The law locks up the man or woman Who steals the goose from off the common But leaves the greater villain loose Who steals the common from off the goose. The law demands that we atone When we take things we do not own But leaves the lords and ladies fine Who take things that are yours and mine. The poor and wretched don’t escape If they conspire the law to break; This must be so but they endure Those who conspire to make the law. The law locks up the man or woman Who steals the goose from off the common And geese will still a common lack Till they go and steal it back.
The economy is not a zero sum game and exchange only happens if there is a mutual benefit in doing so. The core assumptions on this model are complete bunk.
The key model outcome doesn't really change if you create a "positive sum" simulation. I tried a simulation where each time two agents trade, they each get a return that is proportianal to their previous wealth, sort of like investing in stocks. That seems reasonable I think: if you invest 5 dollars and make a 100% return, you get 5 dollars, but if you invested 50, you get 50. If two parties trade, they each benefit, but the party that had the most previous wealth benefits more (in an absolute sense). If you then run a simulation where each agent randomly trades with all the other agents, the system quickly evolves into a state where 1 agent has almost all the wealth, while the rest have "nothing" (relatively (!) to the agent with the most wealth). Looking at the relative distribution of wealth (instead of absolute) also seems reasonable: you may have a trillion dollars, but if the top agent has a billion trillion gazillion dollars inflation dictates that you now have almost no wealth at all. But the most important point about models such as these is "if this is all that it takes...". Sure the model is a incredible extreme simplification of the real world. But if random chance and trading are all that it takes to create extreme wealth inequility, that has nothing to do with the skill/merit/hard work of any agent in the system, maybe having a system in place that counters that (i.e. taxes) aren't that bad of an idea. True hard work should be rewarded, not just some stochastic/random process that randomly let you be the winner.
Quite getting all your tenured friends together to talk about what could be done, and take some of that money you made talking and creating absolutely nothing and give it to the people who have been supporting you with food water and shelter.
A physicist decides to do economics! Unsurprisingly, he didn't check that the assumptions made any sense. In his simulations, people trade randomly, there is no tradeoff between consumption and savings or labor and leisure, no nexus between savings and investment, no differential ability, externalities, nothing. He finds in such a system, you get all the money going to one guy, so you might as well tax him on wealth. If aggregate wealth is exogenous and market transactions are random muggings, you should really move to a nice socialist country, which would clearly dominate Western neoliberal democracies,with their markets taking up 60% or so of market activity. There are several, and I'm sure they need physicists.
That would be a great argument against the video if he in any way claimed that his education made him an expert on economics. He didn't though. A simple model such as the one he shows here is equally correct/wrong regardless of who makes it or who presents it.
What you claiming is missing from the model are all means for wealth distribution changes. However, that which you are describing does not matter due to the assumption of random wealth distribution. In essence he is saying assume everyone had an equal chance at making the smart savings/investment decisions. Furthermore, to the detriment of your point, even if savings/investment and externalities could be included in the model, those exchanges would further skew wealth in the direction of the agents who initially have more wealth. Furthermore, while he doesn't go into this in the talk, the lack of effect of distributing the wealth based on some skewed probability distribution(a consideration showing concern for addressing your complaints) is indeed discussed in the paper. What they found was, "changing the initial wealth and how it is distributed initially might bias which agent finally obtains almost all the wealth, but will not change the behavior of the model." Your comment essentially says that this model does not sufficiently show the behavior of a complex system, as all economies are. However, a model can be evaluated as reasonable(not perfect) if the assumptions taken are not critical or relevant to the emergent behavior the model expresses. This model passes that test and demonstrates well that unlike conservative narrative these day would have you believe, revenue distribution must be currently favored towards wealthier agents as opposed to poorer ones( ie. corporate welfare). This should lead one to recognize our current manifestation of capitalism as unhealthy, rather than seeing the prescriptions of this model vying for socialism or communism. That is not even close to what he is saying.
