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Suppose you could snap your fingers and instantly reduce the huge disparity in income distribution across the globe. Would you do it?

Many of you will probably say yes. You'd take some of the "extra" money from the rich and use it to help the needy. But suppose I put one condition on this magic power of yours. Suppose the only thing you can do by magic is reduce by half the wealth of the top 1% while knowing the money would be transferred to no one. The money would simply cease to exist. The rich would have half as much, while everyone else remained the same. Would you use your powers then?

I keep reading opinions that the gigantic gaps we see in income distributions are corrosive to a healthy society. If that's the case, using your magic to screw the rich should be a good thing for the world - including the rich themselves - even if the poor are not directly helped at the same time.

So how about it - Would you use your magic to screw the rich, thus reducing the gap in income distribution?

 
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-1 Rank Up Rank Down
Jun 2, 2012
I certainly wouldn't. The problem isn't the gap itself, that's just a side effect. The real problem is that resources (water, food, services) are limited, and they cost money. And money itself is limited. Believe or not, the world has a limit on how much it can produce.

So if you have people hoarding money on one side, on the other end you're reducing the available amount for the rest of people. It's like pulling a rope. You get more on one side, but you're reducing it on the other.

If you're not really helping anyone by reducing the wealth of the top 1% by half, you're not doing anything really. Anyway they're so rich that you wouln't even screw them.

What could make a difference is to let that top 1% live like really poor people for about a week. But don't take their money away. I bet at least a few would give half their wealth to poor people.
 
 
May 16, 2012
The rich getting richer is not corrosive to society. It's that the poor are getting poorer. The rich are making their money on the backs the poor. Is the contribution of the rich corporate exec truly worth 500 times more than the contribution of the ditch digger. Is the exec getting 500 times more work done, is he 500 times smarter, did he work 500 times harder? I think not. The real issue is that IF you can get a job you may still not be able to even afford a crappy little apartment and decent food. THAT is what is corrosive to society.

(besides, that thought experiment is impossible because you can't take money away from the rich and not have it create havoc in the entire economy)

Of course, humans being humans, they do need incentive to work hard and so I would not want to see that carrot taken away. There should be a reward for those who seek to improve and take chances. However, if the gap between incomes becomes too large, and the end result is a large poor class that can't make ends meet, and a very small upper class living mostly at the expensive of the hard labor of the rest, and very little middle class, then what you have is an unstable country full of malcontents.
 
 
May 14, 2012
It's not about wealth, but rather quality of life and prosperity. Simply redistributing cash will not fix anything. The polarization of wealth is the end result of strict capitalism (and for the record, the polar opposite system is no better). Sustainabilty and equity come from balance...and this has been ignored.
 
 
-7 Rank Up Rank Down
May 13, 2012
It’s nice to take a vacation once in a while because this gives you physical and mental refreshment. I can still remember my unforgettable experience when I was in <a href="http://www.bantayan-island.net/">Bantayan Island</a>. The place was indescribable. The surroundings were rare, pleasant to your soul.
 
 
May 12, 2012
Yes I would. But only because I am curious. I would like to see what happens next. :)
 
 
May 11, 2012
In theory we all agree that what matter is increasing the well being of the poorest: if they have a modicum of dignity and opportunity in their lives, who care how much richer the 1% is?

Yet inequality matters. As mentioned below people in countries with low Gini coefficients are reportedly happier. Our wealth is only relative to that of those around us.
After all, money is just numbers. In absolute term, my salary seems large compared to that of my parents 10 years ago. Yet in relative terms, with everyone's income increasing, I am as well off as they were, and as more or less anyone I know.

So, I don't know: part of the wealth of the richest 1% translates into more jobs and oportunity for all, but some of it is just paper wealth, an artificial added value which just inflates prices for all of us...
 
 
May 10, 2012
If you could increase the wealth of the bottom 99% and not the wealth of the top 1% would you do it? You can, just print the money and hand it out. The top 1% would complain that this would cause inflation which would eat up the money that was handed out, so the bottom 99% would not be hurt but the top 1% would be by the inflation.

But turn it around and eliminate 50% of the wealth of the top 1% and people have the idea that it would have no effect. The elimination of that wealth would cause deflation. The prices for the bottom 99% would decrease and they would benefit.

You can do it either way. Want to bet in both cases the rich complain that it would only hurt them and help no one?
 
 
-2 Rank Up Rank Down
May 10, 2012
Probably not, because it would mean chaos and unemployment through the roof for a time. But realize how bigoted your question sounds. A similar question would be: Would you wave a magic wand to destroy the wealth of Colonel Gadaffi, or Hitler's Nazi Party, or the Ancien Régime in pre-revolution France?
 
 
-8 Rank Up Rank Down
May 10, 2012
But then again, who cares about facts, right? If you don't like the facts, you just vote them down and there you go.
 
