Economic wealth distribution

[Saigio]

I got talking with a friend over the past weekend, and we got onto the topic of wealth distribution. What I learned interested me, so I did some reasearch.

Here are some statistics.

In 2001
10% of Americans controll 71% of the wealth.
The top 1% controll 38% of the wealth.(not part of the 71%)
Source: http://en.wikipedia.org/wiki/Wealth_distribution

That leaves 1% of the pie for the other 89% of America.
Some quick math concludes that 33,000 people in America controll 99% of the wealth.
The other two hundred and sixty seven thousand Americans are left the table scraps.

Welcome America, the land of opprotunity. (restrictions may apply)

[Leopardpm]

Saigio,
You are having math problems:
first off, add your 71% and 38% and what do you get? 109%!!!!!!!

Second, you are lying when you say that the wealth owned by the top 1% (38% of the wealth) is NOT part of the 71% wealth from the previous stat - it IS part of it.

Third, you say that 33,000 people control 99% of the wealth, leaving 267,000 to control 1% = for a grand total of 300,000 people living in these United States - again, your math fails you, my city is 10 times as large as this amount!

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Now, despite your math impairment, I understand what you are trying oh-so-very hard to imply, with the same erroneous foundation as all socialist and communists: that there should be some sort of equality in wealth owned. This is false. It is not possible, and is immoral. Let me start with an example:
2 people, isolated from each other and alone in a forest. They build shelters. One builds a much better shelter (due to his knowledge, capabilities, intelligence, etc). At the end of the day, there is a large 'wealth gap' between the two - is there something wrong going on? No, there is nothing wrong. But you would point to them and cry, "Look! Something is wrong with the system, wealth is not distributed evenly!"... and then, even worse, you would advocate some sort of 'redistribution' plan backed up with the force of government... like taking wealth from the productive person and giving it to the less productive (after skimming a few percentage points for government expenses, mind you). You make the assumption that the wealth earned by those few folks 'at the top' is somehow earned 'unjustly'. If it is unjust, like they stole it, then that is a problem that needs rectified... by if they came by their wealth through just and moral means, then, whatever amount of wealth they have is also moral and just - no matter who else you compare it to.

Yes, America IS a land of opportunity. And it is also a fact that everyone has varying degrees of productive capacity due to a variety of factors. So, in this 'land of opportunity' some folks will be wildly wealthy, some folks will be moderately wealthy, and others will be awfully poor. But the poor are not 'poor' because the rich stole from them, they are poor due to the nature of their abilities, their environment, their choices.

[Saigio]

I apologize for my math error.
Now, since you were so kind as to point that out in such a polite manner, I will ask that Labrocca allow me to rectify my errors in typing and math, if he would be so kind as to allow that, by either allowing me to re-post, or allowing me to change.

[Leopardpm]

Just go ahead and restate your post here, no need for another thread - I am sure that anyone reading will understand what you were trying to point out.

[Saigio]

I made an error or two in my original post. I was in a rush because I had to finish this as my study hall ended. This is the proper post.

I got talking with a friend over the past weekend, and we got onto the topic of wealth distribution. What I learned interested me, so I did some reasearch.

Here are some statistics.

In 2001
10% of Americans controll 71% of the wealth.
The top 1% controll 38% of the wealth.(part of the 71%)
Source: http://en.wikipedia.org/wiki/Wealth_distribution

That leaves 29% of the pie for the other 89% of America.
Some quick math concludes that 33,000,000 people in America controll 71% of the wealth while the other two hundred and sixty seven million Americans are left the table scraps.

Welcome America, the land of opprotunity. (restrictions may apply)

[Leopardpm]

ok, now, so why does this matter to you? Why should wealth be evenly distributed? Is not wealth a product of a persons labor in some manner, so if people labor differently then wealth will accumulate differently, right?