The simulations are based on an incorrect models. The right model is described below. Now wealth might be defined to include land values and if so then there is a lot of wealth in the land but not all of it. By taxing land values instead of all of the wealth, the advantages which this speaker describes is made even greater because there is a tendency for the opportunities to be better shared. TAX LAND NOT PEOPLE; TAX TAKINGS NOT MAKINGS!
This is an intriguing idea. Property tax in Montana is creating a destitute class in some areas. I wonder what your thoughts are on how your addition scales (i.e. is property tax arguably encompassed by the %3...or whatever rate...the speaker uses). It seems the spending by a percentage of the lowest wealth individual leaves space for wealth accumulation (i.e. property or home). Does the provision of services and access versus a universal and equal distribution still maintain an important role. I would be interested to hear more of your thought process.
Sorry, Jan, but your model is absurd, unrelated to economic reality, and of no informational value. You missed the key facts: 1. There is no production in your model. Production increases total wealth. 2. People trade voluntarily because BOTH sides believe they profit. 3. Inequality is natural because people are all different, not because exchange is random. 4. Extreme inequality is caused not by production and consensual exchange, but by privilege: legal entitlements to benefit from the uncompensated abrogation of others' rights. Privileges such as land titles, IP monopolies, bank licenses, broadcast spectrum allocations, mineral rights, etc. all increase inequality. The super-duper uber-rich are almost 100% owners of such privileges, which enable them to take most of what is produced without contributing commensurately (or in many cases, at all) to production. 5. Piketty was proved wrong. Matthew Rognlie of MIT proved that the excessive returns to what Piketty erroneously calls "capital" were in fact entirely accounted for by the return to housing -- i.e., land (land appreciates, buildings depreciate). In a simple capitalist economy, landowners are legally entitled to take everything from everyone else, because of the operation of two economic laws: the Law of Rent and the Henry George Theorem. Our modern capitalist system just diverts some of that flow of wealth from landowners to the owners of the other privileges listed above. Clear?
Thank you for the thoughtful contribution. Production does increase wealth at face value. However it also decreases wealth due to externalities. Would you aggree? A multivariate analysis may not be appropriate unless temporal precedence in the mid to long term can be justified...thoughts? This presentation appears to be a compelling case for why the most wealthy (Bill Gates included) are vowing to give away half their wealth. I will check out your referenced theories (law?). Thanks!
@@shanem8738 Externalities are not strongly related to wealth production, though of course there are certain specific forms of wealth production that involve large negative externalities. There are also positive externalities to consider. Temporal precedence is normally resolved by discounting. I am not impressed by the super-duper uber-rich pledging to give away half or more of their wealth when 99%-100% of it was typically obtained by privilege, not production -- i.e., by making others poorer, not by making others richer. Giving back half of what you have stolen (however legal your thieving might have been) is not enough. Even 99% is not enough. That is why we have to focus on privilege and injustice, not merely extreme inequalities of wealth or income. Mere inequality doesn't tell us if it is just or unjust.
But that cut's into the things that really makes a society modern. A culture is best judged by how it's poorest live and not by how it's richest live. For a place like the US, tax cuts means lower military spending or lower social spending. But neither usually occur. When taxes are cut, borrowing increases. The US defense protects the world's capitalism and international business does not want to give that up. However, poor people are inherent in the capitalist system because it neither fair or efficient. So the only things that softens the errors of capitalism is the government safety net. Without government safety nets that are adequate for a decent living people will be reduced to second class citizens. And why would a person want to pay taxes or defend a country when they are second class?
This needs to be presented at the Main TED Condference.
The law locks up the man or woman
Who steals the goose from off the common
But leaves the greater villain loose
Who steals the common from off the goose.
The law demands that we atone
When we take things we do not own
But leaves the lords and ladies fine
Who take things that are yours and mine.
The poor and wretched don’t escape
If they conspire the law to break;
This must be so but they endure
Those who conspire to make the law.