 
-9 Rank Up Rank Down
May 9, 2012
Yes I would. If you had explained the term "corrosive to society" a little more detailed, then more people would agree. It means amongst other things that population health gets worse, death rate increases, crime rises, the general trust amongst the people decreases. This has been shown in research in rich and poor countries around the world:

http://en.wikipedia.org/wiki/Income_gap#Effects_of_inequality
http://www.sciencedaily.com/releases/2007/10/071023095119.htm

With the term "s c r e w i n g the rich" you're trying to push us in one direction. However, The rich wil still be rich after the necessary s c r e w i n g.
 
 
May 9, 2012
I should like to see money used mainly for the purposes of raising the ability to generate wealth. I would see good universal education as a way to achieve this - is that what they call raising all boats? Excessive military spending achieves the opposite - keeping wealth concentrated.

Also, (for instance) currently the situation appears to be that if you are young and want to make a few bucks you can go into finance, making your gravy from futures and leveraging on other people's production. Whilst I accept derivatives are essential tools for some !$%*!$%*!$%*! there is something clearly out of balance right now. It would be nice to make a good path for bright young thins to be able to achieve in fields that actually create wealth.
 
 
May 9, 2012
Nope. I would not.
I don't think that incomee inequality is the issue.
I think most of the grief comes from the feeling of the 1% getting rich at the expense of the lower 99%.
Most people don't get upset about artists getting rich doing their craft. People love them.
Same applies for guys like Warren Buffet, Steve Jobs, Bill Gates, etc.. They got rich through hard work, and luck as you mentioned.
The grudge comes when your average CEO or iBanker cheats, lies and screws over it's employees or customers, so that they can get ahead.
To me that's the problem. It's not about the money. It's about respect and how you got there.


 
 
May 9, 2012
@kriggs

How is the guy at the bottom any better off when you screw the rich guy? Life isn't fair. What's next? All the attractive people have to be disfigured? All the healthy people have to be sickened? I don't float too far above the bottom in the big scheme of things, but !$%*!$%* someone else for no reason doesn't help me or anyone under me. All it does is releive some guilt from people who don't believe in manifest destiny.

By the way, a thief always thinks he deserves the loot more than the victim.
 
 
-9 Rank Up Rank Down
May 9, 2012
Yes. Though I would prefer to see the guy at the bottom of the 1% still have more than the guy at the top 2% after the fact. But even if that wasn't the case, it would be no less fair than stuff that happens to the poor every day. Half of a 1%'s money is still a crazy comfortable living.

A capitalist that sees some people in the world living off less than 1$ a day and others with billions in investments, and still says "let's not touch a thing, capitalism is perfect!" is delusional. We're playing a game, where money are points, and the game is poorly designed because there is nothing (ie. international laws) to regulate the situation back to equilibrium.

I don't know the best solution, but there are things we could be doing to at least improve the situation, and we're doing a lot of the opposite of those things.
 
 
-5 Rank Up Rank Down
May 9, 2012
A better system may be to tax income based on how it's earn't rather than just how much. For instance a business that employs 1000s of people and uses local materials and services is good for the local economy while another firm that just imports goods and sends the profit to an overseas tax haven does much less for the local economy. This is done a lot anyway through special tax breaks but perhaps it should be explicit. Of course this just a kind of tariff but I guess broader. Some countries have no company tax so in comparison it's no more a kind of protectionism.
 
 
+2 Rank Up Rank Down
May 9, 2012
>On the other hand, studies consistently show that the folks in the Scandinavian countries -- where income redistribution and tax rates are quite high -- consistently rank among the 'happiest' in the world.

If you read those same studies, the US ranks higher than France and Germany. I think that the scandinavian people are just uniquely happy, as asians are agreed to be statistically less happy, even when conditions are ripe for higher levels of happiness. Some cultures are just inherently happier than others.

If you made "scandinavia" its own country, it would have a population between 20 and 30 millions, which is about the population of Texas, while Norway alone controls 5 times the oil output of Texas (although, their reserves are declining.)
 
 
+3 Rank Up Rank Down
May 9, 2012
As a libertarian by instinct, I'm inclined to say that the rich should keep what they earn.

On the other hand, studies consistently show that the folks in the Scandinavian countries -- where income redistribution and tax rates are quite high -- consistently rank among the 'happiest' in the world.

It's a fine line to walk.

If we redistribute nothing, we probably end up with a lot of dirt poor citizens and that's just not good for anyone. It doesn't speak well of us as a nation (that we don't care for our poorest) and it causes all sorts of problems, such as increased crime.

On the other hand, if we tax and redistribute too heavily, we end up creating disincentives to work hard. This affects both those who are productive -- they will tend to work less -- as well as those who are relatively unproductive (many will be happy with the minimal level of government support).