For instance, lets say you and I desire to earn some wealth. You decide that opening up a lemonade stand on a sunny day sounds like the right thing to do. I, on the other hand, decide that mud-pies are what people want and proceed to open up a mud-pie stand. After spending all day making very pretty mud-pies, but not selling one of them, I am frazzled. Looking over to you and your lemonade stand which has been doing brisk business throughout the day, I notice that your cash register is nearly brimming over with funds. This is an obvious case of unequal wealth distribution, right? Sure, but what of it? All it means is that people valued your services more than they did my own. The 'wealth gap' does not point to some problem in the distribution of wealth.

Any distribution of wealth distribution which comes about from legal and moral methods of trade and exchange (no stealing or coercing) is the 'correct' distribution of wealth.

[Saigio]

Legal, yes. Moral, hardly.
When so few controll so much, it can only lead to conflict. Most people do not earn a living wage and cannot feed their familes, while the nations wealthy eat in opulance, and do nothing to earn their wealth.

Your example is a poor one for your needs. You spent no time trying to sell your product. You only produced, wheras I went out and sold. But it is still a good example of the uneven distribution. One person works very hard, and gets nothing, while another sits in comfort and makes loads of cash.

[Mayberry]

and do nothing to earn their wealth.
Not so. I happen to know a self made millionaire. He found a niche market and filled it. He worked very hard and barely scraped by the first few years. But now he is doing quite well and reaping the rewards of his hard work. Sure, there are some spoiled brat trust fund babies out there, and "old money", but tell me, If you made millions, wouldn't you leave at least some of it to your heirs? Most people do not earn a living wage and cannot feed their familes, Really? Sure are a lot of shiny new cars running around, and new houses going up. I dare say "most" people are doing ok. The average American salary is somewhere around $35,000 a year. So if the upper crust is small in number, it would suggest there is a large number of people who earn at least the national average. One can live quite comfortably, albiet modestly, on $35,000. My wife and I together make around $40,000, and we own a modest 1,600 square foot home, a 2001 Chevy Tahoe, a nice 1982 Jeep CJ7, 2 boats (oldies but goodies), and the usual electronic goodies. I have broadband internet, cable TV, etc... I'm not "rich" by any means, but I'm living quite well. I'm surrounded by hundreds of thousands doing at least as well. Some do better, some not so good. But to say that most people don't earn a living wage is patently untrue. If it were, I'd probably be in poverty, and surrounded by it. One person works very hard, and gets nothing, while another sits in comfort and makes loads of cash. I find the opposite is true. Hard work is usually rewarded. Maybe not right away, but eventually it will pay off. For instance, I work 40 hours a week at my "real job", and maybe another 10 to 20 a week at times doing boat repair on the side. I am also studying marine design and architecture on my own. I have designed several boats that I want to produce some day. I invest the money I make doing boat repair into the tools, material, and equipment I need to produce those boats. And when I build them, if it is something the consumer wants, they will buy them (and they will!), I'll make a profit, and my hard work will pay off. And who knows, maybe my company will expand and become worth millions, and I'll be one of those people "sitting in comfort and making loads of cash".

[Leopardpm]

Legal, yes. Moral, hardly.
When so few controll so much, it can only lead to conflict. Most people do not earn a living wage and cannot feed their familes, while the nations wealthy eat in opulance, and do nothing to earn their wealth.
wages are not tied to 'needs' (ie: living wage) - they represent the value of the labor in the market. If a person makes mud-pies and tries to sell them, he will quickly find that the value of his labor (mudpie making) was next to nothing. But, if he spent the same amount of effort making Cherry Pies, he would find a much higher 'wage' earned. Note: In both cases, mud-pie making and Cherry Pie making, the wage earned has nothing to do with the laborer's 'needs', and everything to do with how much everyone else 'needs' that particular type of labor.

