hank.walker@UNH.CS.CMU.EDU (08/05/86)
This concentration of wealth is rediscovered or commented upon every so often. While a significant fraction is controlled by the old family fat cats that might come to mind, a large part of it is simply due to the fact that wealth is a magnification of income differences. The more you make, the more you can proportionately save and invest. A recent study of wealth among blacks and whites makes this obvious. If you consider that the average income is something like $25,000, and some people have incomes of several million dollars per year, then the people at the top are earning 40 or more times the average. The amount available for saving and investment is probably double that. So is it any surprise that the top 0.5% holds 33% of the assets? If the top 0.5% earn $1M, and the other 99.5% earn $25,000, then my simple analysis implies the top 0.5% holds 29% of the assets, which is close to the actual value. The issue then is the range in incomes, rather than the range in wealth. Is it wrong that this huge range exists? Should taxes siphon it off? I would claim that for the most part, these incomes reflect value provided to the employer or customers. If anything, I would claim that we don't see enough variation. It is well-known that some programmers are ten times more productive than others, but I don't see a 10:1 range in pay scales. Is it wrong for Sam Walton to amass $4B with the success of WalMart stores? I know several people that became millionares by founding a small company that grew big. They certainly took a big risk, and provided their customers with value at least as great as their wealth. I say don't begrudge their success. -------
testa-j%OSU-20@OHIO-STATE.ARPA.UUCP (01/20/87)
"Keith F. Lynch" <KFL%MX.LCS.MIT.EDU@MC.LCS.MIT.EDU> writes: >[The government] should serve everyone, but only to the extent of >preventing individual rights from being violated. It should not and >cannot be involved with protecting people from their own economic >misjudgements, or with redistributing wealth, or trying to compensate >for the inequalities of past generations. >... >It should >be evident even to socialists and the feeble-minded that if people >who Then you admit that not all socialists are feeble-minded? :-) >worked are taxed to pay people who don't work, that the net amount of >wealth has not increased. Poverty is conserved. I agree that simply taking from the rich and giving to the poor does not increase wealth; however it does change the amount of poverty (please note that i am not advocating such a simple approach). If wealth were completely redistributed equally, then either everyone or noone would be in poverty, by definition! Thus it cannot be a conserved quantity! (Keith, you should have applied a little of your basic physics reasoning here :-) .) That is, unless you consider a rich person to be in a state of "negative poverty", but i have never heard of this usage before. It has also been argued by you and/or other libertarians that government should not be involved in public education. But does not using tax money to educate those who could not otherwise afford an education *increase* wealth by making more people capable of producing useful things/services/etc? ~joe testa~ ------- -------