The declining quality of our supply of extremely rich people - a rant

[masako]

Economic theories are flavors of the same dish. Shocking.

What's interesting to me is the disdain that the general populous always has for those at the "top," while simultaneously wanting to be them. Pretty indicative of exactly how unsustainable any system is (given enough time).

I wish I could share your optimism. In some parts of Latin America, it's apparently been mostly the same people running the show for all the time since the initial Spanish and Portuguese conquest. And that was a long time ago.

If you mean (descendants of) European elites, than yeah, but I hope you don't mean the absolute monarchs...cause that's not really a thing and hasn't been since early in the 20th century. (with some notable exceptions that are not colonial)

[Raphael]

What's interesting to me is the disdain that the general populous always has for those at the "top," while simultaneously wanting to be them.

Yes.

I wish I could share your optimism. In some parts of Latin America, it's apparently been mostly the same people running the show for all the time since the initial Spanish and Portuguese conquest. And that was a long time ago.

If you mean (descendants of) European elites, than yeah, but I hope you don't mean the absolute monarchs...cause that's not really a thing and hasn't been since early in the 20th century.

No, I didn't mean the absolute monarchs. Just the local elites.

[Ares Land]

What's interesting to me is the disdain that the general populous always has for those at the "top," while simultaneously wanting to be them. Pretty indicative of exactly how unsustainable any system is (given enough time).

Disdain and resentment of the billionaires should not be encouraged. It moves things from the systemic to the personal, and it's not a personal issue.
The first problem is that when people can't get at the billionaires, or once you've got rid of them and nothing much improves, the obvious next step is turn on the koulaks and petty bourgeois, and at this point things turn ugly real fast.

The second problem is that the issue of inequality is widespread and systemic.
The widespread trend of hating Elon Musk is both justified: he's obviously an asshole (and for some reasons he insists on making this public knowledge) and worrying. The trouble is, you could get rid of Elon Musk entirely and absolutely nothing would change. For that matter, Elon Musk could be an excellent human being and the terms of the problem would be exactly the same.
In my view, the problem with the current situation is:
a) the increasing concentration of wealth. Such a situation can be tolerable when the economy is rapidly growing. Who cares if some people get huge amounts of pie, when everyone gets a decent and increasing share of it anyway? The problem is, we can't have much growth anymore. (Note that this only applies to the developed world!) Standards of living and technology are at a stage where there's little point for more improvement. Besides, there's a lot of reason to believe growth needs to be curtailed for ecological reasons anyway.
So the pie is going to stay at about the same size, maybe growing a little bit. At this stage of the economy, this means any large concentration of wealth is wealth that could be more usefully employed elsewhere.
b) the second problem is the disconnect between wealth, monetary valuation and the actual, real-world value of things. Microsoft makes okay software these days, but it's strange to think their contribution is valuated at more than 2 trillion. More generally, the weight of the entire tech sector is huge, incredibly so considering most of what we'd expect from tech was already in place in 2007. (And honestly, we'd probably be just as happy and productive with 2000 technology)


Not that I'm even really advocating socialism. Nor am I against it. I'm just more interested in specific measures than broad ideology.

[Raphael]

What's interesting to me is the disdain that the general populous always has for those at the "top," while simultaneously wanting to be them. Pretty indicative of exactly how unsustainable any system is (given enough time).

Disdain and resentment of the billionaires should not be encouraged. It moves things from the systemic to the personal, and it's not a personal issue.
The first problem is that when people can't get at the billionaires, or once you've got rid of them and nothing much improves, the obvious next step is turn on the koulaks and petty bourgeois, and at this point things turn ugly real fast.

The second problem is that the issue of inequality is widespread and systemic.
The widespread trend of hating Elon Musk is both justified: he's obviously an asshole (and for some reasons he insists on making this public knowledge) and worrying. The trouble is, you could get rid of Elon Musk entirely and absolutely nothing would change. For that matter, Elon Musk could be an excellent human being and the terms of the problem would be exactly the same.

I mostly agree with those points, but, with human psychology being what it is, I wonder if thinking a lot about systemic matters can ever motivate most people to take some kind of political action as well as resentment of billionaires can.

b) the second problem is the disconnect between wealth, monetary valuation and the actual, real-world value of things. Microsoft makes okay software these days, but it's strange to think their contribution is valuated at more than 2 trillion. More generally, the weight of the entire tech sector is huge, incredibly so considering most of what we'd expect from tech was already in place in 2007.