The solution, I think, is to make everyone BELIEVE it's dog-eat-dog -- so as to maximize the incentive to educate oneself and work hard, for example -- but to somehow secretly subsidize those who are simply unable to achieve a certain standard of living appropriate for this country, despite their efforts.

I wonder if the various state and national lotteries could somehow be enlisted in this conspiracy. If Mary Jones has been faithfully working at Wal-Mart for the last 16 years to keep her kids fed and off the street, shouldn't she have a better shot at winning than most of the rest of us?

A simple form, to be filled out with every lottery ticket, ought to do the trick.
 
 
-2 Rank Up Rank Down
May 9, 2012
What if you got rid of all the world's money? Would we all just have to ... stop consuming things forever?

I think you're groping for means to argue against strawmen, Scott - I don't think people really dislike people who are merely "rich" - they dislike people who consciously try to monopolise wealth, beyond the demands of luxurious living: to drop the cherry of others' deprivation onto the sundae of their own personal crapulence.

I'd like to see a world where most people can get what they need, most of the time - and a motivated few can work harder to get what they want.

We don't live in a world of such material scarcity that mass homelessness, malnutrition, etc, has any reason to exist. It's just poor management, and it hurts us all in the long run.

 
 
May 9, 2012
Isn't this called socialism?
Not letting people accumulate wealth only makes everyone lazy and less productive.
People should just stop whining and work harder to make more money for themselves.
 
 
+8 Rank Up Rank Down
May 9, 2012
The 1% is an arbitary, purely mathematical measure of social and economic inequality. Like all of the socio-economic systems used by economists and sociologists, it cuts across class lines. For one thing, the one percent starts too low, cutting through the middle class professionals who in big cities can easily make $500,000 a year (an upper class income for an individual or household, but one which is a long way from super-rich). If you measure wealth instead of income (to avoid people who are "rich" in income but spendthrifts and thus "just getting by" or who live in Manhatten where a three-bedroom apartment of very modest quality costs $1.5 million or more) you are still cutting across the middle classes because many ordinary small businessmen or farmers have $5 million to $10 million in capital, even if they only own a small store or restaurant.

Rich people don't count houses as wealth, by the way. Houses are a liability and a money-pit. Only income-earning property is wealth, so you can have a $3 million New York apartment and be a total nobody having trouble paying the bills or the rent or the condo fees.

I don't think this is entirely accidental. The sociologists don't get to study the rich. As high as they can is still middle class, albeit upper middle class. Their data is for the rich is this group--the merely or not quite rich.

Unfortunately, this class of people are "working rich". In fact, many much richer people such as actors, atheletes, farmers and small businessmen are working rich as well. This is the lower upper class at best (and then only in rural or small town settings). It totally falsifies political and social analysis to throw these people together with the "rich" and demand their expropriation with confiscatory taxes or whatever.

For one thing, these "working rich" or "near rich" are the people who create most of the jobs, while the real rich, or super-rich who make more than a few million a year are more parasitic and tend to consume jobs, and "creatively destroy capital".

If you draw the line high enough you could expropriate most of the money of the rich without having much effect on job creation. And if you pump your stupid stimulus money into the pockets of the super-rich instead of the REAL job creators, then you should expect to be screwed over as the super-rich get richer and the rest of the economy barely budges for years.

Warren Buffet says he should be paying more taxes. He is right because he is super-rich. It wouldn't hurt him personally, and it wouldn't hurt his heirs and assigns, who will be rich any way, and it may not hurt his great-grandchildren, who will probably have modest trust funds to allow them to surf or lounge or take drugs.

But taking money from "rich" farmers, small businessmen, even hockey players or stand up comedians isn't going to help and will probably hurt job creation and the economy.

So the 99% should not be trying to expropriate the 1%: they should be expropriating the Koch Brothers, Bill Gates, Warren Buffet and other super rich people who continue to get even richer despite the recession or because of it. At the very least, taxes should be what they were under Clinton or Reagan or Bush 41 or Nixon or even Eisenhower, depending on how useless the source of this wealth is to society, to the economy, to job creation, and to feeding the poor.

I would be prepared to cut Warren Buffett or even Bill Gates III a break since they are doing something socially useful, more or less. But there's plenty of hedge funders, stock jobbers and other financial wizards who should be sent back to school.

The USA became top heavey with these useless Farkers during the boom years (the various bubbles created by too much money pursuing imaginary growth and capital gains). A lot of these guys should have gone into medicine or or something rather than getting MBAs or becoming PR flacks for stocks and bonds of no real value.

And a lot of the speculators in real estate got what they deserved, even if they were just middle class, greedy and stupid, or going with the flow without really knowing what they were doing.
 
 
 
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