State of the Union 2014

[Admiral Yi]

Maybe I'm misunderstanding the question.  Income inequality demonstrably exists in free market systems; and forgetting observed evidence, even the least sophisticated economic theory would predict it would too.

You seem to have suggested that since Throbby acknowledged the existence of income inequality, he does not "have faith" in free market economics.  This suggests there are people out there, with true faith, who believe laissez faire economics will produce income equality.

Is this accurate, and if so, who the fuck thinks like that?

[Ideologue]

There are probably a few out there.  But most of the "faithful" seem to buy into the notion that, while inequality exists, it is not an evil in itself, and in fact that in a less free market, while inequality may less pronounced, the absolute level of wealth held at every stratum of society will be significantly less.

They often point to the Soviet Union as empirical proof.  They tend to ignore First World counterexamples like Germany, Scandinavia, or even the UK or Canada.

[Admiral Yi]

And who would these faithful be?

[Ideologue]

I am certain that you have argued in the past that virtually all legislative efforts to reduce inequality would reduce aggregate wealth.  I am equally certain that Berkut, Tamas, Spice, dps, Beeb, and probably Valmy have also argued this at various points in our decade together.

[Razgovory]

Also I thought Ide had said problems with inequality not that people had claimed that capitalism didn't cause inequality.  There certainly are people who don't see a problem with inequality.

[Ed Anger]

I would use the poor to construct a monument to my glory, the Angerpolis. With three full levels of interactive orgy action.

[Admiral Yi]

I am certain that you have argued in the past that virtually all legislative efforts to reduce inequality would reduce aggregate wealth.  I am equally certain that Berkut, Tamas, Spice, dps, Beeb, and probably Valmy have also argued this at various points in our decade together.

I beg your pardon.  I misread your previous post and thought your examples were your argument.

That is in fact my position.  This is what you call "faith based reasoning?"

[Ideologue]

I believe there are elements of faith and wishful thinking to all ideological systems.  Principally I was angry at Berkut, like I said.

[Admiral Yi]

That's fairly tautological. And I object similarly to describing the claim that free markets produce higher aggregate income than command economies as an "ideology."

[Jacob]

That's fairly tautological. And I object similarly to describing the claim that free markets produce higher aggregate income than command economies as an "ideology."

Is your claim that along a spectrum with a completely free market on one end and purely command economy on the other, any step towards the free market end will always increase aggregate income?

And do you define any redistribution of wealth by means other than than trade to a command economy trait?

[Admiral Yi]

Is your claim that along a spectrum with a completely free market on one end and purely command economy on the other, any step towards the free market end will always increase aggregate income?

And do you define any redistribution of wealth by means other than than trade to a command economy trait?

Transfers are not a command economy trait.  They do not interfere with market derived prices and quantities, which is the heart of market economics.

I'm hesitant to go so far as to say every single relaxation of a command economy will generate increased income, though any examples of the contrary are not springing to mind.  Lenin's "New Economy" increased agricultural production, Raul Castro's modest reforms seem to be increasing GDP, China's example is obvious, etc.

Which is not to say that there are no market failures that can't and shouldn't be corrected by government action: collusion, asymetric information, etc.

[Ideologue]

Note that I did not say "aggregate income."  I said that there is a belief in the increase of absolute incomes at all strata of society.

I can accept the possibility that the purer the capitalism, all things being equal the higher the GDP.  Ethically, I reject that this is all, or even what principally, matters.  And I also believe there is an element of faith-based reasoning in the belief that increases in aggregate income means increased wealth for broad sectors of society, particularly since there is evidence that this is not the case as regulation, lower taxes, and reduced redistribution has coincided with stagnation and by some metrics reversal of the wealth in some sectors of American society.

(I also believe it's entirely possible that capitalism is not conducive to increased aggregate income, viz. socialism, in an increasingly unequal and automated economy, due to failure of aggregate demand.)

[Admiral Yi]

"There is a belief?"  That's a pretty clunky formulation bro. 

Excluding transfer recipients, do you think there is a stratum of society in any Warsaw Pact country or in China that is worse off in absolute terms than they were under a command economy?

[Jacob]

Excluding transfer recipients, do you think there is a stratum of society in any Warsaw Pact country or in China that is worse off in absolute terms than they were under a command economy?

Why are you excluding transfer recipients?

Anyhow, in China the uneducated rural poor are likely worse off after the free market reforms than they were before.

[Admiral Yi]

Why are you excluding transfer recipients?

Because it's exogenous.  It's a choice, not a result of an economic policy.

Anyhow, in China the uneducated rural poor are likely worse off after the free market reforms than they were before.

The uneducated rural poor are all making a billion times their former income slapping together iPhones.