The law locks up the man or woman
Who steals the goose from off the common
And geese will still a common lack
Till they go and steal it back.
Lol the graph looks just like amazon sitting on all their cash.
👏👏👏👏
The economy is not a zero sum game and exchange only happens if there is a mutual benefit in doing so. The core assumptions on this model are complete bunk.
The key model outcome doesn't really change if you create a "positive sum" simulation. I tried a simulation where each time two agents trade, they each get a return that is proportianal to their previous wealth, sort of like investing in stocks. That seems reasonable I think: if you invest 5 dollars and make a 100% return, you get 5 dollars, but if you invested 50, you get 50. If two parties trade, they each benefit, but the party that had the most previous wealth benefits more (in an absolute sense). If you then run a simulation where each agent randomly trades with all the other agents, the system quickly evolves into a state where 1 agent has almost all the wealth, while the rest have "nothing" (relatively (!) to the agent with the most wealth).
Looking at the relative distribution of wealth (instead of absolute) also seems reasonable: you may have a trillion dollars, but if the top agent has a billion trillion gazillion dollars inflation dictates that you now have almost no wealth at all.
But the most important point about models such as these is "if this is all that it takes...". Sure the model is a incredible extreme simplification of the real world. But if random chance and trading are all that it takes to create extreme wealth inequility, that has nothing to do with the skill/merit/hard work of any agent in the system, maybe having a system in place that counters that (i.e. taxes) aren't that bad of an idea. True hard work should be rewarded, not just some stochastic/random process that randomly let you be the winner.
Quite getting all your tenured friends together to talk about what could be done, and take some of that money you made talking and creating absolutely nothing and give it to the people who have been supporting you with food water and shelter.
Good talk but real unfortunate audio
It fixes itself a few minutes in
no mention of credit in this presenation. taxes arent the only way to distribute wealth.
household income inequality is misleading
How so?
A physicist decides to do economics! Unsurprisingly, he didn't check that the assumptions made any sense. In his simulations, people trade randomly, there is no tradeoff between consumption and savings or labor and leisure, no nexus between savings and investment, no differential ability, externalities, nothing. He finds in such a system, you get all the money going to one guy, so you might as well tax him on wealth.
If aggregate wealth is exogenous and market transactions are random muggings, you should really move to a nice socialist country, which would clearly dominate Western neoliberal democracies,with their markets taking up 60% or so of market activity. There are several, and I'm sure they need physicists.
That would be a great argument against the video if he in any way claimed that his education made him an expert on economics. He didn't though.
A simple model such as the one he shows here is equally correct/wrong regardless of who makes it or who presents it.
What you claiming is missing from the model are all means for wealth distribution changes. However, that which you are describing does not matter due to the assumption of random wealth distribution. In essence he is saying assume everyone had an equal chance at making the smart savings/investment decisions. Furthermore, to the detriment of your point, even if savings/investment and externalities could be included in the model, those exchanges would further skew wealth in the direction of the agents who initially have more wealth. Furthermore, while he doesn't go into this in the talk, the lack of effect of distributing the wealth based on some skewed probability distribution(a consideration showing concern for addressing your complaints) is indeed discussed in the paper. What they found was, "changing the initial wealth and how it is distributed initially might bias which agent finally obtains almost all the wealth, but will not change the behavior of the model."
Your comment essentially says that this model does not sufficiently show the behavior of a complex system, as all economies are. However, a model can be evaluated as reasonable(not perfect) if the assumptions taken are not critical or relevant to the emergent behavior the model expresses. This model passes that test and demonstrates well that unlike conservative narrative these day would have you believe, revenue distribution must be currently favored towards wealthier agents as opposed to poorer ones( ie. corporate welfare). This should lead one to recognize our current manifestation of capitalism as unhealthy, rather than seeing the prescriptions of this model vying for socialism or communism. That is not even close to what he is saying.
