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User Shaqbark had a great comment about the notion that the rich don't have enough money to put a dent in the financial problems:

Fire@will writes:

[The "rich" don't have enough money to make everyone else rish. Confiscate all the wealth of the wealthiest ten percent and I'll bet it would not pay our debts for a month. Then what?]

From http://en.wikipedia.org/wiki/Distribution_of_wealth:
The United States is one of the richest countries in the world, and in 2000, the mean wealth was $143,727 per person.[10] In the United States at the end of 2001, 10% of the population owned 71% of the wealth, and the top 1% controlled 38%. On the other hand, the bottom 40% owned less than 1% of the nation's wealth.

Hence, the rich actually DO have enough wealth to make EVERYONE in the US rich - if it were possible to redistribute this wealth without causing massive inflation, which it would not be.

One of the best-kept secrets of the rich is that being wealthy (not just having lots of zeros in your bank balance, but being able to have a life of leisure, space, and privacy) requires other people to be poor.

 
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0 Rank Up Rank Down
Sep 24, 2008
Well I stand corrected as well. It seems the 'rich' are a lot richer then I thought.

BTW, You're getting an awful lot of these strange libertarian people here as commenters, Scott.
 
 
+4 Rank Up Rank Down
Sep 24, 2008
Of course being rich is only relevant if other people are less wealthy- having lived in both Denmark (minimum wage of about 18$ an hour- variable with currency rate) and Dubai (no minmum wage but the worst paid go for about 10$ a day) with about the same income (for my family- me being a minor back then) it does make a huge difference- 90% of all luxuries are services- not goods. Services cost what someone gets paid.
In fact studies (can't remember them thought) that wealth only makes you happier if you are richer than the average for your age group.
However in a place with more median distributed incomes everyone can afford nice things- and no one can afford a maid.
As a society though having everyone with a reasonable level of wealth makes for more consumers- more sales- and hence a better economy.
I believe it was Henry Ford who said that his target was a situation where every one of his workers could afford one of his cars- generating wealth by giving wealth.
 
 
0 Rank Up Rank Down
Sep 24, 2008
That's a fair point. Capitalism can be seen as a zero sum game, like chess where one persons gain is anothers loss - up to a certain degree, because if I had all the money in the world, then I would be no richer than my neighbour.

Also. I predict that this blog will be entirely user generated within the next year, and Scott Adams will post by promoting his own comments from the comments of a post someone else wrote!

 
 
Sep 24, 2008
"One of the best-kept secrets of the rich is that being wealthy requires other people to be !$%*!$%*!$%*!$%*!$% Class warfare nonsense. One cannot become rich if there is noone to patronize your business. Wealth-building industry both creates employment, which lifts people out of poverty, and gives the people something to buy with their wages.

The system that requires people to be poor is Communism, where everyone suffers equally and only the government holds the wealth.

Scott, just when I'd started having some hope for you, you take garbage like this for 'comment promoted to post'.
 
 
Sep 24, 2008
This was a ridiculous comment, and even sillier as a post.

Even if you want to, you can't take every rich person's net worth (minus $143K), and turn it into money to redistribute. Who's going to buy the stuff they own? Who's going to buy the assets you liquidate? No one, because you are liquidating everything, and no one has any net worth left.

Also, the whole argument falls over on the basic premise that the rich make people poor. Maybe they make people feel poor, but the system that creates such wealth, also allows the poorest to live better lives than all but the very richest in the past, and most of us to live better.

Finally, the concept of "wealth" here is really about control of assets. but, control of assets is not useful in comparing the rich to the poor. Assets and income devoted to private enjoyment might be more interesting.

Please Scott, stop sounding like an idiot. Instead of surveying economists, pay one or maybe 3 (libertarian, conservative, liberal, in that order) to review your economic posts. Or better still, go back to being funny.
 
 
Sep 23, 2008
lsmsrbls, I so wish that were true. I was ambushed on these few last posts. Maybe there are less conservative posters at night, because they certainly aren't voting me up. That frustrates me most.

thtstudios, interesting post on wealth in popular culture. However, the best counterpart to this movie would be the movie <i>Gandhi (1982)</i>. Polar opposite to Gecko. That is really the ideal, isn't it? I would love to have that personal power that Gandhi or Martin Luther King, Jr. had. I think some people were born with this type of independence from material things. They don't really need wealth. The rest of us do, however, because we don't have that nature, and I don't think it can be taught, except at maybe a very young age. I am way past that age.
 