Your example is a poor one for your needs. You spent no time trying to sell your product. You only produced, wheras I went out and sold. But it is still a good example of the uneven distribution. One person works very hard, and gets nothing, while another sits in comfort and makes loads of cash.I think you got a bit side-tracked in reading my example - yes, I did say 'making mud pies' but I was implying that both you and I were expending the same amount of effort, it just happened that my effort in mud pie making/selling paid off much less than yours in lemonade making/selling.

Please think about this: if you were to hire a person to clean your house, and they spent the time doing something else entirely (like playing with your dog), you wouldn't pay them, right? It is the type of labor which you desire, NOT amount of labor put into anything willy-nilly. Does this maid deserve a 'living wage' according to you? Of course not! And the same reason why not goes for ALL labors which are not worth the wage amount which is determined to be 'living wage'.

So, let's say that a 'living wage' is determined to be $10 per hour. Now, if a particular labor is not valued by most folks in the market to be worth $10 per hour (like making mud pies, or perhaps making burgers, or sweeping sidewalks, etc) then those labors will not be paid a 'living wage'. What to do about this supposedly awful situation? Well, lets pass a law which says $10 per hour is the least amount you can pay someone for ANY labor... what do you think will happen? Make it personal: you would be willing to pay someone $5/hour to walk your dog for you, but the law says you must pay $10 per hour, what do you do? You obviously won't hire someone, instead, you will do it yourself (or get a young family member to do it for free!). This is what happens when a minimum wage is in effect: all labors valued less than the minimum wage disappear. If a person has no special skills and only has the ability to perform $5 per hour labor, then these poor folks are out of luck and will be unemployed. Another way to define 'minimum wage' is: An amount which below that amount, no person is allowed to sell their labor. It is an anti-labor law, not some sort of anti-employer law.

But, back to wealth distribution. Two scenarios:
#1 - two people, one is a doctor, one is a bread maker. They get paid different wages, right? There is nothing wrong with this, right? So wealth will get distributed unequally, right?

#2 - two people, both are bread makers earning the exact same amount. One happens to be a 'saver' and the other is a 'spender'. Over time, the 'saver' will accumulate wealth and there will be a wealth gap between these two folks. Is this wrong?

Now, another way that a wealth gap can come about:
#3 - two people, one is a bread maker, the other is a thief. The bread maker earns his money, but the thief takes it away from him. Still a difference in wealth after the day is done. Is this wrong? Of course! And we both agree that the wealth gap in this scenario represents an immoral situation. But, notice that the immorality comes from the immoral action of thievery, NOT the very moral and natural discrepency of differences in labors or actions as in #1 and #2 above, right?

[Saigio]

I think the problem I have is that there are so few controlling so much, while everyone else is left to fight for the left-overs. Most of those that have large sums of money did nothing on their own to earn it while there are those that work everyday of the week, for eight hours a day, and barely make enough to feed their family. Many can't even manage that. I have a problem with that. I have a problem that the rich can do nothing and make more and more.

[piratemonkey]

#1 - two people, one is a doctor, one is a bread maker.Â*Â*They get paid different wages, right?Â*Â*There is nothing wrong with this, right?Â*Â*So wealth will get distributed unequally, right?

#2 - two people, both are bread makers earning the exact same amount.Â*Â*One happens to be a 'saver' and the other is a 'spender'.Â*Â*Over time, the 'saver' will accumulate wealth and there will be a wealth gap between these two folks.Â*Â*Is this wrong?


Your scenarios are good ones, but incomplete in describing the current situation.

Problem #1:
If one person is twice as productive as another, he should make 2X as much money right?

In 2005, in the US, CEO's make 411X what the average worker makes.Â*Â*Are CEO's 441X more educated, productive or able than the average worker?

Few would argue that they are.


Problem #2:
There is a growing class of people in the US that have done nothing to earn the wealth that they have.Â*Â*It's called inheritance and it's estabishing a permanent aristocracy in the US... and utterly Un-American concept.

[Leopardpm]

Problem #1:
If one person is twice as productive as another, he should make 2X as much money right?