I kind of wonder how much inflation there would be if the people who own those $2 trillion Microsoft share would try to spend all that money on actual physical objects (no matter what kinds of actual physical objects).

(And honestly, we'd probably be just as happy and productive with 2000 technology)

Hm. Now you got me thinking. I really like having basic multimedia functionality on my computer. I didn't have that in 2000. Then again, people with more money than me probably did. On the other hand, I don't think I'd want to go back to the internet speeds that even rich people got for the "last mile" back in 2000.

Not that I'm even really advocating socialism. Nor am I against it. I'm just more interested in specific measures than broad ideology.

Would temporarily nationalising everything count as a "specific measure" or as a "broad ideology" to you?

[WeepingElf]

What's interesting to me is the disdain that the general populous always has for those at the "top," while simultaneously wanting to be them. Pretty indicative of exactly how unsustainable any system is (given enough time).

Disdain and resentment of the billionaires should not be encouraged. It moves things from the systemic to the personal, and it's not a personal issue.
The first problem is that when people can't get at the billionaires, or once you've got rid of them and nothing much improves, the obvious next step is turn on the koulaks and petty bourgeois, and at this point things turn ugly real fast.

The second problem is that the issue of inequality is widespread and systemic.
The widespread trend of hating Elon Musk is both justified: he's obviously an asshole (and for some reasons he insists on making this public knowledge) and worrying. The trouble is, you could get rid of Elon Musk entirely and absolutely nothing would change. For that matter, Elon Musk could be an excellent human being and the terms of the problem would be exactly the same.
In my view, the problem with the current situation is:
a) the increasing concentration of wealth. Such a situation can be tolerable when the economy is rapidly growing. Who cares if some people get huge amounts of pie, when everyone gets a decent and increasing share of it anyway? The problem is, we can't have much growth anymore. (Note that this only applies to the developed world!) Standards of living and technology are at a stage where there's little point for more improvement. Besides, there's a lot of reason to believe growth needs to be curtailed for ecological reasons anyway.
So the pie is going to stay at about the same size, maybe growing a little bit. At this stage of the economy, this means any large concentration of wealth is wealth that could be more usefully employed elsewhere.
b) the second problem is the disconnect between wealth, monetary valuation and the actual, real-world value of things. Microsoft makes okay software these days, but it's strange to think their contribution is valuated at more than 2 trillion. More generally, the weight of the entire tech sector is huge, incredibly so considering most of what we'd expect from tech was already in place in 2007. (And honestly, we'd probably be just as happy and productive with 2000 technology)


Not that I'm even really advocating socialism. Nor am I against it. I'm just more interested in specific measures than broad ideology.

I concur with you very much. These issues need to be addressed in a constructive, pragmatic way. Ideologies do more harm than good here. The problem is not one of free enterprise but one of rising inequality in a near-zero-growth economy.

[Ares Land]

I mostly agree with those points, but, with human psychology being what it is, I wonder if thinking a lot about systemic matters can ever motivate most people to take some kind of political action as well as resentment of billionaires can.

I'm not as pessimistic as you are. In many European countries we used to have a lot of communists; granted the communist vote was somewhat grounded in resentment but on the whole being a serious communist is a pretty demanding intellectual pursuit.

EDIT: to clarify, I mean communists in Western countries (France and Italy, notably). Regardless of their politics (which could be unsavory) there were unusually competent people.

I kind of wonder how much inflation there would be if the people who own those $2 trillion Microsoft share would try to spend all that money on actual physical objects (no matter what kinds of actual physical objects).

Probably a lot but the effects would be completely unpredictable as selling these shares would make the value of Microsoft stock tank... People in more right-wing circles like to point out that the billionaire's fortune is pretty abstract, which is partly true (and partly wrong, because their wealth can back things that do take place in the real point as some point. Also wrong because frankly 'who cares? the stock market is just monopoly money' isn't the great rejoinder they think it is.)

Hm. Now you got me thinking. I really like having basic multimedia functionality on my computer. I didn't have that in 2000. Then again, people with more money than me probably did. On the other hand, I don't think I'd want to go back to the internet speeds that even rich people got for the "last mile" back in 2000.