 
Sep 23, 2008
There is a reason why (in my opinion of course) the 1987 movie "Wall Street" is an awesome introduction to economics if you take the time to listen carefully. Take this gem from Michael Douglas playing Gordon Gekko:
"The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's !$%*!$%*! You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you."

The debate of what is true wealth always intrigues me. Leisure, space and privacy can mean different things to different people. A hermit living in a mountain cabin may have all that he needs and therefore be wealthy in his mind. But no one has to be poor for him to live a simple life. Does the problem then become greed?

Again from the movie: "Teldar Paper, Mr. Cromwell, Teldar Paper has 33 different vice presidents each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out. One thing I do know is that our paper company lost 110 million dollars last year, and I'll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents. The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated. In the last seven deals that I've been involved with, there were 2.5 million stockholders who have made a pretax profit of 12 billion dollars. Thank you. I am not a destroyer of companies. I am a liberator of them! The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA." (Gordon Gekko, Wall Street)

A had a rich friend that once told me, "Money does not make you happy, it just puts a nice deposit on it." Wealth in the literal sense is the abundance of valuable possessions or money, but it is truly measured by how good you feel and your scale of happiness. If we could focus on feeling good, giving to one another, caring for each other (as a unified humanity) perhaps there would be no need for people to be poor. The richest people in the world have always at the end of their lives have given back, because it is inherit within us to help one another that somehow that is the ultimate calling we somehow miss.

The media, government and survival of the fittest instincts makes us fearful and it is the fear that feeds the greed in this cycle of life. It helps to remember that fear is just Forgetting Everything is All Right.
 
 
Sep 23, 2008
What has happened to either the demographic or opinions of your readership? Am I not paying enough attention or did the economist poll bring in more conservative commenters and voters? It seems like previously the number of people voting and - on issues that could be considered partisan would even out, but in the last thread all the "poor people are lazy and don't be stupid and take money from the rich" comments were far outvoted compared to anything that could be construed as questioning those sort of statements. It's only a swing of 10 votes or so at the most, but it still seems stark. Even the quote you picked out above still has a negative rating, whereas fire@will's comment is positive and got "me too" type responses.
 
 
Sep 23, 2008
I was referring to my previous post, not the post below.
 
 
Sep 23, 2008
The obvious exception to this rule is those who have just recently moved up from a lower to a higher income bracket. They will certainly experience the "sticker shock" of having to pay higher taxes, and will not be emotionally prepared for it. In fact they will be morally outraged that their hard work will not pay off, and that someone else will be the recipient. Those who have been rich for a long time, like Donald Trump, may not like seeing their taxes go up, but they are used to it.

So one idea of adding chocolate coating to this bad idea is to give this category of taxpayer an exemption for two years, so they can experience the rewards of their hard work.
 
 
Sep 23, 2008
"Being wealthy... requires other people to be poor."
This is how many people see capitalism. It passes the gut test, and it certainly appears to be the case when you look at annual statistics. If it WAS true, I could understand the socialist doctrines and policies that certain politicians are advocating. Higher standards of living for everybody is what we're all working toward, right? If we can help the poor by only hurting the rich a bit, everybody wins, right?
Well, the problem with that is simply that that wealth doesn't necessitate poverty. There's been a lot of discussion about robots in the comments, allow me to get a bit more specific. Technology, in point of fact, is what allows us to have lives rich in wealth and leisure. The reason that America is, on average, so wealthy is the fact that for years we've had access to a higher level of technology than much of the world. This begs the question, "Why are we such a technological society?" The answer to this, quite simply, is our economy. Capitalism in general, and America in particular, is uniquely situated to promote advances in technology. For decades this trend has been evident- the free market fosters technological innovation at a faster rate than socialism or any other form of a command economy. As anyone whose taken a course in economics can tell you, technology causes economic growth, usually faster than any other factor. With technology, or robots, as some mentioned, doing the jobs we find undesirable, and allowing higher levels of production for the jobs we do find desirable, the economy grows. And when the economy prospers, so do we all.
Capitalism does allow for inequalities. Some people do suffer from poverty, and there are problems with the system. But capitalism takes the long view, it plays for the end game. And over time, the free market will always beat government intervention. The question is simply whether we have the patience to let the free market make us all rich.
 