In 2005, in the US, CEO's make 411X what the average worker makes. Are CEO's 441X more educated, productive or able than the average worker?

Few would argue that they are.
It's all relative - the point is, SOMEONE believes that a particular CEO is worth a certain amount and expects the CEO's performance/productivity to be more than his pay. Again, why does it matter to you what I choose to pay my lawn mower boy as long as he and I have come to a voluntary agreement on his compensation for his labor?

Remember, the money used to pay the CEO is not coming from you, or me, or other 'public coffers' like taxes - someone is using THEIR money to purchase his services... don't you think they would want the best deal for their money, just as you and I would?

Problem #2:
There is a growing class of people in the US that have done nothing to earn the wealth that they have. It's called inheritance and it's estabishing a permanent aristocracy in the US... and utterly Un-American concept.
Hogwash - this is propaganda... there is NOT a 'growing' class of inheritors - just as many 'inheritance's are wasted away in one generation as there are new inheritances created. This is just pandering to jealousy.

What is AMERICAN is property rights - if I 'earn' a dollar and I own it, then I am sure as heck free to give it to whomever I desire for whatever reason - THAT is what inheritance is, a gift of justly owned property.

There is a growing class of people in the US that have done nothing to earn the wealth that they have.yes they have, unless they stole it. If I give my money to a bum on the street because he was nice to me one day, did he 'earn' it? yup, in my mind, and THAT is all that matters in regards to my money. Whether or not other folks agree is ridiculous and none of their business - it is MY property to dispense with as I see fit. So, if I choose to give all my accumulated wealth to my lazy, selfish son, just because he happens to have my DNA running through his veins, THAT is a valid and moral transfer of property - my property. If I choose to pile up all my wealth into a big heap and set it on fire, is that a problem to you? Same thing, except you are jealous of the lazy son.

[Leopardpm]

I think the problem I have is that there are so few controlling so much, while everyone else is left to fight for the left-overs. Most of those that have large sums of money did nothing on their own to earn it while there are those that work everyday of the week, for eight hours a day, and barely make enough to feed their family. Many can't even manage that. I have a problem with that. I have a problem that the rich can do nothing and make more and more.


perhaps the problem you have is that you seem to think that 'wealth' is a static thing - it is not. Wealth is created, every second. And each and every person on the planet has the ability to create it. We are not fighting over some finite pool of wealth, we are competing against each other to provide the most valuable services to each other. Wealth and value are also creations and ideas which reside in the mind: if you tie two sticks together with a string, I might happen to value that finished object enough to trade you something for it - you just created wealth. Even if you didn't happen to value the stick/string thing yourself.

Also, no matter how much wealth your neighbor might have, the fact that he has wealth (or much more wealth than you) does not limit nor hinder your ability to generate/create wealth for yourself. So what if Joe has $1 million - how does this affect you besides raising perhaps some jealousy?

There is one caveat though - there is a way that wealth held by others CAN affect you, deeply, personally. Normally, humans understand that it is wrong to steal or otherwise appropriate property from rightful owners. It is wrong for wealthy (or poor) neighbor Joe to evict you from your property and claim it for his own. BUT, through government, the wealthy ARE able to do this very thing. It is not the fault of the wealthy, or the system of wealth creation (capitalism), this absurd violation of rights is directly tied to the institution of government.

[piratemonkey]

Â*Â*Again, why does it matter to you what I choose to pay my lawn mower boy as long as he and I

It matters a lot.

What you pay your lawnmower boy effects:
What I have to pay my lawnmower boy.
What lawnmower parts suppliers can charge when I buy parts.
How much public money it costs to supply him healthcare.
Incarceration costs, if you are paying so poorly he chooses crime as an alternative. ;)


Remember, the money used to pay the CEO is not coming from you, or me, or other 'public coffers' like taxes - someone is using THEIR money to purchase his services... don't you think they would want the best deal for their money, just as you and I would?

Again, that's a simplistic way of looking at it... see above.