Granted, I'd be sorry to live without certain advances. (TBH I could live without spotify but what I really like is handling taxes and all paperwork online.)

Would temporarily nationalising everything count as a "specific measure" or as a "broad ideology" to you?

That's probably not detailed enough. There's a lot of details I'd like to know here... how about small businesses? freelancers? do the owners get compensated and if so how? There are going to be constitutional and legal obstacles, how do you handle these? How about foreign companies? Multinationals? Who runs the businesses while they're nationalized? What happens to them afterwards? How long is 'temporary'?
What are the goals you expect to achieve and in what timeframe? What happens if it doesn't work?

As the basis for a friendly discussion on an internet forum, of course, it's detailed enough

[masako]

Disdain and resentment of the billionaires should not be encouraged.

Strong disagree.

It moves things from the systemic to the personal, and it's not a personal issue.

What species of primate do you think we're talking about here? People take things personally...thinking "systemically" is not something most folks do on a regular basis, most especially when it comes to existing in, and passively supporting, a "system" that ignores them based on their wealth.

The trouble is, you could get rid of Elon Musk entirely and absolutely nothing would change.

I would prefer to test this theory and wait for actual results than make assumptions about the outcome.

the pie is going to stay at about the same size, maybe growing a little bit.

Jeezus, I hate this analogy...there ain't no pie. The amount of waste by the wealthy is already more than enough to care for everyone else. As an example, every unhoused person in NYC could have had a warm dry place to sleep for the entirety of March 2020 to April of 2021 due to office workers being sent home, but, nope, that was an already claimed "piece of pie", I guess.

I kind of wonder how much inflation there would be if the people who own those $2 trillion Microsoft share would try to spend all that money on actual physical objects (no matter what kinds of actual physical objects).

Most of that isn't actually cash, so "spending" it isn't a thing.

[Raphael]

Also wrong because frankly 'who cares? the stock market is just monopoly money' isn't the great rejoinder they think it is.)

It's certainly not an argument in favour of right-wingers' preferred economic system.

[Raphael]

I kind of wonder how much inflation there would be if the people who own those $2 trillion Microsoft share would try to spend all that money on actual physical objects (no matter what kinds of actual physical objects).

Most of that isn't actually cash, so "spending" it isn't a thing.

In that case, neither is redistributing it. Or at least the people to whom it would be redistributed wouldn't be able to spend it.

[masako]

I kind of wonder how much inflation there would be if the people who own those $2 trillion Microsoft share would try to spend all that money on actual physical objects (no matter what kinds of actual physical objects).

Most of that isn't actually cash, so "spending" it isn't a thing.

In that case, neither is redistributing it. Or at least the people to whom it would be redistributed wouldn't be able to spend it.

I've not advocated for any sort of "redistribution". I don't view the "market assessed value" of a company to be worth anything. I do not see it as something that can be redistributed.

[zompist]

a) the increasing concentration of wealth. Such a situation can be tolerable when the economy is rapidly growing. Who cares if some people get huge amounts of pie, when everyone gets a decent and increasing share of it anyway? The problem is, we can't have much growth anymore. (Note that this only applies to the developed world!) Standards of living and technology are at a stage where there's little point for more improvement. Besides, there's a lot of reason to believe growth needs to be curtailed for ecological reasons anyway.
So the pie is going to stay at about the same size, maybe growing a little bit. At this stage of the economy, this means any large concentration of wealth is wealth that could be more usefully employed elsewhere.

I don't think this is the case. It's true that growth rates are smaller than in les Trentes glorieuses, but they're not zero. Tech companies are massive because computers have— after a slow start— revolutionized business. Your mobile phone does more than the creators of Star Trek were willing to put into sf set 200 years in the future. Renewable energy has been transformed into something that can actually compete with oil; and we need more innovation, not less, to address climate change. And as ever, there are probably scores of advances we don't think about much. mRNA vaccines, for instance: much easier and faster than traditional vaccines.

I'd also note Dizzy Dean's point that predictions are hard, especially about the future. At this point we all, I think, expect 2075 to suck. And maybe it will! But picture a European observer looking at the world of, say, 1848. He was surrounded by a frankly pretty miserable world, run by miserable people, and could readily predict that the Europe of 1900 would be acocalyptically bad. As it turned out he was wrong; it was better in almost every way, and it wasn't even because people or leaders had done particularly dramatic or smart things.