The simulations are based on an incorrect models. The right model is described below. Now wealth might be defined to include land values and if so then there is a lot of wealth in the land but not all of it. By taxing land values instead of all of the wealth, the advantages which this speaker describes is made even greater because there is a tendency for the opportunities to be better shared. TAX LAND NOT PEOPLE; TAX TAKINGS NOT MAKINGS!
This is an intriguing idea. Property tax in Montana is creating a destitute class in some areas. I wonder what your thoughts are on how your addition scales (i.e. is property tax arguably encompassed by the %3...or whatever rate...the speaker uses). It seems the spending by a percentage of the lowest wealth individual leaves space for wealth accumulation (i.e. property or home). Does the provision of services and access versus a universal and equal distribution still maintain an important role. I would be interested to hear more of your thought process.
Wealth/status envy.....everything you know about economics is wrong!
Explain. I don't think you understand the model, and what it is trying to show.
Sorry, Jan, but your model is absurd, unrelated to economic reality, and of no informational value. You missed the key facts:
1. There is no production in your model. Production increases total wealth.
2. People trade voluntarily because BOTH sides believe they profit.
3. Inequality is natural because people are all different, not because exchange is random.
4. Extreme inequality is caused not by production and consensual exchange, but by privilege: legal entitlements to benefit from the uncompensated abrogation of others' rights. Privileges such as land titles, IP monopolies, bank licenses, broadcast spectrum allocations, mineral rights, etc. all increase inequality. The super-duper uber-rich are almost 100% owners of such privileges, which enable them to take most of what is produced without contributing commensurately (or in many cases, at all) to production.
5. Piketty was proved wrong. Matthew Rognlie of MIT proved that the excessive returns to what Piketty erroneously calls "capital" were in fact entirely accounted for by the return to housing -- i.e., land (land appreciates, buildings depreciate). In a simple capitalist economy, landowners are legally entitled to take everything from everyone else, because of the operation of two economic laws: the Law of Rent and the Henry George Theorem. Our modern capitalist system just diverts some of that flow of wealth from landowners to the owners of the other privileges listed above.
Clear?
Thank you for the thoughtful contribution. Production does increase wealth at face value. However it also decreases wealth due to externalities. Would you aggree? A multivariate analysis may not be appropriate unless temporal precedence in the mid to long term can be justified...thoughts?
This presentation appears to be a compelling case for why the most wealthy (Bill Gates included) are vowing to give away half their wealth.
I will check out your referenced theories (law?).
Thanks!
@@shanem8738 Externalities are not strongly related to wealth production, though of course there are certain specific forms of wealth production that involve large negative externalities. There are also positive externalities to consider. Temporal precedence is normally resolved by discounting.
I am not impressed by the super-duper uber-rich pledging to give away half or more of their wealth when 99%-100% of it was typically obtained by privilege, not production -- i.e., by making others poorer, not by making others richer. Giving back half of what you have stolen (however legal your thieving might have been) is not enough. Even 99% is not enough. That is why we have to focus on privilege and injustice, not merely extreme inequalities of wealth or income. Mere inequality doesn't tell us if it is just or unjust.
Bill Gates created Microsoft. Jan Tobochnik created this boring presentation.
Lower everyone's taxes
Ben Chesterman we can do that but like the guy in the video said....it's about how to spend the tax money that matters most.
But that cut's into the things that really makes a society modern. A culture is best judged by how it's poorest live and not by how it's richest live. For a place like the US, tax cuts means lower military spending or lower social spending. But neither usually occur. When taxes are cut, borrowing increases. The US defense protects the world's capitalism and international business does not want to give that up. However, poor people are inherent in the capitalist system because it neither fair or efficient. So the only things that softens the errors of capitalism is the government safety net. Without government safety nets that are adequate for a decent living people will be reduced to second class citizens. And why would a person want to pay taxes or defend a country when they are second class?
Some people work 350 days a year , the poorest don't
They pay the most tax , jealous much