When a group of millionares sit in a board room together, give each other unbelievable salaries and laugh all the way to the bank while their company goes south... that matters to all of us.

How many CEO's have you seen get 10's of millions of dollars in a bonus or golden parachute while their company is doing mediocre or worse?


Hogwash - this is propaganda... there is NOT a 'growing' class of inheritors - just as many 'inheritance's are wasted away in one generation as there are new inheritances created.Â*Â*This is just pandering to jealousy.

Since neither of us have statistics on this, I may be right or wrong.

But tell me this:Â*Â*Why should anyone get money for the random grace of being born in the right family?Â*Â*Ever?


THAT is what inheritance is, a gift of justly owned property.

To someone who hasn't earned it and doesn't deserve it through any action but random chance.

, THAT is a valid and moral transfer of property - my property.Â*Â*If I choose to pile up all my wealth into a big heap and set it on fire, is that a problem to you?Â*Â*Same thing, except you are jealous of the lazy son.


Moral?

Just because you can do something makes it moral?!?!

Wow.Â*Â*That's the shadiest logic I've heard in a while.

[Saigio]

The amount of wealth is finite. The government can't just start printing double what it normally doe's. That would kill the economy.
The fact that such a small amount of people are controlling such a vast amount of wealth doesn't disturb you?

[Mayberry]

Why should anyone get money for the random grace of being born in the right family? Ever?
Where should it go then? Are you saying that when I die, my money will be taken from my family by the government and redistributed to more "worthy" people?

[Leopardpm]

The amount of wealth is finite. The government can't just start printing double what it normally doe's. That would kill the economy.
The fact that such a small amount of people are controlling such a vast amount of wealth doesn't disturb you?


money is NOT wealth

[Leopardpm]

Again, why does it matter to you what I choose to pay my lawn mower boy as long as he and I

It matters a lot.

What you pay your lawnmower boy effects:
What I have to pay my lawnmower boy. No, you can offer whatever you want, he can accept anything he wants - if you two want to use my trade as a starting point, that is your choice.

What lawnmower parts suppliers can charge when I buy parts. what?

How much public money it costs to supply him healthcare. Public money should not be providing him healthcare.

Incarceration costs, if you are paying so poorly he chooses crime as an alternative. ;) Poverty does not cause crime.


Remember, the money used to pay the CEO is not coming from you, or me, or other 'public coffers' like taxes - someone is using THEIR money to purchase his services... don't you think they would want the best deal for their money, just as you and I would?
When a group of millionares sit in a board room together, give each other unbelievable salaries and laugh all the way to the bank while their company goes south... that matters to all of us.

How many CEO's have you seen get 10's of millions of dollars in a bonus or golden parachute while their company is doing mediocre or worse?
if you really think this is the way things work at those levels, then I suppose there is no trying to convince you that magic doesn't exist either...

But tell me this: Why should anyone get money for the random grace of being born in the right family? Ever?
because someone else wanted to give it to them - are you suggesting that I cannot give to a charity, or destroy my wealth, or give the random bum on the street a dollar?


THAT is what inheritance is, a gift of justly owned property.

To someone who hasn't earned it and doesn't deserve it through any action but random chance.so it IS jealousy that drives you? Who do you think you are to judge whether or not another person is 'deserving'? If you think someone is undeserving, then don't give them anything - but if I do feel they are deserving, please do not suppose to know better than I in regards to my own affairs.

, THAT is a valid and moral transfer of property - my property. If I choose to pile up all my wealth into a big heap and set it on fire, is that a problem to you? Same thing, except you are jealous of the lazy son.


Moral?

Just because you can do something makes it moral?!?!

Wow. That's the shadiest logic I've heard in a while.
it is 'moral' because it does not infringe on anyones rights, it is not 'immoral', and ownership of property is moral.

You still didn't answer my question: "If I choose to pile up all my wealth into a big heap and set it on fire, is that a problem to you?"