But I strongly agree that concentrations of wealth are extremely bad— more so when the plutocrats have decided to stop sharing productivity gains, which creates a powderkeg of fragility and resentment.

b) the second problem is the disconnect between wealth, monetary valuation and the actual, real-world value of things. Microsoft makes okay software these days, but it's strange to think their contribution is valuated at more than 2 trillion. More generally, the weight of the entire tech sector is huge, incredibly so considering most of what we'd expect from tech was already in place in 2007. (And honestly, we'd probably be just as happy and productive with 2000 technology)

Here I have to object that there is no such thing as "actual real-world value." I know what you mean, but it's the phlogiston or ether of economics. All there is, is what people will pay for a thing. If humans all die off, nothing will have value any more.

I think what you're getting at is real, though: investment capital has gotten completely wacky. Investors have too much money and too little smarts, so they keep seeking risky high-yield investments— i.e., they are addicted to financial bubbles, and increasingly they're about nothing, not even land. Crypto never made sense, neither did NFTs, and the various attempts at creating new tech platforms have been mostly ludicrous and destructive (Zuck's legless Meta, Neopets, AirBnB, whatever the hell Elmo Musk wants). Unfortunately the usual way to teach investors to be more prudent is a massive depression.

[Travis B.]

I don't think this is the case. It's true that growth rates are smaller than in les Trentes glorieuses, but they're not zero. Tech companies are massive because computers have— after a slow start— revolutionized business. Your mobile phone does more than the creators of Star Trek were willing to put into sf set 200 years in the future. Renewable energy has been transformed into something that can actually compete with oil; and we need more innovation, not less, to address climate change. And as ever, there are probably scores of advances we don't think about much. mRNA vaccines, for instance: much easier and faster than traditional vaccines.

As I have mentioned before, the future that was supposed to happen hasn't happened - and the future that was never predicted has. In many things in SF we're already supposed to be venturing out in space, yet we haven't been back to the moon in decades and are otherwise limited to a few tiny space stations. Yet computers and the Internet have far outstripped what anyone, save the cyberpunks (who expected us to be wiring computers into our brains), possibly imagined, and far sooner too. And everything else you said.

[Raphael]

b) the second problem is the disconnect between wealth, monetary valuation and the actual, real-world value of things. Microsoft makes okay software these days, but it's strange to think their contribution is valuated at more than 2 trillion. More generally, the weight of the entire tech sector is huge, incredibly so considering most of what we'd expect from tech was already in place in 2007. (And honestly, we'd probably be just as happy and productive with 2000 technology)

Here I have to object that there is no such thing as "actual real-world value." I know what you mean, but it's the phlogiston or ether of economics. All there is, is what people will pay for a thing. If humans all die off, nothing will have value any more.

I agree that "actual real-world value" doesn't really exist, but it would still be good to have some way of talking about the difference between theoretically owning money and actually being able to spend it.

Let's say that, tomorrow, I would visit my bank and withdraw a single €50-note from my bank account. Then, I would go to the nearest department store or supermarket or main-street-filled-with-shops, and buy myself a small collection of cheap consumer goods with a combined value of just a little bit less than €50. After that, I would take a photo of what I had just bought, and post it somewhere on the Internet.

Now suppose that somehow, that photo would end up on the screen of some billionaire who officially owns more than €50 billion. And finally, let's say that on some weird whim, that billionaire would send that photo to their underlings with the instruction, "For each object in this photo, I want you to buy one billion of it!"

Would that be possible? Or would it lead to serious supply chain problems?

[Raphael]

I don't think this is the case. It's true that growth rates are smaller than in les Trentes glorieuses, but they're not zero. Tech companies are massive because computers have— after a slow start— revolutionized business. Your mobile phone does more than the creators of Star Trek were willing to put into sf set 200 years in the future. Renewable energy has been transformed into something that can actually compete with oil; and we need more innovation, not less, to address climate change. And as ever, there are probably scores of advances we don't think about much. mRNA vaccines, for instance: much easier and faster than traditional vaccines.

As I have mentioned before, the future that was supposed to happen hasn't happened - and the future that was never predicted has.

