollars in the bank earns without doing any work(I usually math it for them at 3%), and the lifetime expected income of their children should they never embark on a career, and I've almost always gotten Republicans on board with the principle. Or, as my dad once said of progressive taxes on the topic of people earning millions off of investments, "Well, that's how it always used to be."

Tolls. Lotto. Soda tax. Cigarette tax. Puh. Backwards funding. That should be town/village level stuff. I suppose I can cut states a little bit of a break.

Leaving appalling ignorance of general population aside... I am entirely on board with progressive taxation, but I baulk at the idea of a 100% bracket, or (in other words) imposing a ceiling on how much wealth one is allowed to have.
Even if it was somehow magically enforceable.

It may not be feasible to prevent the creation of billionaires entirely, but progressive taxes, living wages, and safeguards against the influence of money in politics can go a long way to preventing the creation of a dug-in plutocracy.

Absolutely.

 

[Naskra]

I like billionaires; they are the blue whales of the financial ecology. When they breach and slap their flukes, things happen. You would not have the shiny toys you do if there were no billionaires to push big stacks of capital around.

 

[peter grimes]

I'm talking about why every year things get worse when it comes to inequality. Why half the politicians that attended Davos last year does not feel it worthy of their time this year? Is it the staleness of progress in the academic field or their own inabilities? I have read about Piketty and others take on his work, I believe he was the star of Davos two years ago or so. Still not much progress from there. Is there now a reasonable consensus in the field that Piketty was right or is it still refuted left right and center?

"Every year climate scientists put out research papers decrying the rise in CO2 emissions, yet every year the amount of CO2 in the atmosphere increases. Why does the nation responsible for most of the historical CO2 emissions not stay in the Paris Accord, is it not worthy of their time? Is it the staleness of progress in the academic field? Bill McKibben and Michael Mann spoke at the last IPCC conference last year. Still not much progress from there. Is there now a reasonable consensus in the field that Mann was right?"

I hope this analogy illustrates the source of the problem.

It's not the economists. It's not the climate researchers.