 
Sep 23, 2008
@ minorthoughts
All the items you mentioned require poor people(or at least poorer people) for manufacturing, delivery, retail, et cetera. These positions aren't always for the extremely poor, however, chefs, drivers, and personal trainers aren't either.
 
 
Sep 23, 2008
The wealthy do have enough to keep the middle class and the poor contented in remaining in that low-income bracket. This is why it is my sincere belief that the welfare state is just as useful to the wealthy as it is to the poor, if not more so. If I had a job that provides a low income, the safety net will give me enough security to fullfill the need to seek a higher, or additional income. For example, the family who receives Medicaid, yet the only the father works and the mother chooses to be a homemaker, and has multiple children, fits into this category. There are many questions that arise out of this arrangement of whether it is morally right for government to be involved in this decision, or if there is some long-term economic, ecological or social consequence, but the wealthy are not necessarily harmed by it.

This election will neither help them nor hurt them personally.




 
 
-1 Rank Up Rank Down
Sep 23, 2008
minorthoughts: Well, that depends if you measure poorness in a relative or absolute way. For example, 40% of the poorest people in EEUU may not have a lot of money. But they sure have better life standards than other poorer countries. That's the point of free market - you let smart people be rich, and you sure have poor people, but that people is richer than they'd be if EEUU was a communist country.

Of course, those poor people aren't happy with their "absolute richness", because they perceive a relative poorness compared with the richest people in their own country. That's why some people finds hard to belive arguments like "if we were communists it'd be worse". They just feel poor compared to the richest people, no matter how well are they living. Maybe that's also why people who lives in communist countries usually feels "happy": everyone is just as poor as you, so that's OK.
 
 
+1 Rank Up Rank Down
Sep 23, 2008
Those data are know, in fact, if I remember correctly, in EEUU 5% of the richest people pays 40% of all the taxes.

If rich people would share their money, prices would go up, BTW.
 
 
Sep 23, 2008
"If someone is rich, why would they be your personal chef, or driver, or trainer?"

They might enjoy the work.

But, again, I don't necessarily need a human to act as my personal chef, driver, or trainer. I believe robot cars and chefs are on the horizon. Why not trainers too? (Wii Fit isn't a bad start, for example.) If robots can do all of the "personal services" that I want, I don't need poor people. Every one can be "rich" by that standard.

I realize that all of this technology isn't presently available. But a lot of it is. And it does prove that poor people aren't a necessary pre-requisite for wealth.
 
 
Sep 23, 2008
Being rich (lavish lifestyle) does require others to be poor (not so lavish). If someone is rich, why would they be your personal chef, or driver, or trainer? The richer the employee is to begin with, the more you need to pay them to convince them to continue working. If everyone's wealth was equal, no one would have assistants or staff.

Using the numbers in the post, $143,727 per person would not make everyone rich. Over a 70-year lifespan, that's an average annual payment of $2053.24. Does someone making $36,000 become rich when they make $38,053.24 a year? The rich are rich because they have positive money habits. They create new wealth using existing wealth. Someone who is poor generally has negative money habits, or a life event which makes them temporarily poor.
 
 
Sep 23, 2008
How does my life of "leisure, space, and privacy" require other people to be poor? I don't get it. I agree that space -- right now -- is a limited resource. The more of it that I have, the less there is to go around. (At least until we colonize space or the oceans.)

But why does my leisure and my privacy require poor people? Most of my leisure is enabled by robots: RSS feeds deliver updated news and blogs, dishwashers clean my dishes, automatic washers and dryers clean my clothes, iTunes keeps my iPod updated, etc. If I wanted, I could buy a robot to vacuum my floors and another robot to mow my lawn.

I don't understand how poor people are a requirement for any of that to happen.
 
 
-2 Rank Up Rank Down
Sep 23, 2008
Isn't "rich" a relative matter? If the rich makes everyone else rich, then no one is really rich. Are we revisiting communism?
 
 
Sep 23, 2008
Oooo, nasty comment:

"One of the best-kept secrets of the rich is that being wealthy (not just having lots of zeros in your bank balance, but being able to have a life of leisure, space, and privacy) requires other people to be poor. "

Scott - do you believe this? Then, I guess a lot of rich folks are moving to places where everyone else is poor - like Zaire or something, right?
 
 
 
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