Not necessarily true. I remember, a few years ago, I saw someone on social media post something like (quoting from memory): "Unless you're a member of one of the oldest generations alive today, you weren't promised flying cars. You were promised a cyberpunk dystopia. Here you are!"

[Travis B.]

I don't think this is the case. It's true that growth rates are smaller than in les Trentes glorieuses, but they're not zero. Tech companies are massive because computers have— after a slow start— revolutionized business. Your mobile phone does more than the creators of Star Trek were willing to put into sf set 200 years in the future. Renewable energy has been transformed into something that can actually compete with oil; and we need more innovation, not less, to address climate change. And as ever, there are probably scores of advances we don't think about much. mRNA vaccines, for instance: much easier and faster than traditional vaccines.

As I have mentioned before, the future that was supposed to happen hasn't happened - and the future that was never predicted has.

Not necessarily true. I remember, a few years ago, I saw someone on social media post something like (quoting from memory): "Unless you're one of the oldest generations alive today, you weren't promised flying cars. You were promised a cyberpunk dystopia. Here you are!"

The closest people to predicting the present were the cyberpunks - but they predicted we'd be wiring computers into our brains - and that is only being done on an extremely experimental level with severely disabled people.

[Raphael]

The closest people to predicting the present were the cyberpunks -

And Jamiroquai. The future we live in clearly does contain a lot of virtual insanity.

[Travis B.]

The closest people to predicting the present were the cyberpunks -

And Jamiroquai. The future we live in clearly does contain a lot of virtual insanity.

At the same time, they got some things wrong aside from the brain-wiring - like how Snow Crash predicted that the US would dissolve into a collage of corporate statelets, leaving a small US gov't demense, yet that hasn't happpened.

[zompist]

I agree that "actual real-world value" doesn't really exist, but it would still be good to have some way of talking about the difference between theoretically owning money and actually being able to spend it.

You may be referring to liquidity. Liquid assets can be immediately reshuffled or sold, illiquid assets have obstacles. E.g. if you buy a 10-year certificate of deposit, you (are supposed to) get a higher rate of interest but you can't withdraw your money till the term is up. Land is less liquid than cash. Physical capital (e.g. the machines in a factory) may or may not be liquid— they might be very hard to sell in any short period of time.

(In exceptional circumstances, cash becomes less liquid: you can't dump a huge store of it and get full price. We call that inflation.)

In older societies you also have the concept of inalienable possession— i.e. the type you can't give away. This was often tied to royalty and nobility. E.g. King Charles can't, to my knowledge, simply sell his kingship, or even mortgage it to get a big loan. (For that matter, some things are purposely removed from the market: you can't sell your children.)

Now suppose that somehow, that photo would end up on the screen of some billionaire who officially owns more than €50 billion. And finally, let's say that on some weird whim, that billionaire would send that photo to their underlings with the instruction, "For each object in this photo, I want you to buy one billion of it!" Would that be possible? Or would it lead to serious supply chain problems?

Obviously it would, though I'm not sure what that proves. That's a sudden increase in demand, and would probably exhaust merchandise in hand, and new supply takes time and money to ramp up. A real-world example is the sudden demand in 2020 for masks. Or Ukraine's sudden demand for ammunition, which is straining NATO's supply chain.

[zompist]

Microsoft makes okay software these days, but it's strange to think their contribution is valuated at more than 2 trillion.

Another thought on this: surely we can now look back and find similar examples in history? One that comes to mind, since I mentioned it the other day, is Sears. Sears was the top dog in retail for a century; but then they were kicked off the Dow Jones in 1999, and went bankrupt in 2018. Surely it was overvalued long before then? If you could go back in time, you could advise investors to dump Sears stock.

The question is when should you go? This gets very tricky. Suppose you pick January 2004. An investor sells all his Sears stock— then watches the stock price rise from $20 to $155 over the next three years, and he hops into a time machine to kill your grandfather.

[Travis B.]

The question is when should you go? This gets very tricky. Suppose you pick January 2004. An investor sells all his Sears stock— then watches the stock price rise from $20 to $155 over the next three years, and he hops into a time machine to kill your grandfather.

I wouldn't worry, considering a general lack of (to our knowledge) assassinations by people using time machines. After all, if they could, they would've killed Hitler.