| ▲ | jmathai 14 days ago |
| I don't agree with everything on this channel but Gary's Economics does a good job articulating a perspective that the lowered quality of life is directly related to growing wealth inequality. Gary's angle is mostly based on wealth being a zero sum game. I think new wealth does get created but I agree that the vast majority of wealth is existing assets and their growth probably dwarfs any net new wealth creation. Some links: Gary's Economics on Youtube - whether or not you agree, he articulates his economic view:
https://www.youtube.com/@garyseconomics This podcast where Gary debates with Daniel Priestly who has opposing views.
https://www.youtube.com/watch?v=4yohVh4qcas |
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| ▲ | spacebanana7 14 days ago | parent | next [-] |
| It feels perverse to say, but I feel like the UK doesn't have enough income inequality. The effective pay of a person making £80k per year in London isn't really all that different from a minimum wage worker in social housing. Especially when things like child benefit, student loans, and potential council tax reductions are involved. I think it's better to be at the top of the working class than the bottom of the middle class. |
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| ▲ | pjc50 14 days ago | parent [-] | | This definitely sounds like you don't know anybody in that category and are judging based on a misleading media impression. | | |
| ▲ | spacebanana7 14 days ago | parent [-] | | Don't the numbers speak for themselves? £80k a year works out at £4,166.14 per month (assuming plan 2 student loan and 0 pension contributions). Full time minimum wage works out at £25,397.00 per year or £1,819.48 per month (assuming no student loan or pension contributions). That works out as a difference of £2,346.66 per month. It's plausible the cost difference between social housing and private rent for a 3 bed in Westminster could make up that difference alone. Westminister social housing is obviously a favourable case, but we also have to consider benefits: In the scenario of 2 kids on that min wage salary it seems like you'd get £34.15 per month in universal credit. Whilst small on its own, the universal credit status unlocks many other benefits and perks. Potential discounts of up to 100% of council tax could be possible depending on local authority (avg council tax in London is £157.75 per month). The NHS low income scheme can be accessed: getting free prescriptions and support with health travel. Another big thing would be getting access to social tariffs on energies and utilities. Together these could add up to hundreds of pounds per month. The min wage worker would also child benefit at £187.17 monthly. | | |
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| ▲ | neilwilson 14 days ago | parent | prev | next [-] |
| Gary's angle is wrong. He's got a book to flog and a channel to promote. It's crystal clear we can build new houses and new businesses, so suggesting 'wealth' is a zero sum game is ideological folly. As to his thesis, here's the demolition of mathematics within it: https://birchlermuesli.substack.com/p/copy-garys-badeconomic... |
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| ▲ | samiv 14 days ago | parent | next [-] | | He doesn't suggest that the economy is a zero sum game, but that the distribution of that wealth matters and in our societies we're increasingly distributing wealth unevenly so that tiny minority of people increasingly control and own all the wealth, assets and means of production thus depriving other people of economic opportunities and crippling the economies. In your example of building more, in order to a new building get erected someone owns the land, someone owns the materials, someone owns all the assets and the capital required to build. The people who invest to this will of course want to turn a profit on it. | | |
| ▲ | neilwilson 13 days ago | parent [-] | | "someone owns the land" In England, only the King owns the land, and Parliament can deploy any resources in the UK it wishes by simple Act of Parliament. The only other thing there is is human labour, and that can similarly be deployed if we choose to. As we discover every time we go to war. So no there is no cabal of hoarders preventing anything, and no shortage of stuff or money. All that is preventing regeneration is the political will to do so. In reality Gary is a member of the Outer Party, and he wants to take money off the Inner Party and give it to his mates so they can all play at looking after the Proles while value signalling to one another. |
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| ▲ | jmathai 14 days ago | parent | prev [-] | | I'm neither an economist or mathematician. But I'm smart enough to observe my surroundings. I observe that the middle class is shrinking rapidly. Wealth concentration is increasing rapidly. Income has not kept up with the price of goods. And it's increasingly difficult for working people to accumulate wealth. Can you point me to other theories which articulate the cause of my observations? | | |
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| ▲ | aaronbaugher 14 days ago | parent | prev | next [-] |
| New wealth can be created, but it seems like at least since the 90s, we've been in a pattern where the people with most of the wealth would prefer a sort of stasis, because that way their chunk of the pie doesn't get smaller by comparison to the rest. They'd rather have slow, managed, inflation-swallowed "growth" than the ups and downs that accompany leaps forward but sometimes change who is on top. So we've gone from "everyone will have flying cars" to "the rest of you will eat bugs." Castles and jets for the few; austerity for the rest of us. Which certainly isn't new, but it's not what was promised, or what seemed possible within living memory. |
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| ▲ | riehwvfbk 14 days ago | parent | prev [-] |
| New wealth "creation" is a lie. It only looks that way because of devaluing currency and population growth. No conspiracy theory beliefs required to see this one. At the end of the day, what we are buying and selling is compute time on our brain CPU cluster. We can reshuffle what gets our attention, and the relative cost of things can change, but ultimately the only way to increase "wealth" is to get more underlying resource: human brainpower. I see the counter argument coming from a mile away: yeah, but your poor is not your grandfathers poor. You have an iPhone, gramps did not. My counter is again simple: relative value. Electronics were a frontier at the time, and are a commodity now. They are now cheap, and this is compensated by a huge increase in the cost of basics like housing. |
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| ▲ | spacebanana7 14 days ago | parent | next [-] | | > New wealth "creation" is a lie. Perhaps the bigger issue is old wealth destruction. We live in a world of effectively infinite low cost electronics, clothes and food, but the things which used to be abundant are now actually quite scarce. Housing is most obvious example here - but the costs of driving (excluding vehicle purchase), childcare, wedding, and energy are now radically higher than ever before. In these areas it feels like we've gone backwards in productivity. | |
| ▲ | AnimalMuppet 14 days ago | parent | prev | next [-] | | I take some silicon from high-purity quartz in North Carolina. I make CPU chips out of them. Have I not created wealth? Is not the CPU chip more valuable than raw, high-purity quartz? | | |
| ▲ | aaronbaugher 14 days ago | parent | next [-] | | I planted $10 worth of potato seed this year, and I'll be harvesting at least $100 worth of potatoes in a few months. It would take a lot of economics books to convince me I haven't created wealth. Unless they've redefined "wealth" to the point of uselessness as a concept. | |
| ▲ | Spooky23 14 days ago | parent | prev [-] | | It’s lower than you think as it has high present value, but is a waste product in less than a decade. |
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| ▲ | 9rx 14 days ago | parent | prev | next [-] | | > New wealth "creation" is a lie. Wealth is created by taking less valuable inputs and producing something new of greater value. For the HN crowd, that might mean using a little energy and a cheap computer to produce software that provides something even more value than the sum of its parts. Clearly you can create wealth out of "thin air". Perhaps you mean in the net? Where new wealth is created, equal old wealth must be destroyed? But wherein that aforementioned software was additional value destroyed in order for the net wealth to remain the same? > It only looks that way because of devaluing currency and population growth. Not really. While we often measure wealth in currency, which is subject to fluctuations over time, wealth is not the measurement itself. In the same vein, the physical distance you currently know as a kilometre will still be the same distance even if we redefine the kilometre. | |
| ▲ | jddj 14 days ago | parent | prev [-] | | Leaving wealth to one side, do you think value creation is a lie? |
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